OECD Cuts US Economic Outlooks and Global Economic Outlooks for ‘Higher trade barriers’

Takeaways from the Key Takeaways

• The Organisation for Economic Co-operation and Development has cut its outlook for the U.S. and the global economy this year and next, citing "higher trade barriers" that are putting pressure on growth.
• The OECD said that the U.S.'s annual real GDP growth rate is expected to "slow from its very strong recent pace" to 2.2% this year and 1.6% in 2026.
• The Paris-based organization also cut its forecasts for 2025 global GDP growth to 3.1% from 3.3% and 2026 to 3.0% from 3.3%.

The Organisation for Economic Co-operation and Development, or OECD, has cut its outlook for U.S. and world economic growth this year and in the next. They cited “higher trade barrier” as the reason for the decline.

The OECD has said that the U.S. real gross domestic products (GDP) will “slow” from its recent very fast pace to 2.2% in this year, and 1.6% in 2020.

The Paris-based organization also cut its forecasts for 2025 global GDP growth to 3.1% from 3.3% and 2026 to 3.0% from 3.3%. Global GDP grew by 3.2% last year. 

The OECD said that real GDP growth in the euro area is expected to be 1.0% this year and 1.2% in 2026 "as heightened uncertainty keeps growth subdued." The organization projects that China’s growth will slow down to 4.4% from 4.8% last year.

'Higher Trade Barriers,' Uncertainty Seen Weighing

The OECD said that "higher trade barriers in several G20 economies and increased policy uncertainty (are) weighing on investment and household spending."

The frequent tariff announcements by U.S. president Donald Trump have caused market turmoil and increased consumer concerns about higher prices. Canada and the European Union (EU), which have also taken retaliatory measures after the U.S. imposed 25% tariffs on steel and aluminum imports last week, have also responded.