The Organisation for Economic Co-operation and Development (OECD) has released its latest economic projections, indicating that the tariff policies of the Trump administration are likely to hinder growth in the United States.

This report, made public on March 17, 2025, provides insights into economic trajectories both within the Eurozone and beyond, amid an environment marked by geopolitical uncertainties and trade fragmentation.

Alvaro Pereira, the OECD's Chief Economist, described Spain as a beacon of economic strength in Europe, suggesting that it is currently outperforming many other nations.

The OECD forecasts that the Spanish economy will grow more than the Eurozone average over the next two years, upgrading its GDP growth estimate for Spain to 2.6% in 2025 from earlier projections of 2.3%, and adjusting the 2026 estimate from 2% to 2.1%.

One contributing factor to Spain's robust performance is its resilient tourism sector and improved real wages, which have surpassed pre-pandemic levels of 2019. This positions Spain as one of the few G20 nations to achieve such a milestone.

The OECD's forecast does not yet account for the potential impacts of tariffs on Spain's economy.

However, it has begun to integrate the effects of proposed increases in tariffs (up to 25%) in the U.S., Mexico, and Canada into its analysis.

The impact of these tariffs is projected to be detrimental not only to the American economy but even more profoundly to its neighboring countries.

The report clarifies that while a recession in the U.S. is not anticipated, the economy is expected to decelerate, with growth estimates being revised down to 2.2% for 2025, a decrease of two-tenths from earlier forecasts, and further declining to 1.6% in 2026.

Mexico would face the most severe economic challenges, with the OECD projecting a contraction of 1.3% in 2025 and a further reduction of 0.6% in 2026, significantly lower than previous growth expectations of 1.2% and 1.6%, respectively.

Similarly, Canada's growth is expected to drop to 0.7% over the same period, down from earlier estimates that had anticipated growth rates of nearly 2%.

Globally, the OECD predicts a slight slowdown in overall economic growth from 3.2% in 2024 to 3.1% in 2025, and then to 3% in 2026, due in part to these tariff policies.

The report outlines a scenario of trade conflict, suggesting that should retaliatory tariff increases occur, the U.S. would see an economic impact with growth 0.7 percentage points lower than it would have been under normal circumstances.

The direct cost to American households might rise to approximately $1,600 per person.

In Europe, trade-dependent economies are predicted to experience slower growth, with estimates indicating a reduction of three-tenths, lowering projected growth to 1% this year and the next.

However, by 2026, Europe is expected to exhibit one of the few improvements in GDP, forecasting a growth of 1.2%.

The report also examines Argentina's economic situation, noting a potential post-election 'Milei Effect.' While the economy was in recession in 2024 with a contraction of 1.8%, it is now anticipated to rebound by 5.7% this year and 4.8% the next, despite persistently high inflation projected above 20%.

Regarding inflation trends, the OECD has noted an upward revision in inflation forecasts across most member countries for this year.

Inflation has shown resilience, particularly in the service sector, prompting concerns that higher-than-expected inflation might result in stricter monetary policies and market volatility.

The OECD concludes that a return to previous economic conditions without the imposition of new tariffs would yield more favorable outcomes for all parties involved.