Trump claims the economy is ‘booming’, but a global forecast suggests otherwise.
June 3, 2025.
US President Donald Trump asserted that his tariffs are fueling remarkable economic growth, stating on Truth Social, “Because of Tariffs, our Economy is BOOMING!” However, just hours later, the Organisation for Economic Co-operation and Development (OECD) in Paris delivered a starkly contrasting assessment. Their latest forecast reveals a troubling global slowdown, attributing part of this downturn to the very trade policies that Trump steadfastly champions.
Both global and US growth are projected to decline.
The OECD forecasts a decline in global economic growth to 2.9% in 2025, a reduction from the anticipated 3.3% in 2024. The US economy is projected to experience a more pronounced deceleration, dropping from 2.8% this year to a mere 1.6% in 2025, as reported by Bloomberg. OECD economists have identified trade disruptions, heightened uncertainty, and persistent inflationary pressures as principal factors contributing to this pessimistic outlook. "Diminished growth and reduced trade will adversely affect incomes and impede job creation," stated Alvaro Pereira, the OECD’s chief economist. Furthermore, the report highlights that a contracting federal workforce in the United States is further exacerbating the economic downturn.
OECD highlights Trump’s tariffs as a significant threat.
The OECD has directly attributed the dismal forecast to the aggressive trade policies implemented by the Trump administration. Following his announcement on April 2, termed “Liberation Day,” which imposed tariffs of 145 per cent on Chinese goods, global markets have experienced significant turbulence. In retaliation, China enacted a 125 per cent tariff on US imports, thereby triggering a comprehensive trade conflict that has seen both countries imposing tariffs on a wide range of goods, from agricultural products to high-tech electronics.
While both nations reached a consensus to de-escalate tensions in mid-May, with the US reducing its tariffs to 30 per cent (a significant reduction from the initial 145 per cent) and China reciprocating with a decrease to 10 per cent (down from the initial 125 per cent), hostilities have promptly resurfaced.
Over the weekend, Trump asserted that China had “TOTALLY VIOLATED” the agreement, while Beijing contended that the US had consistently instigated “new trade frictions.”
OECD trade ministers convene in Paris amidst rising concerns
As the trade conflict intensifies, trade ministers from 38 OECD member countries are gathering in Paris this week. Notable attendees include U.S. Trade Representative Jamieson Greer, EU Commissioner Maros Sefcovic, and Lin Feng from China’s Ministry of Commerce. The agenda is unequivocal: to reduce tariffs, mitigate global tensions, and restore confidence in trade systems that have been destabilised by months of reciprocal actions. This underscores the importance of restoring trust in the trade system.
Nevertheless, as the world's foremost economies engage in this confrontation, the OECD has issued a warning that the situation may deteriorate rapidly should retaliatory measures continue, investor confidence further wane, or stock markets experience another decline. This underscores the urgent need for attention and action.
Also Read: Silent Exodus
Trump's Tariffs
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