By Oshadhi Gimesha, Lead Journalist | Editor-in-Chief Approved
A Bleaker Outlook for 2025
The OECD dropped a sobering update today, March 17, 2025: the U.S. and global economies face slower growth thanks to Trump’s trade tariffs. The Paris-based group trimmed its U.S. forecast from 2.5% to 2.2% for this year and from 2.1% to 1.6% in 2026. Worldwide, growth is down to 3.1% from 3.3%. For Americans already feeling the pinch, it’s a stark warning, tariffs meant to boost jobs might slow things down instead.
Key Points
- OECD cuts U.S. growth to 2.2% in 2025, and 1.6% in 2026, citing tariffs.
- Global growth dips to 3.1% as trade tensions rise.
- Families and businesses brace for higher costs and fewer jobs.
The Cost of Trade Fights
The OECD’s numbers hit hard. “Trump’s tariffs are denting output,” the group warned, pointing to 25% levies on Canada and Mexico, 20% on China, and a looming 200% threat on EU goods. U.S. growth is slipping as imports get pricier, squeezing businesses and households. “My store’s costs are up 15% since January,” says Chicago grocer Tom Harris. “I’m passing it on, but customers are cutting back.”
In Canada, hit by U.S. tariffs, the outlook’s grimmer, and growth’s slashed nearly in half. Germany and the UK feel the chill too, with trade ties to the U.S. and EU under strain. For Aussies or French families, it’s a global drag: higher prices, fewer exports, and stalled wages. The OECD sees inflation ticking up, with Mexico facing a 1.3% contraction this year, trade wars aren’t sparing anyone.
Interim #EconomicOutlook: OECD GDP growth projections for 2025
— OECD ➡️ Better Policies for Better Lives (@OECD) March 17, 2025
G20 3.1%
🇮🇳 6.4%
🇮🇩 4.9%
🇨🇳 4.8%
🇷🇺 1.3%
🇧🇷 2.1%
🇹🇷 3.1%
🇪🇸 2.6%
🇺🇸 2.2%
🇰🇷 1.5%
🇲🇽 -1.3%
🇨🇦 0.7%
🇸🇦 3.8%
🇫🇷 0.8%
🇦🇺 1.9%
🇬🇧 1.4%
🇮🇹 0.7%
🇪🇺 1.0%
🇿🇦 1.6%
🇯🇵 1.1%
🇩🇪 0.4%
🇦🇷 5.7%
🔗 https://t.co/9XTTLacZqf pic.twitter.com/SM1UWyINwN
Why Tariffs Are Taking a Toll
This isn’t just numbers on a page. Trump’s tariffs, meant to jolt U.S. jobs, are backfiring, the OECD says. The 25% on Canadian steel and aluminium, 20% on Chinese goods, and threats like 200% on EU booze risk stoking inflation and curbing trade. “A broad increase in tariffs would hit living standards hard,” the group notes, warning of stalled investment and higher costs for everything from cars to groceries.
The U.S. trade gap widened to $131.4 billion in January, up 34%, as imports slowed. Yet Trump’s team sees it as leverage—more jobs, less debt. “We’re fixing trade imbalances,” Bessent argued Sunday. But critics counter: higher prices could choke growth, not fuel it. In the Netherlands or Australia, where trade drives growth, this rings true—retaliation from Canada, China, and the EU could deepen the dip.
Hope or Hype?
The OECD’s not doom-saying. It sees a path forward if tariffs ease—U.S. growth could rebound with lower rates and stable trade. Yet the risk’s real: if Trump doubles down in April, as hinted, prices might spike, jobs could stall, and global growth could shrink further. “We’re holding our breath,” says Maria Lopez, a Seattle factory worker. “My hours are down, and bills aren’t.” Surveys show 53% of Americans expect worse times ahead, up from January.
In the UK, where Brexit still stings, this tariff talk feels familiar. France might shrug, but small businesses there worry about export drops. The OECD’s 1.4% UK forecast cut—down 0.3%—mirrors the U.S. chill. Big banks might weather it, but for families and firms, it’s a tighter squeeze.
What’s Next for Your Paycheck?
If tariffs soften, growth could stabilize—U.S. jobs might hold, and prices ease. But if Trump pushes harder, expect higher costs, fewer exports, and slower hiring. It’s a wait for U.S. households: will wages catch up, or fall behind? Canada, Germany, and others watch too—trade ties mean shared pain or gain. This isn’t a quick fix; it’s a global balancing act. News Zier will track it as the stakes evolve.
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