Sept. 27 (UPI) -- The trade dispute between the United States and China could have far-reaching effects worldwide, a new analysis by the World Trade Organization said Thursday.
The WTO said in its report the escalating conflict will slow global trade. In fact, the economic group lowered its forecast for the rest of 2018, saying it now expects trade volume to grow by 3.9 percent -- down from the 4.4 percent growth it previously predicted.
"This downgrade reflects the heightened tensions that we are seeing between major trading partners," said WTO Director Roberto Azevedo said. "More than ever, it is critical for governments to work through their differences and show restraint. The WTO will continue to support those efforts."
The analysis also forecast worldwide gross domestic product growth to fall to 2.9 percent next year.
The U.S.-China trade conflict has steadily worsened in recent months, and Beijing said this week it would cut tariffs on certain imports from countries other than the United States. Those reduced tariffs take effect Nov. 1 and could save Chinese consumers $8.7 billion, Beijing officials said.
With the changes, China's overall tariffs will fall from nearly 10 percent to 7.5 percent -- and smaller cuts were made to Chinese tariffs on paper goods. The reduced taxes are designed to protect Chinese consumers from the impact of U.S. tariffs.
Tariffs by the Trump administration affecting $200 billion worth of Chinese exports took effect Monday. Beijing retaliated with another round of taxes on $60 billion in U.S. goods. The move led U.S. President Donald Trump to threaten tariffs on all products from China.
In his speech to the United Nations General Assembly Tuesday, Trump said bad trade policies with China and other countries has created a $800 billion trade deficit for the United States.
"Those days are over. We will no longer tolerate such abuse," Trump said. "We will not allow our workers to be victimized, our companies to be cheated and our wealth to be plundered and transferred."