OECD: “Almost No Exception” to Global Economic Pain from Trade War

The economic pain stemming from the ongoing trade war will spare “almost no exception” globally, according to a stark warning from the Organization for Economic Co-operation and Development (OECD). The OECD has significantly lowered its global economic growth projections, now anticipating a decline from 3.3% in 2024 to 2.9% in both 2025 and 2026, a clear indicator of the pervasive nature of the economic slowdown.
The OECD’s latest outlook report explicitly states that “weakened economic prospects will be felt around the world, with almost no exception,” leading to “lower growth and less trade [that] will hit incomes and slow job growth.” This dire prediction emphasizes the widespread impact of protectionist policies, with the United States, Canada, Mexico, and China singled out as major contributors to this anticipated global economic contraction.
Further exacerbating the situation, the OECD warns that “protectionism” will put pressure on inflation, causing costs for goods and services to rise. This inflationary trend, combined with existing high debt levels, poses a significant threat to developing nations, which may face increased difficulty in managing their finances and refinancing existing debt.
In response to this widespread economic distress, the OECD advises central banks to “remain vigilant” regarding inflation, even if immediate interest rate hikes are not expected. The report also highlights the critical need for increased investment to stimulate economic activity and strengthen public finances, a task made more challenging for governments already burdened by substantial debt.