Background and Causes
- New Tariffs and Protectionism: The tariffs introduced by Trump have unsettled financial markets and further burdened the economic situation. These measures are part of a protectionist policy aimed at protecting the domestic economy while simultaneously restricting international trade.
- Economic Uncertainty: Frequent changes in the implementation of these tariffs, along with overall uncertain economic policy, contribute to market unease. This results in a decrease in investments and a general economic slowdown.
- Demographic Factors: A decline in net immigration and a reduced public service in the US also contribute to the economic slowdown.
Effects on the US Economy
- Lowered Growth Forecasts: The OECD has lowered its growth forecasts for the US economy for 2025 to 1.6 percent, down from an earlier estimate of 2.2 percent in March. For 2026, growth is expected to be only 1.5 percent.
- Inflation: Inflation in the US could soon hover near 4 percent again, which is attributed to the increased costs from tariffs and general economic uncertainty.
Global Impacts
- Global Growth Forecasts: The OECD has also lowered global growth forecasts for 2025 to 2.9 percent, down from 3.1 percent in March. This decline is primarily due to the situation in North America, where the US, Canada, and Mexico are significantly affected.
- Regional Differences: While forecasts for North America have been sharply revised, the revisions for other regions have been less significant.
Overall, the lowered growth forecasts for the US economy and global conditions indicate that the protectionist measures of the US government have significant economic impacts. This development could have long-term consequences for international trade and economic stability.