Global Economy Showing Resilience To Trump Tariffs: Report

• While Donald Trump’s tariffs have caused an uptick in inflation, the strong spending by tech firms has helped offset the blows, the OECD said.
• Without the AI spending, the U.S. GDP contracted by 0.1% in the first half of 2025.
• The OECD warned that further increases or swift changes in trade barriers could hurt growth.

The global economy is holding up better than expected despite Donald Trump’s tariffs, aided by ever-increasing investments in artificial intelligence, the Organisation for Economic Cooperation and Development (OECD) said on Tuesday.

The Paris-based organization projected that the U.S. economy would grow by 2% in 2025, up from its September forecast of 1.8%, before slowing to 1.7% in 2026. It also projected that the Chinese economy would grow by 5% this year, up from an earlier forecast of 4.9%.

What Did The OECD Say?

While Donald Trump’s tariffs have caused an uptick in inflation, the strong spending by tech firms has helped offset the blows, the OECD said. According to a Reuters News report, citing a recent note by Sage Advisory, AI capital expenditure is projected to rise to $600 billion by 2027, compared with little over $200 billion in 2024 and just under $400 billion in 2025, and net debt issuance is expected to reach $100 billion in 2026.

The OECD stated that despite rapidly cooling job growth and numerous other factors, real U.S. GDP growth through the first half of 2025 was “fairly resilient.” However, without the AI spending, the U.S. GDP contracted by 0.1%.

“Everything that has to do with firms purchasing equipment that will allow them to thrive in this new technological age, all that has lifted economic activity in ways that have somehow offset some of the negative impacts related to policy uncertainty and related to the effect of tariffs on economic activity,” stated Luiz de Mello, the OECD’s director of country studies, according to a Bloomberg News report.

The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (QQQ), which tracks the top 100 NASDAQ companies, have advanced 15.8% and 21% this year.

Impact Of Further Tariff Hikes

The OECD also kept its global GDP growth forecast unchanged at 3.2% in 2025 and 2.9% in 2026. It expects growth to pick up to 3.1% in 2027 and also estimates that inflation would return to target in almost all major economies by mid-2027.

However, the OECD warned that further increases or swift changes in trade barriers, including the application of higher tariff rates to a broader range of goods or stricter controls on the export of critical products such as rare earth elements, could hurt growth, add to policy uncertainty, and generate significant disruptions in global supply chains.

Also See: Exxon In Talks To Acquire Lukoil’s Giant Iraq Oilfield Stake As Sanctions Force Russian Firm's Exit: Report

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