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OECD Forecasts Slower Growth Amid Rising U.S. Tariffs

9/23/2025

41 8 Full Breakdown

Summary

Story summary

Organisation for Economic Co-operation and Development (OECD) projects growth at 3.2% in 2025, down from 3.3% in 2024, due to tariffs.
The effective U.S. tariff rate has reached 19.5%, the highest since 1933.
U.S. growth is forecast at 1.8% in 2025 and 1.5% in 2026.
China’s growth is expected to be 4.9% this year as exports fade and fiscal support wanes.

History

Historical Context

The Smoot-Hawley Tariff Act of 1930 raised U.S. tariffs to a peak of 19.5% in 1933, severely restricting international trade and contributing to the Great Depression. This historical precedent underscores the potential for high tariffs to stifle economic growth, as reflected in the OECD's forecast of only 1.8% U.S. growth in 2025 amid ongoing trade tensions.

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Story summary

Organisation for Economic Co-operation and Development (OECD) projects growth at 3.2% in 2025, down from 3.3% in 2024, due to tariffs.
The effective U.S. tariff rate has reached 19.5%, the highest since 1933.
U.S. growth is forecast at 1.8% in 2025 and 1.5% in 2026.
China’s growth is expected to be 4.9% this year as exports fade and fiscal support wanes.

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