The World Trade Organization has estimated the US-China trade tensions could cut the trade of goods between the two economies by as much as 80 percent.
"This tit-for-tat approach between the world's two largest economies, which together account for roughly 3 percent of global trade, carries wider implications that could severely damage the global economic outlook," it said in a statement on Wednesday.
Dividing the global economy into two blocs in this way could lead to a long-term reduction in global real GDP by nearly 7 percent, the statement added.
"Moreover, trade diversion remains an immediate and pressing threat, one that requires a coordinated global response. We urge all WTO members to address this challenge through cooperation and dialogue," WTO added.
WTO also urged the international community to preserve the openness of the international trading system.
US President Donald Trump offers a timeframe of 90 days to nations who have reached out to negotiate tariffs while further penalising China, hiking levies to 125 percent.
Back and forth
Its preliminary estimate was issued around the time US President Donald Trump further raised tariffs on imports from China but paused some others for 90 days.
He imposed more levies on China, saying: "Based on the lack of respect that China has shown to the World's Markets, I am hereby raising the Tariff charged to China by the United States of America to 125 percent, effective immediately," he said on Truth Social.
China has hiked tariffs on American products to 84 percent, up from the previously announced 34 percent, starting Thursday.
It has accused Washington of undermining the multilateral trading system and urged the WTO secretariat to examine the global impact of such tariffs.
