US-China trade tensions fuels downturn risks, spillover for emerging markets: IMF

Trade tensions between the United States and China - the world's two largest economies - are a significant source of risk for the global economy, with "real spillover effects" for emerging markets, top IMF officials said on Wednesday.

Tobias Adrian, director of the monetary and capital markets department of the International Monetary Fund, told reporters the tit-for-tat trade war between Washington and Beijing had a significant impact on financial markets over the past two years. The fight could set up a "domino effect" for smaller economies, according to a second IMF official.

"We urge policymakers around the world to continue to work together in order to resolve those trade tensions as that is significant source of uncertainty and a significant source of creation of downturn risks," he said. "There are real spillover effects for emerging markets."