In One Chart: The ‘significant damage’ a U.S.-China trade war could do to the global economy — in one chart

Stock-market investors continue to take rising trade tensions in their stride, seemingly confident policy makers in the U.S. and other world capitals will patch things up without inflicting any deep wounds on the global economy. But what if they don’t?

Economists continue to pencil in the potential damage, with a particular focus on Washington and Beijing, where tensions are the furthest along.

“The world’s two biggest economies are squaring up to each other over trade. Lack of communication, strong ideological beliefs and basically non-negotiable strategic ambitions have brought us to the brink of a trade war that — if it materializes — will significantly exacerbate a global economic slowdown,” warned Gregory Daco and Louis Kuijs, economists at Oxford Economics, in a Monday note.

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