An escalation of trade and tariffs tensions between the U.S. and China would have "costly" economic consequences around the world, Gita Gopinath, deputy managing director of the International Monetary Fund told CNBC on Wednesday.
The U.S. and China are trading with one another less, and some parts of their trade is being re-routed through other countries, she added.
Trade tensions between the U.S. and China and the European Union and China have been mounting this year, with both the U.S. and EU implementing higher tariffs on some Chinese goods over what they claim are unfair trade practices from Beijing.
China has also announced higher temporary tariffs on some imports from the EU as the tit-for-tat measures continue.
If tariffs were escalated, modelling from the IMF suggests it would be "costly for everybody," Gopinath told CNBC's Karen Tso on the sidelines of the agency's annual meeting in Washington.
Persons:
Gita Gopinath, Gopinath, Karen Tso, that's
Organizations:
U.S, International Monetary Fund, CNBC, European Union
Locations:
China, U.S, Beijing, Washington
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