International Monetary Fund on Thursday warned the international community that worsening trade tensions and exchange of tariffs between US and China could cause "significant economic cost" to the global economy.
The global lender is still assessing the impact of the duties imposed so far but the economic costs "will quickly add up," IMF spokesman Gerry Rice told reporters in Washington.
The United States is due to impose punitive tariffs on USD 200 billion in Chinese goods on Monday, bringing the total to USD 250 billion, on top of separate duties on steel and aluminum from around the globe. China has retaliated on USD 110 billion in US goods, the majority of all its imports from the United States.
Rice said that "depending on specifics and how they play out, the imposition of tariffs could come at a significant economic cost".
The fund is due to release its latest World Economic Outlook on October 9, which will provide revised growth estimates that will incorporate the impact of the trade conflict so far.
Rice noted that the impact on China would depend on how Beijing adjusted domestic policies "to dampen the negative growth effects" and compensate for the hit to its exports.
But the tariffs are expected to dent US growth as well, he said. The IMF in July forecast US growth of 2.9 per cent this year and 2.7 per cent in 2019, while China is seen as moderating to 6.6 per cent and 6.4 per cent this year and next.
(With inputs from agencies)
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