Current economic conditions feel a little like a roller coaster suspended at the very peak just before the first big drop, queasy stomach and all. The long climb up builds expectations for the coming plunge, but it isn’t here yet.
But 2026 might be the year that the economic coaster finally picks up steam as it heads downhill. While the US and global economies have proven more resilient than expected this year, Trump’s tariffs will weaken global growth in 2026, especially for the US, according to the Organization for Economic Cooperation and Development’s (OECD) interim Economic Outlook report.
The consequences of tariffs, and other Trump policies, are just starting to show up in the economy months after their implementation, in part because of how companies prepared for them, according to the OECD.
“The impacts of higher tariff rates are yet to be fully felt in the US economy. This reflects a combination of factors, with firms making use of inventories and ample profit margins to avoid or absorb the initial impact of higher tariffs, lags between the announcement and imposition of higher tariff rates, and the exemption of goods already in transit from higher tariff rates,” according to the OECD.
But that grace period may be ending soon. The OECD projects that US growth will “fall from 2.8% in 2024 to 1.8% in 2025 and 1.5% in 2026.” Higher tariffs, slowing immigration, and Trump’s slashing of the federal workforce are all contributing to the lower growth projections.
“Growth is expected to soften noticeably in the second half of this year, as front-loading activity unwinds and higher effective tariff rates on imports to the United States and China dampen investment and trade growth,” the OECD said.
Not just tariffs. The OECD sees other signs of weakness in the global economy that could cause slowdowns. Slumping labor markets, reemerging inflation, and drops in consumer confidence are also contributing to lower growth predictions.
The OECD did note two possible upsides for economic growth: a potential easing of trade restrictions and faster advances in AI technology.
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