June 6 (UPI) -- The World Bank has warned that trade tensions sparked by the U.S. government could trigger a financial crisis on the scale of the meltdown that occurred in 2008.
The bank's Global Economic Prospects report Tuesday said if tariff increases surpass the maximum level allowed by the World Trade Organization, the consequences could be severe.
"A broad-based increase in tariffs worldwide would have major adverse consequences for global trade and activity," the report said. "An escalation ... 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."
Mexico retaliated by slapping duties on U.S. exports like pork, steel, cheese and whiskey.
Last week, the Trump administration went ahead with tariffs on a range of Chinese products worth about $50 billion due to what it deems discriminatory trade policies.
Canada, the European Union and China have promised to retaliate if the tariffs are implemented.