OECD Slashes U.S. Growth Forecast as Tariffs Bite

​The Organisation for Economic Co-operation and Development (OECD) has sharply cut its outlook for U.S. growth, citing rising tariffs and growing economic uncertainty tied to President Trump’s trade policies.

The OECD now expects the U.S. economy to grow just 1.6% in 2025 and 1.5% in 2026, down from an earlier projection of 2.2%. The group also flagged a broader slowdown across North America as tariff tensions escalate and policy clarity erodes.

Key factors behind the downgrade include Trump’s reciprocal tariffs, ongoing legal battles over their legitimacy, declining immigration, and a shrinking federal workforce. The OECD warned that rising trade barriers and persistent policy uncertainty could further undermine business confidence and investment.

The global growth forecast was also trimmed, now expected to hit 2.9% this year instead of the previously forecasted 3.1%, assuming current tariff levels remain in place.

On the inflation front, the OECD revised its U.S. forecast up to 3.2% for 2025, from 2.8% previously—and suggested inflation could approach 4% by the end of the year, driven by higher trade costs and strained supply chains.

​Bottom line: The OECD’s revised outlook signals that tariffs are already weighing on the U.S. economy, and if trade tensions persist, slower growth and rising inflation could become the new normal.