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55m ago

OECD Flags U.S. Slowdown Tied to Tariffs as It Upgrades Spain and Mexico

The Paris-based body ties a near-20% U.S. tariff rate to weaker growth, signaling rising inflation risks.

Mathias Cormann, director de la OCDE. | Edgar Sapiña
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Overview

  • OECD’s Interim Report projects U.S. growth at 1.8% in 2025 and 1.5% in 2026, linking the weaker path to protectionist measures.
  • The effective U.S. tariff rate reached about 19.5% in August, with the OECD warning more of the impact will emerge as inventory buffers fade.
  • Strong AI- and software-led investment has supported recent U.S. activity and capital inflows but has amplified asset overvaluation and financial‑stability risks.
  • The OECD raises global growth to 3.2% and the euro area to 1.2%, lifting Spain to 2.6% in 2025 and 2.0% in 2026 and Mexico to 0.8% in 2025.
  • Fed Chair Jerome Powell describes a complicated policy backdrop with inflation risks tilted higher and employment risks tilted lower.