The OECD raised its forecast for growth in the global economy for 2025 saying it was more resilient than expected in the first half of the year.
It now expects growth of 3.2%, up from the 2.9% it had predicted in June, partly due to “front loading” of activity as firms sought to complete deals before new US tariffs kicked in.
In the US, growth has been helped by strong investment in tech areas such as artificial intelligence (AI), and the OECD has increased its growth forecast for the US this year to 1.8% from 1.6%.
However, the OECD warned growth would “soften noticeably” in the second half of the year as the impact of higher tariffs is felt.
Tariffs are taxes on imported goods and Trump has imposed such levies on products arriving on American shores from various countries.
The OECD said US tariff rates had increased on almost all countries since May, with the overall effective rate hitting 19.5% at the end of August, the highest since 1933.
Speaking to the BBC, OECD chief economist Alvaro Pereira said it was “absolutely essential” that countries around the world got together to lower trade barriers.
“It’s important to remember that hundreds of millions of people came out of poverty because of trade growth, and also we know that open markets are usually good for business and good for technological development,” he said.
Trump has argued the import taxes will boost US manufacturing and jobs, but several economists have warned it will push up prices for US consumers.
The OECD said the full impact of the tariffs has yet to be seen. Some changes are being phased in over time, it said, while some companies are accepting smaller profit margins for now.
However, it said the impact was “becoming increasingly visible in spending choices, labour markets and consumer prices”.
“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,” it said.