China has consistently said that a trade war is damaging to all, with no winners emerging. Several global financial institutions around the world have warned of grave consequences should trade tensions continue to escalate.
The World Trade Organization has adjusted its forecast for 2018’s world trade volume growth to nearly 4 percent, lower than the 4.4 percent previously predicted in April. The outlook for 2019 is even lower at 3.7 percent from its previous forecast of 4 percent. The WTO estimates that trade will continue to expand, but at a more moderate pace than the previous forecast.
Back in July, the International Monetary Fund predicted global GDP growth would be cut by 0.5 percentage point by 2020, should all the threatened tariffs be implemented. Now nearly three months have passed, the "if" is turning into reality.
In June, the World Bank warned a broad-based increase in tariffs worldwide could translate into a decline in global trade amounting to nearly 10 percent in just two years. The impact would be more severe on emerging markets developing economies, particularly on those with large trade or financial market linkages with the US.