Tariff uncertainty expected to slow global economic growth this

President Donald Trump's efforts to reshape global trade with punitive tariff policies are pushing the United States and major economies toward slower economic growth, increasing uncertainty, and cooling investment and trade, according to projections released Tuesday. The full impact of the higher U.S. tariffs is still playing out, but effects are beginning to be felt by American consumers, who are starting to curb spending, and in labor markets in countries where the duties have led companies to shed workers or decrease hiring, the Organisation for Economic Cooperation and Development, an intergovernmental group based in Paris, said in its latest outlook. The global economy is forecast to grow 3.2% this year, compared with 3.3% in 2024. The estimate is a touch larger than previously expected because America's trading partners ramped up manufacturing to get their goods across the U.S. border before the tariffs kicked in, the organisation said. The new overall effective U.S. tariff rate now at an estimated 19.5%, the highest since 1933 has slowed economic and trade activity. As the full brunt of the tariffs ricochets through supply chains and labor markets and changes consumer behaviour, global growth will slow to 2.9% in 2026, the economic organisation said. "The global economy was more resilient than anticipated in the first half of 2025, but downside risks loom large as higher barriers to trade and geopolitical and policy uncertainty continue to weigh on activity in many economies," the report said. Europe is expected to grow just 1.2% this year and 1% in 2026, amid "increased trade frictions and geopolitical uncertainty," the organisation said. In China, which has been hit hard by Trump's trade war and punitive tariffs, growth is projected to slow to 4.9% this year, from 5% last year, and to 4.4% in 2026.