The US Donald Trump President Growth The World Growth and Increase Inflation, OECD predicts the latest forecast.
Canada and Mexico are predicted to see the greatest impact because they have the largest tariffs imposed on them, but the US growth is also expected to hit.
OECD has more than emptying growth for Canada for this year and next, while expected that Mexico is motivated to shrink.
Trump imposes 25% tariffs in all steel and aluminum imports. US also reduces 25% of the other import tariff from Mexico and Canada – with some exceptions – and 20% Levy of Chinese things.
In response, Canada and the EU both notified in retaliators tariffs.
The OECD based on Paris said higher trade barriers and “increasing geopolitical and uncertainty” hit investment and investment spending.
In the latest OECD forecast:
- Canadian economy is predicted to grow through only 0.7% this year and by 2026, compared with previous forecast of 2% for two years
- Mexican is currently predicted contract of 1.3% this year and shrink an additional 0.6% next year, instead of growing by 1.2% and 1.6% as first expected
- US growth is also lowered, with growth of 2.2% expected this year and 1.6% of 2025, from previous advertisements of 2.4% and 2.1%
- Despite the execution of Chinese tariffs in China, OECD raised growth growth for country a bit of 4.8%.
The OECD says the developing trading war is set to push the inflation, which means that interest rates are likely to remain higher.
“Important risks remain,” it is warned. “Increased world economic division is an important concern.
“Higher and wider rise in hurricane barriers in progress around the world and add to inflation”.
OECD said that for the economy of the world, growth slowly from 3.2% of 2024 to 2025, mostly as a result of trade tensions.
Last week, Eldon Car Firms Tesla warned Eldon Musk that it is, and other US exporters, can damage trade war.
In a US trade representative letter, the company says that the US exporters “exposed to the undivided effect” when other countries ask Trump’s tariffs.
OECD cuts growth growth for UK economy at 1.4% of 2025, from previous forecast of 1.7%, and by 1.2% of 1.36.
However, forecast is more optimistic than the Bank of England, earlier this month the UK growth forecast is cut in 2025 to 0.75%.