NextFin news, On Tuesday, September 23, 2025, the Organization for Economic Cooperation and Development (OECD) issued a report warning that the tariffs imposed by former U.S. President Donald Trump are starting to negatively impact the global economy, with the full consequences expected to materialize in 2026.
The OECD highlighted that the United States and its major trading partners are experiencing slower economic growth due to increased trade barriers. The global economy is forecasted to grow by 3.2 percent in 2025, slightly down from 3.3 percent in 2024, with a further slowdown to 2.9 percent growth anticipated in 2026.
Trump's tariff policies, which include duties of up to 50 percent on steel and aluminum imports from allies such as the European Union, Canada, and India, as well as rivals like China, have raised the effective U.S. tariff rate to an estimated 19.5 percent—the highest since 1933. These tariffs have disrupted supply chains, curbed trade activity, and increased uncertainty in global markets.
The OECD report noted that American consumers are beginning to reduce spending in response to higher prices caused by tariffs. Additionally, labor markets in countries affected by the tariffs have seen companies reduce hiring or lay off workers, further dampening economic activity.
Moreover, the tariffs have led Chinese manufacturers to redirect exports to other global markets, causing concerns in regions such as Latin America about the impact on domestic industries. This shift has increased competitive pressures and economic uncertainty worldwide.
The OECD emphasized that while the global economy showed resilience in the first half of 2025, significant downside risks remain due to ongoing trade tensions, geopolitical uncertainties, and policy unpredictability.
The report underscores the broader implications of protectionist trade policies on global economic stability and growth prospects, urging policymakers to consider the long-term effects of such measures.
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