The World Trade Organization forecasts the contraction of the trade turnover between the U.S. and China by 80% due to mutual duties against each other.
"The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade. Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80%," WTO Director-General Ngozi Okonjo-Iweala said.
According to the WTO Director-General, the negative macroeconomic effects will not be confined to the U.S. and China but will extend to other economies, especially the least developed nations. Of particular concern is the potential fragmentation of global trade along geopolitical lines, she added.
"The division of the global economy into two blocs could lead to a long-term reduction in global real GDP by nearly 7%," Ngozi Okonjo-Iweala said.
