IMF predicts economic slowdown next year thanks to Trump's trade war

President Trump's trade war has worsened the economic forecast for 2019 for the world's two largest economies, the International Monetary Fund (IMF) reported Tuesday.

While both economies are still expected to grow, U.S. growth estimates were lowered from 2.9 percent for 2018 to 2.5 percent for 2019. China's projected growth declines to 6.2 percent after 6.9 percent this year.

"The impacts of trade policy and uncertainty are becoming evident at the macroeconomic level, while anecdotal evidence accumulates on the resulting harm to companies," said the IMF report. "An intensification of trade tensions, and the associated rise in policy uncertainty, could dent business and financial market sentiment, trigger financial market volatility, and slow investment and trade."

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Chief IMF economist Maurice Obstfeld was more direct. "When you have the world's two largest economies at odds," he said, "that's a situation where everyone suffers."