Donald Trump's tariff policies and global uncertainties have slowed down the pace of the US and world economy. The Organization for Economic Cooperation and Development (OECD) has cut the growth rate estimate of the global economy including the S in its latest report.
America's growth has come down from 2.2 percent to 1.6 percent
According to the OECD, the US economy will now grow at a rate of only 1.6 percent in 2025, whereas it was 2.2 percent in the march 2025 estimate. This rate has also been reduced to 1.5 percent for 2026. The report states that instability in trade policies in the US, strict immigration rules, reduction in the number of government employees and tariffs have had a direct impact on investment and consumption.
Global growth also downgraded
The OECD has also reduced the global economic growth rate. Now global growth is estimated to be 2.9 percent for both 2025 and 2026, which was earlier 3.1 percent and 3 percent. This decline is being seen especially in the US, canada and Mexico. Relatively mild impact is being seen in the rest of the countries.
"Tariff policy became the reason for economic uncertainty"
The report says that the new tariffs implemented in the US from May 2025 are weakening the confidence of the consumer and business sector. Recently some tariff rules were stopped in the US court, but they were reinstated again. The trump administration is now planning to increase the tariff on steel by 50 percent. OECD Chief Economist Alvaro Pereira said in an interview to CNBC, "The growth forecast of almost every country had to be reduced because uncertainty regarding trade and policies has now reached historic levels."
Inflation will also increase
Not just growth, now inflation is also emerging as a big threat. According to the OECD, inflation in the US may be 3.2 percent in 2025, which was earlier estimated at 2.8 percent. By the end of the year, this figure may reach 4 percent. The main reason for this is the increase in the cost of goods due to tariffs on imports. However, to some extent, a fall in commodity prices may provide relief.
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