Technological fragmentation could lead to losses of about 5 percent of global GDP, IMF research shows.

By Bloomberg

A technological decoupling between the U.S. and China and potentially Europe would cut global gross domestic product by an order of magnitude greater than the recent trade war, a senior International Monetary Fund official warned.

“The world is such an integrated place,” Helge Berger, head of the fund’s China mission, said in an interview with Bloomberg Television Friday. “If you stop exchanging knowledge across countries or borders you will ultimately pay a price, and this could be fairly high.”

IMF research estimates that technological fragmentation could lead to losses of around 5% of GDP for many countries, or about 10-times the estimated costs of trade tariffs imposed by the U.S. and China.

The warning comes after the Biden administration earlier this month added seven…

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