India, April 10 -- The World Trade Organization chief has said the ongoing US-China tariff war may lead to merchandise trade between the two economies decreasing by 80 percent.

"The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade. Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80 percent," Ngozi Okonjo-Iweala, Director-General, WTO, said in a statement.

She alerted that the decrease in trade between the two largest economies in the world could severely damage the global economic outlook.

"This tit-for-tat approach between the world's two largest economies - whose bilateral trade accounts f...