OECD points to potential economic icebergs ahead
Rising trade restrictions between the US and other countries could ‘inflict significant damage’ on global output and supply chains
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THE latest Global Economic Outlook by the Organisation for Economic Co-operation and Development (OECD) rightly highlighted the resilience of the US and wider global economy in 2025. Yet, it also pointed to significant remaining potential icebergs on the horizon, especially US President Donald Trump’s tariffs, that could change the economic narrative in a “fragile” 2026 and beyond.
Yale University Budget Lab researchers estimated that the overall average effective US tariff rate for imports has jumped to some 16.8 per cent. This is the highest since the Great Depression of the 1930s, and a sharp increase from the roughly 2.4 per cent at the start of 2025.
The OECD report adds to concerns that a combination of legal uncertainty over the tariffs (currently being reviewed by the US Supreme Court); potential further retaliation to the US tariffs; and ongoing geopolitical challenges remains an underappreciated test for the global economy.
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