OECD Warns: US Trade Tariffs to Stifle Canada’s Growth, Global Economy at Risk
The OECD has sharply downgraded its growth projections for Canada, slashing its economic expansion forecast to just 0.7% for both this year and 2026—less than half of its previous 2% prediction.
The global economy is bracing for a slowdown as US President Donald Trump’s aggressive trade policies continue to take a toll, the Organisation for Economic Co-operation and Development (OECD) has warned. The Paris-based institution’s latest forecast paints a grim picture, particularly for Canada and Mexico, which are expected to bear the brunt of the trade war’s economic consequences.
The OECD has sharply downgraded its growth projections for Canada, slashing its economic expansion forecast to just 0.7% for both this year and 2026—less than half of its previous 2% prediction. Meanwhile, Mexico is projected to plunge into a recession, with its economy expected to contract by 1.3% this year and shrink further by 0.6% in 2025. Previously, the country was expected to grow by 1.2% and 1.6% in those respective years.
Trump’s administration has imposed steep 25% tariffs on steel and aluminum imports and an additional 25% duty on various imports from Canada and Mexico, with some exemptions. In response, both Canada and the European Union have introduced retaliatory tariffs, further straining international trade relations.
While the US has imposed broad tariffs on imports from China, Canada, and Mexico, its own economy is not immune to the repercussions. The OECD now expects US economic growth to slow to 2.2% in 2024 and 1.6% in 2025, marking a downward revision from previous estimates of 2.4% and 2.1%, respectively.
Despite US tariffs on Chinese goods, China’s economic growth forecast has been revised slightly upwards to 4.8%, suggesting that Beijing may be weathering the trade war more effectively than anticipated.
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