Investing.com - The Bank for International Settlements has warned that escalating trade tensions between the United States and China could turn into a dangerous downward spiral.
In its Annual Economic Report, the BIS said that a year of "vintage" economic growth could be undone by rising protectionism.
The report comes as U.S. President Donald Trump stepped up trade rhetoric against some key U.S. trading partners, adding to fears of a full-blown trade war.
What began with tariffs imposed on U.S. imports of steel and aluminium has turned into a wider dispute with trading partners, including China and the EU, as they respond with counter-measures.
Most analysts agree that while limited tit-for-tat tariffs would be manageable, an all-out trade war could derail global growth.
The BIS also urged the world’s top central banks to keep lifting interest rates and credited "a decade of extraordinary monetary policy," for leading the world out of the 2008 financial crisis.