Eskalling trade tariffs by US President Donald Trump will hit world growth and raise inflation, predicted OECD in his last forecast.
Canada and Mexico are predicted to see the biggest influence because their strictest tariffs have been imposed, but the US growth is expected to be hit.
The OECD has more than halved its chances of growth for Canada for this and next year, while he expects Mexico to be pushed into a recession.
Trump imposed 25% of tariffs on all imports of steel and aluminum. The US also imposed 25% of tariffs to another import from Mexico and Canada – with some exemptions – and 20% collection on Chinese goods.
In response, Canada and the EU announced the retailers of tariffs.
The OECD based in Paris said that there were more trade obstacles and “increased geopolitical and political insecurity” encouraged investment and household spending.
In the latest forecast OECD:
- It is predicted that the Canadian economy will grow by only 0.7% and 2026 this year, compared to the previous forecast of 2% for both years
- Mexico is now predicted to contract 1.3% this year and reduce an additional 0.6% next year, instead of growing by 1.2% and 1.6% as expected earlier
- Growth in the US is also reduced, with a growth of 2.2% expected this year and 1.6% in 2025, which is a drop from previous forecasts of 2.4% and 2.1%
- Despite the American imposition of Tariff China, OECD increased the growth forecast for Earth to 4.8%.
The OECD said that the war in development was set up to encourage inflation, which will mean that interest rates will probably remain bigger longer.
“Significant risks remain,” he warned. “Further fragmentation of the global economy is a key concern.
“A larger and wider increase in trade barriers would hit growth around the world and added to inflation.”
OECD said that for the world economy, growth will slow down 3.2% in 2024. At 3.1% in 2025, mainly as a result of trade tensions.
Last week, Warned by Elona Male Electric car company Tesla So that other American exporters can also harm the trade battle.
In a letter to the US trade representative, the company said that US exporters were “exposed to disproportionate influences” if other countries were revenge on Tariff Trump.
The OECD reduced the growth forecast for the UK economy to 1.4% in 2025, from the previous forecast of 1.7% and to 1.2% in 2026, which is a drop of 1.3%.
However, the prognosis is more optimistic than the bank of England, which decreased its growth forecast in the UK by 2025 to 0.75%earlier this month.
