As the U.S. launched its trade war, distorting trade patterns and sparking uncertainty, GDP growth plunged in the first quarter, according to new data from the Organization for Economic Cooperation and Development (OECD).
According to provisional estimates, the economic growth rate across the OECD dropped to just 0.1% in the first quarter, down from 0.5% in the previous quarter, the Paris-based group reported.
“This figure represents a departure from the higher and relatively stable growth rates recorded in the OECD area over the past two years,” it said.
For the G7 economies, the GDP growth rate slowed from 0.4% to 0.1% in the first quarter, the OECD noted.
Output contracted in the U.S. and Japan, falling from 0.6% to -0.1% and -0.2%, respectively, it reported.
The impact of higher tariffs drove the decline in U.S. output, the OECD noted.
“The rise in U.S. imports of goods, likely influenced by anticipated changes to trade tariffs, was the main drag on growth,” it said.
Elsewhere in the G7, growth slowed in Canada, but it picked up in the U.K. and Italy, and it turned positive in Germany and France, the OECD noted.
“Among other OECD economies for which data is available, 17 countries experienced slowdowns in growth in [the first quarter] compared with [the fourth quarter of 2024], resulting in negative growth in four countries,” it said.
Alongside the drop in quarterly growth, on a year-over-year basis, the GDP growth rate for the OECD slowed to 1.6% in the first quarter, down from 1.9% in the previous quarter.