Growth forecasts from Canada and Mexico cut by the OECD

The growing commercial tariffs of the president of the United States, will affect world growth and increase inflation, the OECD has predicted in its last prognosis.

It is forecast that Canada and Mexico will see the greatest impact, since they have imposed the toughest rates, but it is also expected that the growth of the United States will be affected.

The OECD has surpassed half of its growth perspective for Canada for this year and next, while waiting for Mexico to be pushed to a recession.

Trump has imposed 25% tariffs on all imports of steel and aluminum. The United States has also imposed 25% tariffs on other imports from Mexico and Canada, with some exemptions, and a 20% tax in Chinese products.

In response, Canada and the EU have announced retaliation rates.

The OECD, based in Paris, said that the highest commercial barriers and the “increased geopolitical and political uncertainty” was to reach investment and spending at home.

In the last forecast of the OECD:

• It is predicted that Canada’s economy will grow by just 0.7% this year and 2026, compared to the previous 2% prognosis during both years.
• Now it is forecast that Mexico will hire 1.3% this year and reduce an additional 0.6% next year, instead of growing by 1.2% and 1.6% as expected above
• Growth in the US has also been reduced, with a growth of 2.2% expected this year and 1.6% in 2025, below previous 2.4% and 2.1% forecasts
• Although the United States imposes tariffs on China, the OECD has increased its growth forecast for the country slightly to 4.8%.

The OECD said that the developed commercial war was established to increase inflation, which means that interest rates will probably remain higher.

“There are significant risks,” he warned. “The additional fragmentation of the global economy is a key concern.

“The highest and wider increases in commercial barriers would affect growth worldwide and join inflation.”

The OECD said that for the world economy, growth would decrease from 3.2% in 2024 to 3.1% in 2025, largely as a result of commercial tensions.

Last week, Elon Musk Tesla’s electric car firm warned That he, and other US exporters could be harmed by commercial battle.

In a letter to the United States commercial representative, the firm said that US exporters were “exposed to disproportionate impacts” if other countries retaliate to Trump’s rates.

The OECD reduced its growth forecast for the United Kingdom economy to 1.4% in 2025, from its previous forecast of 1.7% and 1.2% in 2026, below 1.3%.

However, the forecast is more optimistic than the Bank of England, than earlier this month it reduced its growth forecast from the United Kingdom by 2025 to 0.75%.