Donald Trump’s trade war has been linked to the sharpest economic slowdown among advanced economies since the height of the COVID crisis.
Economic growth across developed nations nearly stalled in the first quarter of the year, rising just 0.1%, according to data from the Organisation for Economic Cooperation and Development (OECD). This marks a steep drop from the 0.5% expansion seen in the final quarter of 2024 and represents the weakest performance since the second quarter of 2020, when global lockdowns were in full force.
“The figure represents a departure from the higher and relatively stable growth rates recorded in the OECD area over the past two years,” the OECD said.
The US economy contracted by 0.1% during the quarter—its first decline since early 2022—while Japan also posted negative growth, shrinking by 0.2%. Trump’s tariffs spurred a surge in US imports ahead of their implementation, giving a short-term lift to exporting nations but ultimately dragging on American GDP by increasing overseas spending.
Germany saw modest growth of 0.2%, while the UK posted a stronger-than-expected 0.7% rise in GDP, driven largely by a rebound in business investment.
“The rise in US imports of goods, likely influenced by anticipated changes to trade tariffs, was the main drag on growth,” the OECD said. “Growth also slowed in Canada.”
Overall, the OECD said heightened uncertainty and trade disruptions appear to have significantly dampened momentum across the developed world.
