OECD Warns Trump : Tariffs Are Harming Global Economy

OECD Warns Trump : Tariffs Are Harming Global Economy

Trump Tariffs Trigger Economic Alarm

The OECD warned on June 3, 2025, that Trump’s tariffs are hurting the US and global economies. Global growth for 2025 and 2026 is now forecast at 2.9%, down from 3.1%.

The US faces a steeper drop, with growth projected at 1.6% in 2025. Higher costs and trade uncertainty are key culprits. Trump’s team insists tariffs will strengthen America.

Background of Tariff Push

Trump launched broad tariffs on imports after taking office in January 2025. On April 2, he set a 10% tariff on most trading partners, with steeper rates for China, Canada, and Mexico.

The policy, called “Liberation Day,” aims to boost US jobs. Courts have challenged Trump’s authority, issuing stays on some tariffs. Trade talks are ongoing to ease tensions.

What Is the OECD?

The OECD, or Organisation for Economic Co-operation and Development, is a group of 38 nations. Based in Paris, it studies economic trends and offers policy advice. Founded in 1961, it promotes trade and prosperity. Its reports shape global economic strategies. The OECD’s warnings signal serious risks to markets.

Why the Warning Matters

The OECD’s forecast is respected for its rigor and data. It predicts the weakest global growth since the pandemic. The US, a global economic driver, faces significant slowdown. This rattles investors and policymakers. The OECD urges reducing trade barriers to spur growth. Ignoring the warning could deepen economic woes.

How Tariffs Harm Globally

Tariffs raise import prices, hitting consumers and businesses. Supply chains face disruptions, slowing trade. The OECD cut growth forecasts for G20 nations like China and the UK. Inflation risks grow as costs rise. Investment hesitates amid policy uncertainty. Exports, especially from Asia-Pacific, are declining fast.

Trump defends tariffs, claiming they protect US workers. Despite a 0.2% economic contraction in early 2025, his team pushes forward. They’re appealing court rulings against tariffs. A May 12 US-China deal lowered tariffs from 145% to 30%. Talks with the EU and others aim to prevent further economic strain.

The OECD’s alert highlights the dangers of Trump’s tariff strategy. While intended to bolster US industry, the policy is slowing growth and raising prices. The US faces a sharp 1.6% growth forecast for 2025, down from 2.8% in 2024. Global economies, particularly G20 nations, are also struggling.

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