Mon, 17 Mar 2025

Mon, 17 Mar 2025 Trade turmoil forecast to slash growth in Canada and Mexico

Trump's tariffs will hit its biggest steel trading partners' economies the most, the OECD predicts.
According to the OECD, US President Donald Trump's escalating trade tariffs will lead to slower global growth and higher inflation. The forecast predicts that Canada and Mexico will be hit the hardest due to the severe tariffs imposed on them. As a result, the OECD has lowered its growth outlook for Canada by more than half this year and next, while Mexico is expected to fall into recession. The 25% tariffs imposed on steel and aluminum imports from Canada and Mexico have led to retaliatory measures from these countries as well as the EU. The OECD warns that the rising trade barriers and increased geopolitical uncertainty are affecting investment and household spending worldwide. The organization's forecast indicates:
* World economic growth will slow down from 3.2% in 2024 to 3.1% in 2025 due to the trade tensions.
* Inflation is expected to rise, with a predicted rate of 3.8% across 20 major economies this year, up from 3.5%.
* The UK's economy growth forecast has been cut to 1.4% in 2025 and 1.2% in 2026 due to the trade tensions.
* US exporters, including Tesla, may be harmed by the trade war. The OECD notes that "significant risks remain" and warns of further fragmentation of the global economy if higher trade barriers are implemented.
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