In its report released in early June 2025, the Organisation for Economic Co-operation and Development (OECD) revised its global economic growth forecast, expecting a slowdown in the growth rate to around 2.9% for both 2025 and 2026, compared to 3.3% recorded in 2024. This move reflects the organization’s concern over a complex economic environment facing pressure from rising trade barriers, continued monetary tightening, and declining confidence among businesses and consumers following a wave of political and economic uncertainty.
Among the key contributing factors to this slowdown, the OECD pointed to a sharp rise in average tariff rates, which jumped from around 2.5% to more than 15%, marking the highest level in decades for import duties. This escalation in trade protectionism—mainly stemming from increased tariffs between the United States and its trade partners—has imposed direct costs on global trade. It has increased import burdens for consumers, raised industrial input prices for companies, and caused significant disruption to global supply chains.
This trade tension has created an unstable economic environment that placed immediate pressure on investments, particularly when companies make decisions about expanding operations or relocating production lines. As a result, global trade has slowed noticeably, and major economies such as the United States, Canada, and Mexico appear to be among the hardest hit, with projected growth falling short of previous estimates.
In its report, the OECD made an effort to highlight the potential risks, warning that the continued imposition—or escalation—of tariffs could lead to deeper consequences, including sustained economic slowdown, increased inflation, and a decline in investment indicators. It also emphasized the need to return to open trade policies and foster international agreements to avoid more severe scenarios.
On the other hand, the organization shed light on some positive aspects, such as the possibility that easing tariffs could boost growth and relieve price pressures. It noted that the next steps may involve financial support measures in certain economies like China and Germany, as well as structural reforms that could help enhance medium-term growth.
