The US will also see its growth "decline" once its fiscal stimulus, delivered through wide-ranging tax cuts "goes into reverse" according to Mr Obstfeld.
The trade war has already forced China to moderate its own tough campaign to crack down on excessive credit, initiated following growing warnings that it was sitting on a debt time bomb.
The IMF's latest World Economic Outlook predicted China's economy would grow 6.2 per cent next year, down from an early forecast of 6.4 per cent, citing the "negative effect of recent tariff actions".
The IMF said that global growth rates have hit a plateau at 3.7%, and would continue to remain at this level in 2019-'20.
The World Bank last week cut SA's GDP growth estimate for 2018 to 1% this year from 1.4%, while the SA Reserve Bank slashed its forecast to 0.7% from 1.2% in September. The IMF projections don't take into account Trump's threat to expand the tariffs to effectively all of the more than $500 billion in goods the USA bought from China previous year.
The IMF said that monetary policy normalisation and a stronger dollar in the United States has put pressure on the exchange rates in emerging economies like Brazil, India and South Africa, among others.
Further out, China's economic growth is expected to slow gradually to 5.6 per cent as the government shifts to "a more sustainable growth path" and addresses financial risks, the International Monetary Fund said. "We see the future of industry as being bleak as investors are trying hard to sustain growth momentum", Syed Mazhar Ali Nasir, senior vice president of the Pakistan Chambers of Commerce and Industry, told Arab News.
The central bank has raised interest rates to the highest in three years to help shore up confidence in the economy.
Russian Federation was among the few energy-rich emerging market countries whose growth forecasts were bumped up.
After a visit last week, the IMF issued a report saying Pakistan is facing significant economic challenges, with declining growth, high fiscal and current account deficits, and low levels of worldwide reserves.
"Where we are now is we've gotten some bad news". Bond markets were closed, leading USA indexes to a mixed finish after a day of light trading.
In the United States, momentum is still strong as fiscal stimulus continues to increase, but the forecast for 2019 has been revised down due to recently announced trade measures, including the tariffs imposed on $200 billion of USA imports from China. It also assumes that Trump imposes a 25 percent tariff on imported cars and auto parts.
Adjustments would occur as domestic production displaces higher-priced imports, the model shows, but in the long run, the US GDP would still be 1% below a baseline without these tariffs, while China's GDP output would be 0.5% below the baseline.