The International Monetary Fund said that the US-China trade war was taking a toll and emerging markets were struggling with tighter liquidity and capital outflows.

Iran Press/America: The IMF cut its growth forecasts for the United States and China, citing the recent waves of tariffs the world's top two economies have imposed on each other, Reuters reported.

The more pessimistic forecast comes as the clash between Washington and Beijing threatens to keep escalating and cause damage in other countries.

"When you have the world's two largest economies at odds, that's a situation where everyone suffers," Maurice Obstfeld, the IMF's chief economist, said at a media briefing about the fund's latest World Economic Outlook.

Despite healthy momentum in the United States which received a boost from recent tax cuts IMF economists now expect growth to slow to 2.5% next year from 2.9% this year. They cut the 2019 forecast by 0.2 percentage points because of the trade conflict.

The Trump administration has slapped tariffs this year on roughly half of the products that China sells to the United States annually. President Donald Trump has threatened to expand the tariffs to cover all US imports from China. Beijing has responded with tariffs on American goods worth more than $110 billion.

The tit-for-tat is set to take a bite out of Beijing's economic grow next year, too.

China's growth is now expected to drop to 6.2%, from 6.6% this year, according to the IMF. The new 2019 forecast is 0.2 percentage points lower than the fund's previous forecast, reflecting the waves of new tariffs that have taken effect since then.

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The U.S. State Department  recently announced that it would impose sanctions on the Equipment Development Department of the Central Military Commission of China and the department's director, alleging that China had violated the "Countering America's Adversaries Through Sanctions Act."

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