The trade war between the US and China could reduce "up to 80 percent" of trade between the two countries, the world's two leading economies, and in the long term wipe out almost seven percent of the world's gross domestic product, the director-general of the World Trade Organization warned on Wednesday evening.
"Our preliminary projections indicate that trade between the two economies (the US and China) could decline by up to 80 percent due to commercial tensions," Ngozi Okonjo-Iweala said in a statement.
She said that dividing the world economy into two blocs could lead to a long-term reduction in real world GDP of almost seven percent.
US President Donald Trump, faced with a global market crash, abruptly decided today to postpone the introduction of additional US tariffs on most trading partners for 90 days, but instead increased tariffs on Chinese imports from 105 to 125 percent - just hours after China retaliated by imposing 85 percent tariffs on the United States.
US Treasury Secretary Scott Besant told reporters that Trump is pausing the introduction of "reciprocal" tariffs on most of the US's largest trading partners, while maintaining 10% tariffs on almost all global imports.
Meanwhile, Trump announced on social media that he was increasing tariffs on China to 125 percent, "effective immediately."
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