On Wednesday, the World Trade Organization (WTO) projected that the ongoing trade tensions between the U.S. and China could reduce the flow of goods between the two countries by up to 80%. The WTO warned that the back-and-forth between the world’s two largest economies, which together make up about 3% of global trade, could have broader consequences that may significantly harm the global economic outlook.
The WTO also cautioned that splitting the global economy into two opposing blocs could lead to a long-term decline in global real GDP by nearly 7%.
This preliminary estimate was released around the time U.S. President Donald Trump raised tariffs on Chinese imports, although he suspended some for 90 days.
