The American -Chinese trade war will be caused by the division of the global economy

The Director General of the World Trade Organization, Naguzi Okunjo Iyalia, warned on Wednesday that the trade war between the United States and China can reduce up to 80% the trade of goods between the two largest economies in the world, and erase about 7% of the long -term global GDP.

On Wednesday, US President Donald Trump announced the lifting of customs duties on Chinese goods to 125%, in response to Beijing, with the trade war turning into a duel between the two largest economic powers in the world.

Global economy division

“Our initial forecasts indicate that the exchange of goods between these two economies (the United States and China) can decline to 80% due to commercial tensions,” Eolala said in a statement.
She added that “a division of the global economy into two blocs may lead to a reduction in the Global Global GDP of approximately 7% in the long run.”

She said that the United States and China together represent 3% of global trade, and warned that the conflict may have severe damage to global economic expectations.

Possible fragmentation of global trade

Although he imposed more customs duties on China, Trump suspended additional for 90 days after dozens of countries have shown openness to negotiations.

Oldo Iyalla warned of the dangers of the division of the global economy into two blocs, one centered around the United States and the other China.

She said, “It is worrying, especially the possible retail global trade on geopolitical foundations.”