OECD Warns of Recessions If Iran War Drags On

The OECD warned that if the conflict with Iran stretches into 2027, it could trigger multiple recessions and make that year the weakest for global economic growth this century, excepting only COVID and the global financial crisis. That warning came on a day when the U.S. and Iran traded heavy fire overnight, with Iran firing ballistic missiles at American bases in Bahrain and Kuwait. Separately, the U.S. formally proposed new tariffs on major trading partners under a different legal authority, and primary elections in California and Iowa produced notable results, including a rare rebuke for President Trump.

Tariffs Get a New Legal Foundation

The Office of the U.S. Trade Representative proposed tariffs of at least 10% on Canada, Mexico, the UK, and the EU, following an investigation into goods allegedly produced by forced labor. A separate set of tariffs at 12.5% was proposed for China, Japan, India, South Korea, and others. These are not new tariffs in substance — they replace the "reciprocal tariffs" Trump announced on Liberation Day last April, which the Supreme Court ruled had no legal basis. The administration had been collecting those sums under an emergency justification with a six-month lifespan expiring in July, so it needed a new legal rationale.