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Using conservative estimates to assess the risks to the world economy from rising economic nationalism of the kind promoted by Donald Trump, the Washington-based organisation warned of “severe consequences” for world trade and economic growth, with the harshest impact reserved for developing nations.
Under the scenario outlined in its latest global economic prospects report published on Tuesday, the bank found a broad-based increase in the use of import tariffs worldwide — to the maximum levels permitted by the World Trade Organisation — would trigger a decline in global trade amounting to 9 percent.
While that would be similar to the drop experienced during the financial crisis of 2008-09, it warned the impact could be even greater if countries went further than the WTO rules.
Franziska Ohnsorge, the lead author of the bank’s report, said: “The threat of trade protectionism is a real risk. Anything that puts sand in the wheels of global trade is a risk to global growth.”
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