Tariff Hikes Threaten North American Growth and Ignite Inflation Fears

The OECD warns that President Trump's tariff hikes could slow growth in Canada, Mexico, and the US while increasing inflation. Projected growth rates in these nations are lowered significantly due to the trade policy impacts, with North American economies facing substantial economic slowdown risks.

The Organisation for Economic Cooperation and Development (OECD) has sounded an alarm over the economic repercussions of President Donald Trump’s tariff hikes. The policy changes are projected to decelerate growth across North America and trigger inflation, according to their latest economic outlook announced on Monday.

In-depth analysis by the OECD indicates that the US faces a potential economic slowdown that could negate the additional revenue from tariffs. Projected growth has been adjusted from 2.4% to 2.2% for this year and even lower for next year, while Mexico and Canada are also expected to struggle under the new trade conditions.

Further complications could arise if the trade war between the US and its neighbors intensifies, resulting in increased costs for households. The OECD emphasizes that while emerging markets like China may buffer some global impacts, North American economies remain primarily at risk.

(With inputs from agencies.)