The global trade war could cost the global economy $ 1.2 trillion

Mubasher: A recent report indicated that the recent escalation of the trade war could cause the already fragile global economy considerable losses.

A Bloomberg Economist report said Monday that global GDP could be lower by about 0.6% by 2021 if a large-scale trade war occurred relative to the absence of a trade war.

A 25% tax on US-Chinese trade and a 10% fall in stock prices would result in a loss of $ 1.2 trillion for the global economy, the agency said.

The economic impact of the trade war on global gross domestic product (Source: Bloomberg Economics)

Trade terms between the United States and China are declining, despite the second trade truce announced two months ago.

Last week, US President Donald Trump threatened to impose charges of up to 25% on a $ 300 billion bill of Chinese goods.

While China has pledged to retaliate against these threats, it should allow the yuan to decline today due to the demand of its subsidiaries to suspend imports of US agricultural products.