The trade policies of President Donald Trump could trigger a global economic crisis as severe as the financial collapse of 2008, the World Bank has warned.
According to The Hill, the World Bank said in its Global Economic Prospects report that increases in tariffs would have "severe consequences" for global trade – especially if those tariffs exceed limits determined by the World Trade Organization.The results would be as serious or more severe than the financial crisis that rocked the world in 2008, the report warned.
"A broad-based increase in tariffs worldwide would have major adverse consequences for global trade and activity," the report reads. "An escalation of tariffs up to legally-allowed bound rates could translate into a decline in global trade flows amounting to 9 percent, similar to the drop seen during the global financial crisis in 2008-09."
Trump recently peeled back exemptions previously in place for three key U.S. allies and trade partners – Mexico, Canada and the European Union – subjecting them to tariffs on both steel and aluminum.All three have announced retaliatory measures.
Trump also imposed 25 percent tariffs on imported steel and 10 percent tariffs on imported aluminum in China earlier this year, and announced plans last week to impose 25 percent tariffs on $50 billion worth of Chinese technology by the end of this month.
China has said it too would retaliate if such tariffs are implemented.