OECD cuts global GDP forecast amid tariff uncertainties, increase in trade barriers

Key Concepts:

• GDP Forecast: Prediction of Gross Domestic Product growth.
• Trade Protectionism: Government policies that restrict international trade to protect domestic industries.
• Tariffs: Taxes imposed on imported goods.
• OECD: Organisation for Economic Co-operation and Development.
• Trade Barriers: Government-imposed restrictions on the free international exchange of goods or services.

Impact of US Trade Policy on Global Growth

The OECD has revised its GDP forecast downwards due to the impact of US trade policy under President Donald Trump. The organization now projects global economic growth at 2.9% for the current year, a slight downgrade from previous forecasts. The OECD warns of a potentially weaker outlook if trade protectionism continues to rise.

Specific Economic Forecasts and Downgrades

The US, Mexican, and Canadian economies are expected to be significantly affected by ongoing tariff impositions and uncertainties. The OECD has cut its forecast for US growth from 2.2% to 1.6% for the current year. Next year's projection has also been reduced from 1.6% to 1.5%.

OECD Chief Economist's Assessment

The OECD chief economist attributes the weakened economic prospects worldwide to a significant increase in trade barriers and uncertainty. The forecasts are based on the assumption that tariffs recently imposed by the Trump administration will remain in place.

Impact on China

Despite ongoing legal challenges, the OECD believes that China's growth will be less affected by tariff headwinds compared to the US.

OECD Ministerial Council and Trade Discussions

The OECD Ministerial Council is currently underway, with US Trade Representative Jamison Greer in attendance. Other member states are expected to lobby Greer regarding trade, tariffs, and trade deals.

UK's Efforts to Secure Tariff Exemptions

Jonathan Reynolds from the UK is scheduled to meet with Jamison Greer to discuss a timeline for exempting Britain from metals tariffs. This effort is linked to the trade deal announced between the UK and Washington last month.

Synthesis/Conclusion

The OECD's revised GDP forecast and warnings highlight the negative impact of US trade policy and rising trade protectionism on global economic growth. The US, along with Mexico and Canada, is expected to be among the most affected economies. While China's growth is projected to be less impacted, the overall outlook remains uncertain. The OECD Ministerial Council provides an opportunity for member states to address trade concerns with the US Trade Representative. The UK is actively seeking tariff exemptions as part of its trade deal with the US.