Trump tariffs to shrink US economic growth to 1.6%, global to 2.9%: OECD

The Paris-headquartered organisation also indicated that the growth will further worsen to 1.5 per cent in 2026.

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The slowdown can be attributed to increased tariff rates, OECD said in its ‘Economic Outlook 2025’.

The report highlights that Trump’s policies have raised average US tariff rates from around 2.5 per cent when he returned to the White House to 15.4 per cent, highest since 1938.

Trump has imposed 10 per cent tariffs on imports from almost every country, and additional 25 per cent on steel, aluminum and auto products. Last week, he also said that he would double the tariff on steel and aluminium imports to 50 per cent to protect the domestic industry.

The risk of economic slowdown isn’t only looming over the US, but will also have an impact on the world economy.

The OECD projected that the world economic growth will drop to 2.9 per cent in 2025 and 2026. This marks a significant decline from growth of 3.3 per cent last year and 3.4 per cent in 2023.