The OECD has lowered its global GDP growth projection to 2.9% for both 2025 and 2026, citing heightened trade tensions and policy uncertainty, especially due to U.S. tariffs. Yet Taiwan could be shielded from the worst effects, given the exceptional growth of the AI industry.
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00:00The global economy is cooling. That's the assessment of the OECD, which released a report downgrading its economic outlook for 2025.
00:09The organization now expects global real GDP growth to drop from 3.3% last year to 2.9% for both 2025 and 2026.
00:19The OECD, which represents 37 developed nations, made clear during the report's release that U.S. tariffs and the global trade war are to blame.
00:27And the context is the significantly increased economic and tried policy uncertainty, tighter financial conditions, lower business and consumer confidence.
00:43The news comes as U.S. President Donald Trump doubled tariffs on steel and aluminum and set a deadline for countries to offer up better trade deals.
00:50But his so-called reciprocal tariffs are now caught up in court challenges and could be struck down as soon as next week.
00:57The one bright spot in the report? Artificial intelligence, a technology powered by Taiwan's semiconductor industry that's seeing high levels of investment.
01:06I've been speaking with economists today about how Taiwan might fare as this trade war continues, and here's what one told me.
01:12So going forward in the second half of 2025, the positive news is that Taiwan will continue to benefit from the AI boom driven by the semiconductor industry as companies invest more in this industry.
01:27However, the downside is also that Taiwan will see risk in the interest rate side that it is not able to cut as many times as many other countries.
01:37So this is why we expect Taiwan to still grow at 2.8 percent this year, which is slightly lower than the OECD expectation.
01:46So while Taiwan isn't fully escaping the effects of this economic uncertainty, its central role in one of the fastest growing sectors of the world economy is providing it with at least some cushion.
01:58Devin Tsai and Chris Gorin for Taiwan Plus.