Recent protectionist measures taken by the United States increase world economic uncertainty and may undermine global economic growth, according to a report released Thursday.
The report, called the Joint Economic Forecast Spring 2018, showcases the joint views of experts in leading German economic think-tanks and was presented to the German federal government for reference.
"The U.S. announcement of its plans to increase tariffs on steel and aluminum at the beginning of the year represents another step towards greater protectionism," said the report.
Experts expressed the concern that U.S. protectionist measures may result in other countries' counter actions which will increase economic uncertainty. A potential escalation of the trade conflict will "significantly damage world economic growth in the mid-term."
The report shows that "sentiment among companies has weakened markedly recently," which is partly attributed to the "growing uncertainty over economic policy in the U.S."
The German economy will inevitably be affected. "The current changes in both U.S. trade and tax policy have international implications that will also affect Germany," said the forecast.
Facing the potentially increasing uncertainty, the report calls for cooperation and coordination on trade policies among countries. "If the trade conflict were to be rapidly resolved, however, current uncertainties would disappear and the global economic dynamic may be far stronger than assumed in this forecast."