The Organisation for Economic Co-operation and Development (OECD) has slightly revised downward its projections for global economic growth in 2025, citing lower growth expectations for the United States and the Eurozone.

Trade tensions fueled by Donald Trump’s return to the White House, along with geopolitical and political uncertainty in multiple countries, are dampening economic growth prospects, the OECD explained in justifying its downward revision.

The organization now expects global GDP to grow by 3.1% in 2025, compared to 3.3% in its December forecast.

As the U.S. president raises the specter of a trade war, the United States is projected to see GDP growth of 2.2% this year and 1.6% next year, according to the OECD, which has lowered its 2025 and 2026 growth forecasts for the U.S. economy by 0.2 and 0.5 percentage points, respectively.

The aggressiveness of U.S. trade policies, both implemented and planned, is particularly affecting neighboring countries Canada and Mexico. The outlook for these economies has dropped significantly: Canada’s growth forecast has been slashed to just 0.7%, while Mexico’s forecast has fallen by 2.5 percentage points, with the country now expected to enter a recession this year, according to the OECD.

Growth in the U.S., Mexico, and Canada is expected to slow further if planned tariff increases are enacted, the international economic body warns.

In its projections, the OECD has accounted for tariffs between the U.S., Canada, and Mexico, as well as new tariffs between the U.S. and China and tariffs on steel and aluminum. However, it has not factored in potential retaliatory tariffs or Trump’s threats of tariffs targeting the European Union.

Nonetheless, the OECD has again downgraded its growth forecasts for Germany and France, the Eurozone’s two largest economies, for the second consecutive time.

The organization now expects Germany’s GDP to grow by just 0.4% this year, down from its previous 0.7% forecast, while France’s growth projection has been lowered to 0.8%, a 0.1 percentage point drop.

For Japan, another key U.S. trading partner, the OECD now anticipates growth of 1.1% (down 0.4 percentage points), while China’s growth is projected to reach 4.8%.