CoinInsight360.com logo CoinInsight360.com logo
America's Social Casino
Cryptopolitan 2025-03-17 13:45:47

OECD says Trump’s tariff hikes will hurt global economy, drive inflation much higher

The Organization for Economic Cooperation and Development (OECD) expects Trump’s tariff hikes on imports to slow economic growth worldwide and push inflation to much higher levels, according to a report released on Monday. The report slashes growth forecasts for nearly all major economies in 2025 and 2026. The report now projects Mexico’s economy to shrink by 1.3% this year and 0.6% in 2026, a huge reversal from earlier estimates that had Mexico growing by 1.2% and 2.8%. Canada’s growth forecast was cut to 0.7% for both 2025 and 2026, down from 2% previously. The U.S. economy is also expected to slow, with growth now pegged at 2.2% this year and 1.6% next year, lower than the earlier 2.4% and 2.1% projections. Both countries are victims of Trump’s aggressive tariffs. Tariffs to rise, trade partners to face heavy costs The OECD’s forecast assumes that tariffs on imports from Mexico and Canada will rise by 25 percentage points starting next month. China will continue to face 20 percentage point tariffs on its exports to the U.S., along with higher duties on steel and aluminum. In its Monday report, the OECD warned that Trump’s trade policies would likely lead to retaliation from affected countries, which would further damage the global economy. Alvaro Pereira, OECD’s chief economist, pointed out how the uncertainty surrounding Trump’s trade policies is already affecting global markets. “We’re already seeing high trade uncertainty and economic policy uncertainty,” Pereira said. “This is already having an impact on confidence. We have downgraded almost every single country.” The global economy is now forecast to grow by 3.1% in 2025 and 3% in 2026, slightly down from previous estimates of 3.3% for both years, according to the OECD’s report. Inflation and U.S. households to take a hit If Trump imposes new tariffs of 10 percentage points and other nations respond with their own trade barriers, the OECD projects that global economic output will shrink by 0.3% in 2026. The report also warns that these policies will drive up consumer prices, cutting real incomes in the U.S. by 1.25% over the next three years. That translates to an average $1,600 loss per household. Despite generating additional tariff revenue for the U.S. government, the OECD says that the economic slowdown will reduce tax revenue from other sources, making it unlikely that tariffs will cover the losses. “Additional tax increases or lower fiscal expenditure are needed to keep the overall budget deficit unchanged,” the OECD stated. Inflation is expected to rise by a third of a percentage point across the world’s largest economies due to Trump’s tariffs , which could cause central banks to delay interest rate cuts. Pereira said that if inflation worsens, central banks will be forced to take a cautious approach in their decision-making. The OECD now expects the Federal Reserve to keep interest rates at 4.25% to 4.5% well into 2026, a shift from its earlier forecast that had rates dropping to 3.25% to 3.5% by early 2026. China sees small boost, eurozone struggles The OECD slightly raised its growth forecast for China, now predicting 4.8% growth in 2025, up from 4.7% previously. The group says that China’s economic stimulus measures will help offset the impact of U.S. tariffs on Chinese exports. Meanwhile, growth forecasts for the eurozone and Germany were lowered. However, the OECD noted that its projections do not yet reflect expected increases in Germany’s defense and infrastructure spending under incoming leadership. The government led by Friedrich Merz is set to expand spending on infrastructure, which could improve the outlook for Europe’s largest economy. “Germany has had an infrastructure gap for a long time,” said Pereira. “They definitely need to spend more.” Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot

면책 조항 읽기 : 본 웹 사이트, 하이퍼 링크 사이트, 관련 응용 프로그램, 포럼, 블로그, 소셜 미디어 계정 및 기타 플랫폼 (이하 "사이트")에 제공된 모든 콘텐츠는 제 3 자 출처에서 구입 한 일반적인 정보 용입니다. 우리는 정확성과 업데이트 성을 포함하여 우리의 콘텐츠와 관련하여 어떠한 종류의 보증도하지 않습니다. 우리가 제공하는 컨텐츠의 어떤 부분도 금융 조언, 법률 자문 또는 기타 용도에 대한 귀하의 특정 신뢰를위한 다른 형태의 조언을 구성하지 않습니다. 당사 콘텐츠의 사용 또는 의존은 전적으로 귀하의 책임과 재량에 달려 있습니다. 당신은 그들에게 의존하기 전에 우리 자신의 연구를 수행하고, 검토하고, 분석하고, 검증해야합니다. 거래는 큰 손실로 이어질 수있는 매우 위험한 활동이므로 결정을 내리기 전에 재무 고문에게 문의하십시오. 본 사이트의 어떠한 콘텐츠도 모집 또는 제공을 목적으로하지 않습니다.