Ongoing trade tensions that have hit market sentiments towards the end of the current business cycle could deal a "double whammy" to the global economy, said Singapore's Minister for Trade and Industry Chan Chun Sing.

Chan's comments came amid an escalating trade conflict between the world's two largest economies: The U.S. is reportedly preparing new tariffs against all remaining Chinese imports if upcoming trade talks between Donald Trump and Xi Jinping break down.

"The most important thing is whether this will lead to a global loss of confidence and investment," Chan told CNBC's Sri Jegarajah at the Singapore International Energy Week on Tuesday.

"And if this global loss of confidence and investment coincides with what we call the late cycle issues on the financial markets, then we might have a double whammy," he added. "Late cycle" refers to a stage in an economic recovery when activity stagnates and growth slows down.

Stock markets around the world have tumbled in recent weeks as investors are increasingly rattled by developments including rising interest rates, weakening global economy and waning earnings prospects.

The International Monetary Fund earlier this month cut its global growth forecasts as trade tensions between the U.S. and trading partners have started to hit economic activity worldwide.

Singapore is a tiny Southeast Asian economy that is highly dependent on trade — making it vulnerable in a worsening conflict between the U.S. and China. Its exports of goods and services in 2017 were almost 200 percent of its roughly $300 billion gross domestic product, according to the World Bank.

The country's central bank, the Monetary Authority of Singapore, said current global uncertainties would result in slower growth for the rest of this year and in 2019.

"I think we have to be prepared that the situation might take a while before it improves. As far as Singapore is concerned, we're going to continue to diversify our economy to make sure that we're neither dependent on any specific market nor any specific sector," Chan said.

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