The escalating trade war between the U.S. and China could cost the global economy $600 billion U.S. in lost gross domestic product (GDP), according to new data from Bloomberg Economics.
The latest numbers show that the U.S.-China trade war is ratcheting up the risks to an already stumbling global economy, denting expectations of a stronger second half to 2019. If U.S. tariff measures announced earlier this month and the Chinese retaliation stay in place for an extended period of two years or more, global GDP could be 0.3% lower by mid-2021, according to Bloomberg Economics.
Should a full-scale trade war breakout, global GDP would be lower by 0.6%, which is equivalent to $600 billion U.S. in lost GDP, data from Bloomberg shows. The Paris-based Organization for Economic Co-operation and Development (OECD) agrees with the Bloomberg forecast, saying that an intensification of the dispute between Washington and Beijing would likely knock as much as 0.7% off the level of global GDP by 2021-22.
The OECD has issued a downbeat assessment of the global economy as the standoff between the world’s two biggest economies continues to simmer. In its report, the OECD said the world’s economic momentum had weakened markedly and that growth was set to stay at a sub-par rate as the tensions over trade persist. It said both the U.S. and China stood to lose from the imposition of higher tariffs.
