US growth likely to slow to 1.6% this year, hobbled by Trump’s trade wars, OECD says
The global economy is facing challenges as the United States experiences a slowdown in economic growth. According to the Organization for Economic Cooperation and Development (OECD), the U.S. economy is expected to grow by only 1.6% this year, down from 2.8% in the previous year. This decline is largely attributed to President Donald Trump’s trade wars, which have disrupted global commerce, increased costs, and created uncertainty for businesses and consumers.
Trump’s policies have led to a significant increase in average U.S. tariff rates, rising from around 2.5% to 15.4%, the highest level since 1938. These tariffs have raised costs for consumers and American manufacturers that rely on imported raw materials and components. As a result, the OECD predicts that the U.S. economy will further slow to 1.5% in 2026.
The impact of Trump’s trade wars is not limited to the U.S. economy, as the OECD forecasts a slowdown in global economic growth to just 2.9% this year and in the following year. This marks a substantial deceleration from the growth rates of 3.3% and 3.4% in the previous years, respectively.
Despite facing global shocks such as the COVID-19 pandemic and geopolitical tensions, the world economy has remained resilient in recent years. However, Trump’s trade policies have created uncertainty and clouded the economic outlook. By imposing tariffs on imports from nearly every country and threatening additional taxes, Trump has disrupted global trade and investment.
The uncertainty surrounding Trump’s trade wars was further heightened by a recent federal court ruling that blocked most of his tariffs, citing an overstep of authority. However, the Trump administration was allowed to continue collecting the taxes while appeals were underway.
China, the world’s second-largest economy, is also expected to see a slowdown in growth due to Trump’s tariffs and the collapse of its real estate market. The Chinese government has outlined plans to mitigate the impact by cutting interest rates, encouraging bank lending, and investing in key sectors.
In the eurozone, economic growth is projected to improve slightly with the help of interest rate cuts from the European Central Bank. The OECD, a Paris-based organization promoting international trade and prosperity, continues to monitor and analyze global economic trends to provide insights for member countries.
Overall, the global economy is facing challenges due to Trump’s trade wars, which have disrupted commerce, increased costs, and created uncertainty. It is essential for policymakers to address these issues and work towards restoring stability and growth in the global economy.
