Global Economy Holds Its Breath: The Full Force of Trump-Era Tariffs Still Looms, Warns OECD
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- September 24, 2025
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The global economy, a complex web of trade and finance, has yet to experience the full, seismic impact of the tariffs unleashed during the Trump administration, according to a stark warning from the Organisation for Economic Co-operation and Development (OECD). This isn't just a distant economic forecast; it's a real-time assessment, suggesting that the most significant disruptions could still be on the horizon, threatening to unravel the fragile threads of international commerce and investment.
While initial ripples have been felt, the OECD's latest report underscores a critical point: the true magnitude of these protectionist measures has not fully materialized.
This isn't cause for complacency, but rather a call for vigilance. The global economic landscape is fraught with latent risks, poised to escalate if the current détente in trade disputes falters or, worse, if a full-blown trade war reignites between economic titans like the United States and China.
At the heart of the OECD's concern lies the potential for a dangerous domino effect.
An escalation in trade hostilities could swiftly erode business investment, which thrives on certainty and predictability. As confidence wanes, companies become hesitant to expand, innovate, or hire, leading to a chilling effect across industries. This downward spiral of reduced investment and dwindling confidence would inevitably drag down global growth prospects, impacting livelihoods and national economies worldwide.
The numbers painted by the OECD are equally sobering.
Should tariffs escalate further, particularly between the US and China, the report indicates a potential cut of 0.5 percentage points from the United States' GDP. On a global scale, the impact would be even more profound, with a projected reduction of 0.6 percentage points in overall GDP growth. These aren't minor adjustments; they represent significant economic headwinds that could translate into millions of lost jobs, reduced wealth, and a slower pace of progress for nations grappling with existing challenges.
The current state of play, where major economies are still absorbing the initial shocks, masks the deeper, systemic vulnerabilities.
The OECD's message is clear: the world economy is treading on thin ice, and the lingering threat of past tariff policies, coupled with the potential for new ones, could yet unleash a powerful storm that shakes the very foundations of global prosperity. It's a critical moment for policymakers to reflect on the long-term consequences of protectionism and to prioritize stability and collaboration over confrontation.
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