A growing trade war and rapid policy shifts are expected to drag down economic growth worldwide. The Organization for Economic Cooperation and Development (O.E.C.D.) has projected that global growth will slow to 3.1 percent in 2025 and 3 percent in 2026, a drop from last year’s 3.2 percent.
The United States is likely to experience a sharper decline, with growth forecasted at 2.2 percent this year and 1.6 percent next year. The O.E.C.D.’s secretary general, Mathias Cormann, attributed the weakness to heightened policy uncertainty and increased trade restrictions.
President Trump’s tariffs on steel, aluminum, Canada, Mexico, the European Union, Japan, and Britain have contributed to higher costs for production and consumption. Countermeasures from these countries have also been issued or threatened.
The O.E.C.D.’s revised estimate takes into account rising inflation, which is now expected to be faster than previously thought. Business and consumer confidence have also decreased.
In contrast, India is forecasted to record the strongest growth, with an estimated 6.4 percent increase in 2025 and 6.6 percent in 2026. China’s economy is also expected to grow, with a predicted 4.8 percent growth in 2025 and 4.4 percent in 2026.
However, artificial intelligence may be the only potential bright spot, with labor productivity growth expected to increase significantly over the next decade.
Source: https://www.nytimes.com/2025/03/17/business/trump-trade-war-global-economy.html