Frankfurt am Main — World economic output could fall as much as 1% in a year if US President Donald Trump sparks a trade war with America’s partners, a top European Central Bank (ECB) official said Friday. "According to ECB staff simulations, world trade in goods could fall by up to 3% already in the first year after the change in tariffs and world GDP by up to 1.0%," central bank board member Benoît Coeuré said in a speech in Cernobbio, Italy. ECB economists modeled a scenario where the US raised tariffs on all imports by 10 percentage points and its trading partners responded in kind. "Such a scenario would have significant adverse effects on the global economy, including, and in particular, on the economy that raises tariffs in the first place," Coeuré said according to a transcript provided the ECB. US GDP would be 2.5% lower after one year than if no new tariffs were introduced, the ECB found. The US economy contracted by nearly 2.8% in 2009 during the global economic crisis. "...
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