The Organisation for Economic Co-operation and Development (OECD) has issued a warning about the dangers of increasing protectionism, stating that it poses a substantial risk to global economic expansion. In its most recent economic outlook, the OECD revised its growth forecasts downwards for several major economies, citing trade tensions as a key factor.
The report emphasizes that escalating trade disputes, particularly between the United States and its trading partners, could disrupt global supply chains, increase uncertainty, and ultimately stifle investment. The OECD projects that these trade conflicts could shave off a significant portion of global GDP growth in the coming years.
Specifically, the OECD highlighted the following concerns:
- Increased tariffs and non-tariff barriers to trade
- Disruptions to global value chains
- Reduced business confidence and investment
- Potential for currency volatility
The OECD urged countries to de-escalate trade tensions and work towards a more open and rules-based international trading system. It also called for governments to implement policies to boost productivity and support inclusive growth.
“The world economy faces significant challenges, and trade tensions are a major headwind,” said OECD Chief Economist Laurence Boone. “It is crucial that countries work together to resolve these disputes and avoid further escalation.”
The OECD’s warning underscores the growing concern among international organizations and policymakers about the potential negative consequences of protectionist policies on the global economy.
