A global trade war would be “devastating” for economic growth as even modest hikes in tariffs would cause as much damage to trade as the financial crisis.

The stark warning from the World Bank is based on governments raising taxes on imports to the maximum level currently allowed under current trade rules – not even the introduction of new barriers.

“A worldwide escalation of tariffs up to the limits permitted under existing international trade rules could lead to cumulative trade losses equivalent to those experienced during the global financial crisis in 2008-09, with particularly severe consequences for emerging markets and developing economies,” said the World Bank in its Global Economic Prospects report.

“Protectionist threats cast a dark cloud over future growth. If these threats lead to trade wars, the consequences could be devastating. Even if they do not, uncertainty about economic policy dampens investor sentiment.”

Hiking these tariffs by 2020 would knock 6.2pc off advanced economies’ trade and 14pc from emerging markets’ and developing economies’ trade, the World Bank estimates.