OECD cuts global growth forecast

Nick Beams

The Organisation for Economic Cooperation and Development, a grouping of 38 economies, has significantly cut its forecast for global growth because of the uncertainty created by the trade and tariff war being waged by US President Trump.

It said the world economy was heading for its weakest period of growth since it was hit by the COVID-19 pandemic in 2020.

OECD cuts global growth forecast in light of tariff threat [Photo by Statista / CC BY-ND 4.0]

Global growth, it forecast, would be just 2.9 percent in 2025 and 2026, compared to growth of 3.3 percent in 2024, after it had exceeded 3 percent in every year since 2020.

Warning of the impact of the Trump tariffs, it said the “significant increase in trade barriers as well as in economic and trade policy uncertainty” had “negatively impacted business and consumer confidence and is set to hold back trade and investment.”

“Weakened economic prospects will be felt around the world, with almost no exception. Lower growth and less trade will hit income and slow job growth,” the editorial introducing the report said.

It said risks had risen “considerably” and could increase even further, and that additional trade barriers might be introduced. According to our simulations, additional tariffs would further reduce global growth prospects and fuel inflation, dampening global growth even more.”

It also warned that rising government debt posed financial risks and that “historically elevated equity valuations also increase the vulnerability to negative shocks in financial markets.”

It said “by far” the most important policy priority was to ease trade tensions and lower tariffs to revive growth and avoid rising prices. But as if to emphasize there is absolutely no chance of this taking place, Trump signed an executive order yesterday, lifting the tariffs on steel and aluminum from 25 percent to 50 percent, to come into effect today.

In what amounted to a desperate and fearful plea for a reversal of the trade war, the OECD’s chief economist Álvaro Pereira said countries need to make deals to lower trade barriers. “Otherwise, the growth impact is going to be quite significant. This has massive repercussions for everyone.”

The report noted that boosting investment was necessary to promote economic revival and that it had been too low since the global financial crisis of 2008. One of the reasons is that financial parasitism and speculation have assumed an ever-increasing role in profit accumulation.

“Despite rising profits, firms have shied away from fixed-capital investment in favor of accumulating financial assets and returning funds to shareholders,” it said.

The report pointed to a significant downturn in US growth. It would fall from 2.8 percent in 2024 to 1.6 percent in 2025 and 1.5 percent in 2026. The OECD had previously forecast US growth for this year at 2.2 percent. At the same time, inflation would increase, preventing the Federal Reserve from cutting interest rates to provide a boost to the economy.

Predictably, the downgrade in US growth prospects brought denunciations from the White House, with Trump’s spokesperson Kush Desai declaring that the OECD “joins a growing list of doomsayers that are untethered to reality.”

But the report is very much in line with other assessments.

The chief international economist for the financial firm ING, James Knightley, said the OECD downgrade “adds more credibility to the private sector view that the US economy will feel a cold wind until we start getting clarity on the trade and tax environment that businesses and households will face.”

Goldman Sachs has said it expects US growth of only 1.7 percent this year, and the Fed has downgraded its forecast from 2.1 percent to 1.7 percent.

These forecasts are being backed up by data. The ISM survey of purchasing managers in the manufacturing sector came in at 48.5 for May, below the level of 50 that is the boundary between expansion and contraction.

The result was below expectations, lower than the previous month, and the fourth consecutive monthly fall in the index.

The chief economist at the tax and consulting firm RSM US, Joe Brusuelas, told the Financial Times: “The confusion of trade policies is making it nearly impossible for supply managers to source goods efficiently. This tells me that we may run into bottlenecks in terms of production leading to shortages.”

The downgrade for the US economy was replicated across the board, with the OECD cutting its forecasts for three-quarters of the G20 group of economies from the predictions it made in March.

Chinese growth would slow from 5 percent last year to 4.7 percent in 2025 and 4.3 percent in 2026. The eurozone will grow by only 1 percent this year and 1.2 percent in 2026. Japan will grow by anemic 0.7 percent this year and 0.4 percent in 2026. The figures for the UK are 1.3 percent this year and 1 percent next year.

Global trade is expected to grow at an already historically low level of 2.8 percent this year and then fall further to 2.2 percent in 2026. And given that the Trump tariff hikes have yet to come fully into effect, the fall could be even sharper.

The social implications of the lower growth rate were set out, albeit indirectly, in the warnings over the rising levels of government debt contained in the report.

It said that “restoring fiscal discipline is key for countries to avoid fiscal sustainability problems and build buffers for future shocks” and given the already high debt levels, countries had to ensure that public debt is on a sustainable path with the development of credible plans to show “how countries intend to ease pressures on public finances.”

Translated from the economic jargon in which such reports are written, this means major attacks on social spending, as well as job cuts resulting from lower growth, which will be intensified by the increases in military spending being undertaken by governments around the world.

Democrat Lee Jae-myung wins South Korea’s presidential election

Ben McGrath

South Korean new President Lee Jae-Myung takes an oath during his inauguration ceremony at the National Assembly in Seoul, South Korea Wednesday, June 4, 2025. [AP Photo/Jeon Heon-Kyun]

Lee Jae-myung of the Democratic Party (DP) was elected as president of South Korea on Tuesday, defeating his primary challenger Kim Moon-soo of the People Power Party (PPP). Lee immediately began his five-year term on Wednesday.

Lee defeated Kim by more than 2.8 million votes, taking 49.42 percent of the total to the latter’s 41.15 percent. Lee Jun-seok of the right-wing Reform Party took most of the remainder of the votes with 8.34 percent.

Tuesday’s election was triggered by the removal of former president Yoon Suk-yeol of the PPP in April, following impeachment proceedings over his imposition of martial law in December. Voter turnout reached 79.4 percent, the highest in 28 years, driven by widespread anger towards Yoon and his party.

In his campaign, Lee Jae-myung promised to end the threat of insurrection represented by Yoon and his supporters in the military, as well as improve the economy.

He declared in his inaugural address on Wednesday, “It is time to restore security and peace, which have been reduced to tools of political strife; to rebuild livelihoods and the economy damaged by indifference, incompetence, and irresponsibility; and to revive democracy undermined by armored vehicles and automatic rifles.”

The last remark was in reference to soldiers who stormed the National Assembly in an attempt to arrest lawmakers in December during Yoon’s failed coup attempt.

Lee, however, will impose the demands of the ruling class no less ruthlessly than the PPP. The new president has no progressive solutions to any of the crises that grip South Korea, which include a stagnating economy worsened by Trump’s trade war and Washington’s accelerating militarization of the Indo-Pacific region.

In line with these US war plans aimed at China, Lee takes over South Korea’s military preparations from where Yoon left off. While the PPP openly embraces militarism, the Democrats attempt to posture as opponents of war. This is done along narrow, nationalist lines, focusing on encouraging “dialogue” with North Korea while consciously ignoring Washington’s plans to goad Beijing into a conflict.

As throughout his campaign, Lee made clear to Washington and Tokyo on Wednesday that whatever his rhetoric about dialogue and peace, his administration will continue the trilateral military alliance with the US and Japan. Yoon sealed the agreement in August 2023 with former Japanese leader Fumio Kishida at the behest of US President Joe Biden.

Lee stated, “We will strengthen South Korea-US-Japan cooperation based on a solid South Korea-US alliance and approach relations with neighboring countries from the perspective of practicality and national interest.”

In real terms, the strengthening of these alliances means South Korea’s own rapid military escalation. This could include ramping up defense spending to 5 percent of GDP—a demand US Defense Secretary Pete Hegseth issued during a warmongering speech at the Shangri-La Dialogue in Singapore on May 31. For Seoul, which already spends about 2.8 percent on its armed forces, this would mean nearly doubling its military budget.

The government will extract this money from the working class at a time when the economy is already stagnating and workers face declining real wages and rising costs. The Bank of Korea (BOK) currently predicts the economy will expand by only 0.8 percent this year, in part due to uncertainty and instability produced by US tariffs, which the Trump regime is wielding like a cudgel to impose its demands on allies.

The Organization for Economic Cooperation and Development has noted that the tariff rate on South Korean exports to the US has already risen from 1 percent to 16 percent, even without the 25 percent “reciprocal” tariff that has been temporarily paused.

Lee’s economic agenda includes plans for heavy investment in artificial intelligence (AI), which under capitalism will result in wage cuts and mass layoffs. A joint report published in February by the International Monetary Fund (IMF) and the BOK found that 27 percent of workers in the country were at risk of losing their jobs or having their wages slashed as a result of AI.

In removing Yoon from office rather than backing his coup attempt, the ruling class decided that it was not yet ready to dispense with the trappings of bourgeois democracy, above all out of fear of the mass popular opposition it would spark. At the height of the protests against Yoon in December, two million demonstrators gathered outside parliament to demand his removal from office.

However, the combination of war and austerity will lead to further opposition from the working class. That is why the ruling class has turned to the so-called “liberal” Democrats to impose its agenda, just as it has done in the past. The DP, which postures as a friend of workers, will work hand-in-hand with the trade unions, particularly the so-called “militant” Korean Confederation of Trade Unions (KCTU), to suppress rising working-class resistance.

The KCTU hailed Lee’s election saying, “Now is the time to realize the demands of worker citizens.” It is promoting illusions that Lee will carry out pro-worker reforms, stating that his election was “the result of citizens’ dedication and struggle,” and falsely claiming that Lee’s win was a victory for democracy.

The KCTU consciously ignores the broader international issues, including the danger of a US-led war against China, in order to obfuscate the real cause of the crisis workers face—the capitalist system itself. Workers are led to believe that simply removing Yoon will be enough to improve their conditions.

The unions, as well as social democrats, pseudo-left groups and various Stalinists that masquerade as left-wing, are part of the falsely named “progressive bloc” in South Korean politics. These groups have a long history of backing the Democrats and providing them with a “left” veneer as they attack the working class.

In the 1990s, the Democrats were first elevated to power, after the end of the country’s military dictatorship, to block workers’ demands and impose restructuring to save big business and the massive family-owned chaebol conglomerates that dominate South Korea’s economy to this day. Under Kim Dae-jung and Noh Moo-hyun, the Democrats enforced widespread layoffs and the mass casualization of the workforce, and relied on the KCTU to strangle strikes and protests.

In 2017, the Democrat Moon Jae-in came to power with the backing of the KCTU, which claimed that Moon would carry out genuine democratic reforms and even a “revolution.” The unions and their progressive allies shut down the mass protests against the previous corrupt right-wing presidency of Park Geun-hye, who was also removed in an impeachment trial. Moon then oversaw the growth of inequality and the expansion of military cooperation with the US.

The KCTU played the same role after Yoon’s coup attempt, calling off strikes and protests in December, claiming that the Democrats would defend democracy. In doing so, the DP and the KCTU provided Yoon Suk-yeol and the PPP with breathing room to recover, rally their right-wing supporters and promote the development of fascistic elements in the country.

Having long since been integrated into the political establishment as an ally of the Democrats and enjoying the privileges that come with it, the KCTU is far more terrified of the development of a working-class movement that goes beyond the confines of capitalism and the parliamentary system than of military dictatorship.

Trump implements new travel ban, restricting travel from 19 countries

David Rye

President Donald Trump speaks to reporters in the Oval Office of the White House, Friday, May 23, 2025, in Washington. [AP Photo/Evan Vucci]

On Wednesday, President Donald Trump issued a presidential proclamation re-instituting the travel ban from his first presidential administration, expanded to include more countries. Trump said the attack last weekend at a march supporting Israeli hostages in Boulder, Colorado, “underscored the extreme dangers posed to our country by the entry of foreign nationals who are not properly vetted, as well as those who come here as temporary visitors and overstay their visas,” concluding “We don’t want them.” 

The proclamation fully restricts and limits the entry of nationals from 12 countries:  Afghanistan, Burma, Chad, Republic of the Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan, and Yemen, and partially restricts and limits the entry of nationals from an additional seven countries: Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan, and Venezuela. Under the restrictions, residents of the countries listed under the partial ban will be unable to apply for six of the major visa categories, including business, tourism and visas for students.

The travel ban would impact over 400 million people, including the hundreds of thousands of refugees who will now be denied asylum. American imperialism bears responsibility for the devastation of the countries affected by the travel ban.

At the start of his meeting Thursday with German Chancellor Friedrich Merz in the Oval Office, Trump was asked why the list of banned countries does not include Egypt. Egypt is the country of origin of the suspect in the attack in Boulder Colorado, which Trump cited in justifying this travel ban. Trump replied that Egypt “has things under control,” adding that the ban applies only to countries that “don’t have things under control.” By “have things under control” Trump means that Egypt’s authoritarian government maintains political surveillance of its population and is subservient to the interests of American imperialism.

The statement from Trump that his administration is excluding immigration from countries that “don’t have things under control” echoes the statement made before the travel ban placed during his first administration: “Why do we want all these people from Africa here? Why do we want all these people from shithole countries?”

A significant difference between Trump’s first administration and the current one, is that Trump’s openly racist statements produced declarations of shock in the media and denunciations from Democratic party politicians. This most recent announcement of a travel ban produced a fraction of the posturing from the media and political establishment. At the time, the problem for the ruling class and Democratic party was that Trump was saying openly that which the members of the oligarchy the state apparatus think and say in private.

In the first Trump presidency, the Supreme Court ruled to uphold the ban and upholding the president’s power to seal the country’s borders. Trump, articulating the policies of American imperialism in blunt language, dispensed with the longstanding art of American imperialist politics: hiding the criminal activities of the US imperialism with the verbiage of humanitarianism and democratic rights.

Legal scholars have warned that this current iteration of the Trump travel ban is likely to be upheld if challenged in the far-right dominated Supreme Court, with University of Michigan Law School professor Barbara McQuade saying in a BBC Newshour interview, “This time I think there has been more thought given into this... this time we see a mix of countries, not just Muslim-majority countries... It seems to me very likely that it will ultimately be upheld by the Supreme Court.” 

The Supreme Court ruled in the five-to-four decision on the 2017 travel ban, that the president and the military have the power to take drastic measures in a “national emergency” or “during a time of crisis,” including “if the United States were on the brink of war.” In the current administration, the “state of exception,” the pseudo-legal framework under which the crimes of the Nazis were carried out, is the operating principle.

The American “state of exception” found early expression in this Supreme Court ruling, and major rulings on the basis of “national security” arguments following the launching of the War on Terror in 2001.

Trial of ex-president Bolsonaro for fascist coup bid advances in Brazil

Tomas Castanheira

Brazil's ex-president Jair Bolsonaro speaking to the press after being indicted for January 8, 2023 coup attempt [Photo: Lula Marques/Agência Brasil]

The last few weeks have been marked by important developments in the case against former President Jair Bolsonaro and those accused of leading the coup attempt that culminated in the invasion of government buildings in Brasília on January 8, 2023.

The Supreme Federal Court (STF) concluded on Tuesday the questioning of witness for the prosecution and defense, including former ministers as well as military, police and intelligence officials. Next week, it will begin questioning the defendants in the “core group” of the case, which includes the former president and seven allies, almost all high-ranking military officers.

The recent testimony of former Army commander Gen. Marco Antônio Freire Gomes and Air Force commander Lt. Brig. Carlos de Almeida Baptista Júnior had deep repercussions for the crisis of the entire Brazilian political system.

Before the court, General Freire Gomes attempted to downplay the significance of the preparatory meetings for a coup d’état in which he participated alongside other military commanders. The meetings were called by then-Defense Minister Gen. Paulo Sérgio Nogueira de Oliveira after Bolsonaro’s electoral defeat in 2022. The focus of the discussion was the document that became known as the “coup draft,” a decree to prevent the president-elect from taking office and establish a dictatorship.

Justifying the presentation of such a document by General Oliveira – his immediate predecessor in command of the Army – General Freire Gomes claimed: “Perhaps he presented it to us out of consideration... He was letting us know that he was going to begin these studies.” He added that all of the “considerations” raised were “based on legal aspects, on the Constitution, which is why it did not catch our attention.”

General Freire Gomes dodged allegations that he had threatened to arrest Bolsonaro if the former president continued his coup attempt: “I warned him that if he strayed from legal grounds, not only would he not have our support, but he could also face legal consequences. He agreed, and that was the end of the matter.”

In addition to shielding Bolsonaro, the former Army commander exonerated former Navy chief Adm. Almir Garnier, accused of having resolutely supported the coup, placing his troops on standby. “He merely demonstrated, let’s say, respect for the commander-in-chief of the Armed Forces,” said Gomes.

The former Army commander’s statements provoked a strong reaction from Minister Alexandre de Moraes. “Commander, either you misrepresented the truth to the police or you are misrepresenting the truth here,” said the judge, referring to Gomes’ previous testimony to the Federal Police. He refused to change his latest version.

The former Air Force commander, who testified before the Supreme Court subsequently, stated assertively that “the three heads of the Armed Forces and then-President Jair Bolsonaro met and discussed coup scenarios, not just possibilities for using the Armed Forces to ensure social peace until the transition.”

Brigadier Baptista Júnior also stated that the meetings between the former president and the military commanders discussed the arrest of Moraes, then president of the Superior Electoral Court (TSE), and that “the head of the Navy placed troops at the disposal of the plot.” Contrary to the testimony of General Freire Gomes, he attested that his colleague, “very calmly,” had threatened to arrest Bolsonaro. 

Regardless of the former Air Force commander’s correction attempts, General Freire Gomes’ testimony threw a bucket of cold water on the establishment’s official narrative regarding the coup attempt, which claims that the military “saved democracy” in Brazil.

This narrative is promoted in the Federal Police report and the complaint filed by the Attorney General’s Office (PGR), which forms the basis for the Supreme Court’s trial, as well as in the media and the government statements. Led by the alleged heroic action of General Freire Gomes, the Armed Forces supposedly dared to say “no” to the coup.

What the evidence overwhelmingly demonstrates, and what was made clear by Freire Gomes’ testimony, is that the Armed Forces went along with the coup conspiracy and their support remained an open question.

The fraudulent narrative about the military as “saviors of democracy” is the highest expression of the hopes of Brazil’s ruling class to solve the greatest crisis in its history through bureaucratic maneuvers and by purely judicial means. These bankrupt pretensions are exploding in the face of the contradictions that led to the coup attempt in the first place.

There are signs of growing dissatisfaction within the military with the development of the case in the Supreme Court and the general political situation in the country. Describing the reaction of high-ranking Army figures to the former commander’s testimony, Veja magazine quoted an anonymous general saying: “It is not natural to see an Army commander, such a respected figure, being reprimanded by a Supreme Court minister.”

At the same time that the STF was concluding the hearing phase of the case, Brazil’s Federal Police (PF) launched an operation that revealed the existence of a paramilitary organization specializing in contract killings which called itself the “Commando to Hunt Communists, Corrupt Officials, and Criminals,” or Comando C4.

The group was made up of active and reserve military personnel and operated under the legal guise of a “private security company.” According to the PF, the group had a fixed price list for the execution of authorities, including congressmen, senators, and Supreme Court ministers. Former Senate President Rodrigo Pacheco was one of the figures monitored by the organization.

One of the leaders of Comando C4 arrested by the PF, retired Col. Etevaldo Caçadini de Vargas, was also a head of the YouTube channel “Frente Ampla Patriótica” (Broad Patriotic Front), which promoted the January 8 attempt and attacked military leaders who backed down from the coup. The colonel had already been prosecuted in military court in 2024 on the grounds that his videos “spread coup ideas that offended and defamed the Armed Forces.”

Comando C4 is a direct reference to the Communist Hunting Command (CCC), a fascist armed organization formed shortly before Brazil’s 1964 military coup. Operating along the lines of a classic fascist shock squad, the CCC carried out terrorist actions against left-wing activists and political events, especially in the early years of the military regime. With the consolidation of the dictatorship, its members—who had informal ties to the military from the beginning—were incorporated into the state apparatus of repression and torture.

The emergence of a fascist paramilitary organization such as Comando C4, directly linked to the forces that served as Bolsonaro’s constituency and remain alive in the state apparatus, exposes the grave dangers contained in the current political situation.

The intensification of the international crisis, marked by the specter of world war, is a determining factor in the explosive unfolding of the Brazilian political situation, particularly under the impact of the violent eruption of US imperialism.

In recent weeks, the US government has significantly escalated its offensive against Brazilian state institutions.

At the end of May, the Brazilian government received an official letter from the US State Department challenging the STF’s orders directed against US-based social media networks such as Rumble. Following this, US Secretary of State Marco Rubio publicly stated that there is a “high possibility” that the Trump administration will impose sanctions against Moraes, the judge leading the trial against Bolsonaro.

The US government’s actions have been directly coordinated with the Brazilian former president’s son, Eduardo Bolsonaro, who resigned from his position as a federal deputy in Brazil to operate directly from the United States.

President Luiz Inácio Lula da Silva described Washington’s actions as “unacceptable” interference in “the decision of another country’s Supreme Court” during a press conference on Tuesday.

At the same time, the STF reacted by opening an investigation against Eduardo Bolsonaro for obstruction and coercion of the proceedings against the former president and for “attempted violent abolition of the democratic rule of law.” The investigation stemmed from an accusation by PT Deputy Lindbergh Farias, who, in addition to these crimes, characterized the activities of the former president’s son as “an attack on national sovereignty” and “high treason against the homeland.”

The actions promoted by the PT and the institutions of the Brazilian bourgeoisie are fundamentally incapable of combating the rise of fascism and imperialist aggression. On the contrary, their appeals to reactionary nationalist ideals and their attempt to resolve all political conflicts in the legal sphere are only deepening the rightward turn of the entire bourgeois system.