Continued escalation of the trade war between the US and China could cut global growth by 70 per cent and cost jobs, the director-general of the World Trade Organization (WTO) has said.
WTO chief Roberto Azevedo said the “warning lights are flashing” amid the growing trade tensions between the world's two largest economies.
The pair slapped more tariffs on each other's products on Monday and the war of words between the two has continued this week.
Azevedo, speaking at a Berlin industry event, said: “The warning lights are flashing.
“A continued escalaton of tensions would pose an increased threat to stability, to jobs and to the kind of growth that we are seeing today.”
A full-blown trade war, with a breakdown in international cooperation, would reduce global trade growth by around 70 per cent and GDP growth by 1.9 per cent, he claimed.
“There would be no winners from such a scenario and every region would be affected – clearly we cannot let this happen," Azevedo said.
President Donald Trump hit China with tariffs on a further $200bn of US goods on Monday – on top of the duties on $50bn worth of products imposed earlier this year.
Beijing hit back with tariffs of its own on $110bn of US products.
Read more: Theresa May says she trusts President Trump
Chinese vice commerce minister Wang Shouwen said the country was being forced to retaliate and US exporters would “certainly” be hurt by the tariffs.
Shouwen said on Tuesday that it would open up opportunities for other countries to trade with China, adding that Australia was an important source of fuel for China.
Trump has also threatened to impose tariffs on a further $276bn worth of Chinese products.