The global economy is bracing for a significant slowdown, with the United States poised to suffer the sharpest drop among major economies. According to the latest outlook from the Organization for Economic Co-operation and Development (OECD), US growth is projected to slump from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026. This downward revision is attributed to higher tariffs, mounting trade policy uncertainty, and a significant slowdown in net immigration, among other factors.

The OECD’s warning comes as the world economy heads into its weakest stretch since the Covid-19 pandemic. The organization’s chief economist, Alvaro Pereira, has urged governments to strike deals to reduce trade barriers, cautioning that failure to do so will have serious consequences. “Otherwise, the growth impact is going to be quite significant,” Pereira warned, emphasizing that the repercussions will be felt globally.

The US is not alone in facing a slowdown, with Canada, Mexico, and China also expected to experience pronounced economic downturns. The OECD has downgraded forecasts for nearly all major economies compared to its December outlook, citing weakened economic prospects that will be felt worldwide. Global growth is projected to slow to 2.9% in both 2025 and 2026, below the 3%-plus pace seen every year since the pandemic-induced slump in 2020.

The OECD’s report also highlights the impact of trade policies on the US economy, particularly the sweeping tariffs imposed by President Donald Trump aimed at protecting domestic manufacturing. While some duties have been paused to allow time for negotiations, the strategy has sparked concerns about rising inflation and delayed interest rate cuts. The OECD expects US inflation to rise to nearly 4% by the end of 2025, remaining above the Federal Reserve’s 2% target into 2026.

As the global economy navigates this challenging period, governments and policymakers are under increasing pressure to find solutions to mitigate the slowdown. With the OECD warning of significant growth impacts and massive repercussions for everyone, the need for coordinated action to reduce trade barriers and stimulate economic growth has never been more pressing.