OECD: Global economy resists Trump's tariffs better than expected

The global economy will resist the significant increase in tariffs imposed by US President Donald Trump better than expected in 2025, although their effects have not yet “been fully felt”, the Organization for Economic Cooperation and Development (OECD) said on Tuesday (23).

Global growth will be 3.2% in 2025, according to the OECD report, which raised the previous estimate, released in June, by 0.3 percentage points.

"Global growth remains resilient, supported by trade and production frontloading ahead of the implementation of higher tariffs," the Paris-based organization's quarterly report highlights.

The OECD is thus approaching the forecast released in December of last year, before Trump's return to the White House, when the organization projected a 3.3% increase in global GDP in 2025. For 2026, the forecast is 2.9%, 0.4 percentage points less than the estimate from the end of last year.

– “Emerging” resistance –

The US economy is expected to pay the price for the tariff battle initiated by Washington in 2025, with growth slowing to 1.8% and then to 1.5% in 2026, compared to last year's 2.8% increase.

Growth in the eurozone will fall from 1.2% in 2025 to 1% the following year. Among its major economies, Spain is expected to see the largest growth, at 2.6% and 2%, respectively.

In contrast, growth will hold up this year "in a large number of emerging market economies," the report highlights. China will register expansion of 4.9% in 2025 (+0.2% compared to the June estimate), and 4.4% (+0.1%) in 2026.

Brazil follows the same trend, with projected growth of 2.3% and 1.7%, respectively. Mexico's economy will grow 0.8% (+0.4%) in 2025 and 1.3% (+0.2%) next year.

Argentina will grow less in 2025 than initially predicted in June, at 4.5% (-0.7%), according to the OECD, which maintains its projection for 2026, at 4.3%.

– Factors of optimism and concern –

Trump imposed tariff increases on most of the United States' trading partners, raising the effective tariff rate on goods entering the American market to 19.5%, the highest level since 1933, according to the OECD.

Among the factors for optimism for this year, industrial production grew more during the first six months of the year than the average pace in 2024 in most advanced economies, the organization points out.

Furthermore, “the effects of the tariff increases have not yet been fully felt, because the implementation of many changes has been gradual and companies initially absorb part of the increases in their margins,” he adds.

The OECD warns, however, of the emergence of "signs of a slowdown" in production growth since August, particularly in South Korea, Germany and Brazil; and in consumption in the United States, the eurozone and China.

"Generally, when the economy is doing very well, growth tends to remain around 4%, so we are far from that," said OECD chief economist Álvaro Pereira in an interview with AFP.

According to the Portuguese economist, the organization “forecasts slightly higher inflation, particularly in the United States, but not only in this country, for example, through rising food prices in countries like Japan and South Africa.”

Among other factors of concern, the OECD mentions possible new tariff increases, as well as budgetary risks in a scenario of growing debt in most regions and tensions over interest rates for loans.