US: OECD Warns Trump's Trade Agenda Will Increase Inflation, Slow Growth

The Organization for Economic Cooperation and Development (OECD) has produced a model suggesting that Trump’s trade agenda will increase inflation and slow growth. 

• OECD Secretary General Mathias Cormann said: “We are pointing to significant downside risks including when it comes to further trade fragmentation or increased trade tensions. If further decisions in the same directions will be made down the track then of course we would have to revise our assessments.”
• Axios notes: “The OECD modeled a scenario where the U.S. raises tariffs another 10%, and all other countries respond with a similar counter-tariff. Three years out, all major economies and economic areas would see lower growth than they would have otherwise — with the biggest impacts to Mexico and the U.S.”
• Bloomberg notes: “Nations currently in the eye of the trade storm may see even sharper decelerations, with Canada’s growth rate tumbling to less than half the OECD’s December prediction, Mexico entering a recession, and the annual expansion in the US wilting to 1.6% next year — the weakest since 2011 aside from the initial Covid pandemic hit suffered in 2020.”

Figure 1: "Estimated Effect of GDP of Additional 10% Global Tariffs, in Percentage Points, Three Years from Current Baseline