The global economy is still on course for a substantial blow from Donald Trump’s trade measures despite showing greater resilience than expected in recent months, the OECD said.
What the OECD Reports
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Global growth in 2025 is now expected at 3.2%, up from earlier predictions. The Economic Times+2China Daily Asia+2
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For 2026, the forecast slows to 2.9%. The Economic Times+2China Daily Asia+2
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The OECD warns that although growth has shown more resilience than anticipated, the full impacts of recent tariff hikes—especially U.S. import duties—have not yet been fully felt. China Daily Asia+2Bloomberg+2
Key Drivers Behind the Figures
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Front-loading of imports: Companies imported in advance of higher tariffs, which created a temporary buffer. The Economic Times+1
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Strong investment in certain sectors (especially AI in the U.S.) and fiscal stimulus (notably in China) are helping offset the drag from trade policy (for now). The Economic Times+1
Risks & Pain Points in 2026
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As front-loading diminishes, import activity will likely normalize—meaning the temporary support to growth fades. The Economic Times+1
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Higher tariffs + continuing policy uncertainty are expected to weigh on trade, investment, and consumer prices. China Daily Asia+2The Economic Times+2
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U.S. is singled out as being especially exposed: its economy is expected to slow, and many countries will feel spillovers because of its central role. China Daily Asia+1
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Inflationary pressures could reignite, especially via higher import costs. Also, labour markets are showing early signs of weakening in some places. China Daily Asia
Implications
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For businesses & investors: You may see rising input costs, more volatile supply chains, and compressed profit margins (esp. in sectors dependent on imports).
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For trade policy: Predictability becomes even more important. Sudden tariff changes or trade disputes can have outsized knock-on effects.
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For consumers: Potential for higher prices, particularly for imported goods; slowing wage growth in some markets may reduce real purchasing power.
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For policy makers: There’s tension between protecting domestic industries via tariffs and the longer-term damage such trade barriers can cause (slower growth, inflation, supply chain disruption). Monetary policy might need to stay more vigilant.
