Trade tensions in America are brewing a bitter economic cocktail — stirring up concerns and shaking its own stability. The Organization for Economic Co-operation and Development (OECD) has significantly downgraded its forecast for US economic growth to 2.2% in 2025 and just 1.6% in 2026 — down from previous projections of 2.4% and 2.1% respectively. This pessimistic outlook stems directly from President Trump’s aggressive tariff policies, which threaten to upend global trade and drive inflation higher.

• US trading partners are facing even grimmer outlooks — Canada’s growth forecast was cut from 2.0% to just 0.7%, while Mexico’s economy is set to shrink by 1.3% rather than grow by 1.2%.
• Additionally, global economic growth is expected to decelerate to 3.1% in 2025 and 3.0% in 2026, down from previous estimates of 3.3% for both years.

Pain before gain? Treasury Secretary Scott Bessent attempted to calm markets by characterizing recent corrections as “healthy,” arguing they prevent the type of “euphoric markets” that preceded the 2008 crisis. However, the economic outlook appears increasingly precarious, with consumer sentiment plunging for three straight months and the Fed caught between inflation concerns and growth risks. In Washington DC, the effects of federal workforce reductions are already causing economic struggles, with Moody’s predicting a local recession this year. Nonetheless, while acknowledging there are “no guarantees” against a recession, Bessent expressed confidence that Trump’s pro-business policies will ultimately strengthen both markets and the economy.