World Weathering U.S. Tariff Shock ‘Surprisingly Well,’ Says OECD

The global economy is holding up better than expected despite escalating U.S. trade tariffs, the Organisation for Economic Co-operation and Development said in its latest outlook. The Paris-based policy body credited strong investment in artificial intelligence and supportive government policies for helping cushion the impact of rising trade barriers.

The OECD raised its growth forecasts for the U.S. and the euro area for this year and 2025, with smaller upgrades for other major economies. However, it warned that the full effects of higher U.S. tariffs have yet to be felt. Global growth is expected to ease to 2.9% in 2026 from 3.2% in 2025 as tariff pressures build.

Secretary General Mathias Cormann said the world economy has shown resilience this year, even as trade flows slowed in the second quarter. He noted that higher tariffs are likely to lift prices, weighing on household spending and business investment in the months ahead.

The impact of tariff measures introduced under President Donald Trump has been difficult to gauge. The OECD lifted its U.S. growth projection three times this year as AI-driven investment offset weaker consumer spending and lower government purchases. It now expects U.S. growth of 2% as construction of data centers and other tech infrastructure accelerates. Without AI-related capital spending, the U.S. economy would have contracted by 0.1% in the first half, the group said.

Luiz de Mello, the OECD’s director of country studies, said companies are investing heavily to stay competitive as digital technologies evolve, even amid tariff uncertainty. But the agency also cautioned that surging AI investment carries risks, including the possibility of sharp market corrections if valuations weaken or financing conditions tighten.

Overall, the OECD said the global picture reflects both resilience and fragility, with major economies gaining momentum, but still exposed to shifting trade rules, uneven demand and volatility across technology markets.