The American economy is holding up better than expected amid President Trump’s trade war, according to the Organization for Economic Cooperation and Development.

In its quarterly report, the OECD lifted its growth forecast for the U.S. to 1.8% for the year, but also warned that next year could be a different story. 

With this small upward revision, the OECD is still forecasting a sharp slowdown in U.S. growth compared to last year. But it’s painting a picture of a sturdier economy than expected. 

“(Particularly) given everything that’s happened and everything that’s changing and everything that’s been introduced,” said Monica de Bolle, a senior fellow with the Peterson Institute for International Economics.

In other words, tariff and trade war uncertainty, like how high the President will raise tariff rates and how long they’ll stick around.

“That uncertainty on its own is enough to bounce the economy off the rails. Though not immediately,” de Bolle said.

In the short term, that uncertainty might actually be buffering the U.S. economy, said Dietrich Vollrath, an economist at the University of Houston.

While corporate America waits for clarity, it’s mostly absorbing the cost of tariffs rather than passing them along. 

“That’s where the resilience may be fragile,” Vollrath said.

The deferral on price hikes can’t last, he said. Plus, while companies are in this holding pattern, “it also means you’re probably not building the new plant. Or you’re not expanding your product lines because you’re not sure whether that will be facing tariffs or not,” he said.

The OECD predicts the U.S. economy will lose steam a lot faster in 2026. But Daron Acemoglu, an economist at MIT, said some tariff effects might take even longer to play out.

“Effects on investment, which companies survive, which companies can expand, who is willing to take risks, what type of talent gets attracted to the right sectors, those are all slow moving things,” he said.

Acemoglu said the U.S. will feel the true and full impacts in longer-term economic growth.