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Global Economy Shows Resilience Despite Trump’s Trade Policies, OECD Reports
The global economy has demonstrated unexpected strength in the face of President Donald Trump’s protectionist trade policies, according to a new assessment from the Organization for Economic Cooperation and Development released Tuesday.
The OECD has revised its global growth forecast upward to 3.2% for 2025, a significant improvement from its June prediction of 2.9%. While this represents a slight decrease from the 3.3% growth expected in 2024, it reflects remarkable economic resilience amid mounting trade tensions and policy uncertainty. The organization anticipates growth will moderate to 2.9% in 2026.
For the United States specifically, the OECD now projects 2% growth in 2025, up from its previous estimate of 1.6%. However, this still marks a considerable slowdown from the robust 2.8% expansion seen in 2024, indicating that Trump’s trade barriers are having some dampening effect on the world’s largest economy.
Since returning to the White House in January, Trump has fundamentally altered American trade policy by imposing substantial tariffs on imported goods, creating a protectionist shield around what had been a relatively open economy. These measures were widely expected to hamper economic growth and increase consumer costs.
“The global economy has been resilient this year, despite concerns about a sharper slowdown in the wake of higher trade barriers and significant policy uncertainty,” noted OECD Secretary-General Mathias Cormann in his commentary. However, he cautioned that “we expect higher tariffs to gradually feed through to higher prices, reducing growth in household consumption and business investment.”
Several factors have helped mitigate the immediate impact of Trump’s trade policies. The actual tariffs implemented have been less severe than initially threatened during the spring. Additionally, many companies preemptively increased their imports of foreign goods into the United States before the new levies took effect, creating a buffer against immediate price increases.
Another significant factor boosting economic resilience has been the surge in investments related to artificial intelligence. These substantial capital flows have helped offset some of the negative effects of trade restrictions, providing momentum to both the U.S. and global economies during this transition period.
China, the world’s second-largest economy and a primary target of Trump’s trade measures, is still expected to maintain steady growth of 5% in 2025, unchanged from its 2024 performance. This stability suggests that while U.S.-China trade tensions remain high, Beijing has thus far managed to navigate the challenges without severe economic disruption.
The outlook for Europe appears less robust. The OECD forecasts that the 20 countries sharing the euro currency will collectively expand by just 1.3% in 2025. While this represents an improvement from the anemic 0.8% growth in 2024, it underscores the continuing economic challenges facing the eurozone.
Meanwhile, India continues to emerge as an economic powerhouse, with projected growth of 6.7% in 2025, accelerating from 6.5% in 2024. This performance confirms India’s position as the fastest-growing major economy, having overtaken China in this regard.
The OECD’s upgraded forecasts offer some reassurance to policymakers and businesses concerned about the potential global economic fallout from increasing protectionism. However, the organization’s warning about the gradual impact of tariffs suggests that the full effects of current trade policies may still lie ahead, with potential longer-term consequences for global supply chains, inflation, and economic growth.
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12 Comments
While the global economy appears to be holding up well, the OECD’s projections suggest that the US growth rate is expected to slow down significantly. This underscores the potential risks of protectionist policies.
The moderation in global growth from 3.3% to 2.9% in 2026 is also worth noting, as it indicates that the economic momentum may not be as strong in the long term.
The OECD’s revised growth forecast for the global economy is a positive development, but the potential risks posed by the US trade war shouldn’t be overlooked. It’s a delicate balancing act.
The moderation in global growth from 3.3% to 2.9% in 2026 is a sign that the economic momentum may not be as strong in the long term, and that’s something to keep an eye on.
It’s intriguing to see the OECD’s optimistic outlook for the global economy, especially given the ongoing trade tensions. The resilience of the international markets is quite remarkable.
The projected slowdown in US growth is a reminder that protectionist policies can have unintended consequences, even for the world’s largest economy.
The OECD’s revised growth forecast for the global economy is a welcome surprise, but the potential impact of the US trade war on other countries is still a concern. It will be crucial to monitor the situation closely.
The slowdown in US growth projections suggests that Trump’s protectionist policies are having some effect, despite the overall resilience of the global economy.
It’s encouraging to see the global economy showing resilience despite the trade tensions. The OECD’s revised growth forecast of 3.2% for 2025 is a positive sign, though the moderation to 2.9% in 2026 is worth watching.
The US slowdown from 2.8% to 2% growth is an indication that Trump’s protectionist policies are having some impact, even if the overall global outlook remains relatively strong.
The OECD’s optimism about global growth despite the trade war is intriguing. I wonder what factors are contributing to this resilience and whether it can be sustained in the long run.
It will be interesting to see how the US economy fares in the coming years as the impact of Trump’s trade barriers becomes more pronounced.