OECD warns trade fragmentation could slow growth, and other international trade news to read this month

The OECD’s latest outlook highlights growing risks to global trade as rising tariffs, inflation and policy uncertainty weigh on economic momentum.

While global GDP expanded steadily in 2024, driven by strong performances in the US and China, signs of a slowdown are emerging. Weaker business sentiment and escalating trade restrictions could further strain investment and consumer demand, the March 2025 report notes.

Here are the key takeaways:

International cooperation could help avoid an escalation of trade tensions, the OECD says. Policymakers can also work to ensure markets are resilient by focusing on education, skills, investment and labour mobility.

Bloomberg reports that the UK and India are "very close" to finalizing a free trade agreement after restarting talks just weeks ago, according to Nidhi Tripathi, economic minister at India’s High Commission in London.

"This agreement is going to be a game-changer for both of us," Tripathi said at the British Chambers of Commerce trade conference in London on 20 March, adding that it would bring much-needed predictability and certainty for services suppliers.

The talks, which began under former UK Prime Minister Boris Johnson, were revived last month following elections in both countries. Despite missed deadlines, UK officials are optimistic about the progress made.

Bilateral trade between India and the UK reached £41 billion ($52 billion) in the year ending September 2024, which supports 600,000 jobs across the two countries, according to UK government estimates.

German steel group Salzgitter says stagnation in the German economy is mainly due to high energy costs, weak demand and rising competition from China. It also points to growing export uncertainty from US trade tensions but sees potential for recovery if the €500 billion infrastructure fund proposed by the new government takes effect by mid-2025.

The Swedish government will increase spending by 5.8 billion crowns ($573 million) this year to stimulate the economy, focusing primarily on the construction sector. With the economy still recovering and high unemployment, Finance Minister Elisabeth Svantesson described global conditions as "brutally uncertain" amid ongoing trade tensions.

Mark Carney, in his first overseas trip as Canadian prime minister, has visited France and the UK to strengthen alliances in a time of trade tensions, The Guardian reports. In Paris, he and French President Macron stressed the need for a united front against global economic and geopolitical challenges.

US President Donald Trump has invoked emergency powers to increase domestic production of critical minerals widely used across the economy. The move is part of a broader effort to boost US energy and mineral production amid growing trade tensions with China, Canada and other major mineral suppliers.

A study co-authored by Ireland's finance ministry warns that the country's economy could be up to 1.8% smaller by 2032 if permanent "tit-for-tat" tariffs are implemented between the US and EU.

India, the world's second-largest sugar producer, is expected to begin the new sugar season in October with comfortable opening stocks, despite lower-than-expected production and 1 million tons of exports, according to a leading producers' body.

Japanese companies have agreed to a 5.4% pay hike this year, according to Rengo, the country's largest union group. While slightly lower than the preliminary 5.46%, it marks the biggest increase in 34 years. Final figures are expected after wage talks with smaller companies conclude in the coming months.

This news comes as a Reuters survey finds that more than three-quarters of Japanese companies plan to continue promoting workplace diversity and decarbonization, despite recent policy shifts in the United States.

Once a relic of the 1970s, stagflation - slowing growth paired with rising inflation - is making a comeback in economic debates, writes John Letzing, the Forum's Digital Editor, Economics. With heightened government intervention and geopolitical tensions, concerns are growing that it may not be a thing of the past. Read more in his analysis here.

India and the EU aim to finalize a free trade deal by year-end, despite past hurdles in agriculture, pharma, and autos. “This could be a defining partnership,” said European Commission President Ursula von der Leyen. Here's what that could mean.

Emissions from traded goods account for 23% of global greenhouse gases, highlighting climate co-dependence. Two experts examine current trade policies and what more can be done.