### OECD Foresees Greater Economic Damage from Trump's Trade Policies

The Organisation for Economic Co-operation and Development (OECD) has issued a stark warning about the economic toll of President Donald Trump's ongoing trade war. In a report released on Tuesday, the OECD lowered its 2025 economic growth forecast for the United States to 1.6%, down significantly from the 2.2% expected in March. The organization also predicts even weaker growth for the upcoming year.

According to the Paris-based group, the uncertainty and chaos stemming from Trump's tariffs are expected to have lasting negative impacts globally. Factors influencing this bleak outlook include higher tariffs, retaliatory tariffs on American exports, reduced net immigration, and a notable reduction in the federal workforce.

The OECD also projects the global economy to slow to a growth rate of 2.9% for both this year and next, a downgrade from earlier forecasts of 3.1% and 3%, respectively. This projection assumes that international tariffs remain at their levels as of mid-May. "The global economy has shifted from a period of resilient growth and declining inflation to a more uncertain path," said OECD Secretary-General Mathias Cormann. He noted that current policy uncertainties are dampening trade and investment, diminishing consumer and business confidence, and hampering growth prospects.

The report highlights that the slowdown is expected to be most pronounced in the United States, Canada, Mexico, and China—nations most impacted by the new tariffs. Since reentering office, Trump has raised import duties on numerous key goods, including cars and steel, from most of America's trading partners. Despite legal challenges, a new round of stringent "reciprocal tariffs" is set to take effect on July 9 unless agreements are reached with Washington.

The imposition of these tariffs and the resulting unpredictability have negatively affected many businesses and consumers. The OECD indicated that the new U.S. import tariffs, combined with retaliatory trade barriers from China and Canada, could cause more disturbance than the U.S.-China trade tensions from 2018-2019. New levies are also likely to drive up inflation in the implementing countries, necessitating vigilance from central banks, which typically raise interest rates to counteract rising prices.

Meanwhile, President Trump has openly called for the U.S. Federal Reserve to reduce borrowing costs, a move met with caution by Federal Reserve Chair Jerome Powell. Powell has opted to wait and observe the effects of the tariffs on the U.S. economy before making any decisions on interest rates.