THE escalating trade battle between the United States and the rest of the world is raising the risk of a meaningful slowing in an otherwise vibrant American economy.

While the tariffs already in place and set to be implemented will barely dent U.S. growth, economists say the panoply of additional measures being considered would take a perceptible bite out of gross domestic product if they go ahead.

“It’s going to be more noticeably painful,” said Peter Hooper, chief economist at Deutsche Bank AG in New York.

Hooper, who expects the U.S. economy to expand 3 percent this year, said the steps already taken or in the works would clip just 0.1 percentage point off gross domestic product growth.

Throw in U.S. President Donald Trump’s threat to slap a 10 percent tariff on an additional US$200 billion in Chinese imports and a 20 percent levy on car shipments from the European Union and the impact grows to 0.3 points to 0.4 points, he said. And the fallout could even be greater if heightened tensions begin to infect consumer, business and investor confidence.

“It really dings the economy but certainly doesn’t undermine it,” said Mark Zandi, chief economist at Moody’s Analytics Inc., who agreed with Hooper’s estimate of a roughly 0.3 percentage point impact from the accumulated trade actions.

Even though markets have taken the contretemps largely in stride — perhaps in the belief that Trump’s latest threats are more of a negotiating tactic than a concrete plan — U.S. equity futures followed Asian shares lower early yesterday after an escalation of tensions over the weekend.

Central bankers though are taking notice. Federal Reserve Chairman Jerome Powell said June 20 that officials are beginning to hear that companies are postponing investment and hiring due to uncertainty about what comes next.

“Changes in trade policy could cause us to have to question the outlook,” he said during a panel discussion at a European Central Bank conference in Portugal.

The increasing tariff strife poses particular problems for the U.S. central bank because it’s likely to both raise inflation and depress growth.

Trump administration officials have played down the economic impact of the trade battle.

“Anyone who thinks the economy is being wrecked doesn’t know what they’re talking about,” U.S. Commerce Secretary Wilbur Ross said in a June 21 Bloomberg Television interview. (SD-Agencies)