Investing.com - Economists say the Trump administration's initial $50 billion round of tariffs against China was structured to have minimal impact at home.
But if the U.S. imposes additional tariffs and China retaliates, then some $450 billion in goods will be affected.
And that, UBS says, turns a "trade skirmish into a trade war."
UBS says that would disrupt the global supply chain, and weigh "substantially on GDP growth and boost U.S. consumer inflation."
Fitch Ratings says an escalation could put $2 trillion in global trade in jeopardy.
That scenario includes a U.S. withdrawal from Nafta.
Fitch says that could mean a "shock" of 35%-40% on import prices and a reduction of 0.5% to U.S. GDP.
Economists say such a worst-case scenario is unlikely, but serves as a warning that trade disputes can snowball quickly.