The buildings of the banking district are illuminated by red clouds after sunset in Frankfurt, Germany, Tuesday, Sept. 25, 2018. (AP Photo/Michael Probst)

Report: Global trade war would hurt US the most

September 26, 2018 - 1:01 am

FRANKFURT, Germany (AP) — Economists at the European Central Bank simulated a wide-ranging global trade war and found it would cost the United States significant amounts of growth, while China might not be hit so badly.

The researchers conclude that "an escalation of trade tensions could have significant adverse global effects" on growth. They added that stock and bond markets could be hit indirectly by a general loss of confidence in the economy.

The researchers used computer models to wargame a scenario in which the United States slaps a 10 percent tariff on all imports and all trade partners respond in kind. It's purely hypothetical, but the results were significant: a 2 percent loss in growth in the first year for the United States, and a 3 percent drop in global trade.