According to the International Monetary Fund, growth in the United States, buoyed by a procyclical fiscal package, continues at a robust pace and is driving U.S. interest rates higher.
The numbers presented in the IMF report were drastically below what the fund had predicted just last April when it said that Argentina's economy would expand by about two percent over the next year.
"Owing to these changes, our global growth projections for both this year and next are downgraded to 3.7 percent, 0.2 percentage point below our last assessments and the same rate achieved in 2017", the report said.
The IMF forecasts US GDP growth this year of 2.9 per cent, slowing to 2.5 per cent in 2019 - which is 0.2 points slower than the July estimate -and to 1.8 per cent in 2020. "In this environment, economic growth will likely slow significantly, and inflation will rise", he said in a statement.
Such trade war will have a deep impact the global economy, according to the IMF's projections.
"In several key economies, moreover, growth is being supported by policies that seem unsustainable over the long term", he said.More news: Missing toll soars to 5,000 in engulfed Indonesia quake neighbourhoods
At the worst, which includes Trump pushing through with tariffs on all Chinese goods and on imports of cars and auto parts that spark a round of reprisals, as well as denting confidence and provoking a negative market reaction, the impact would be less than one percentage point on global growth.
The Federal Reserve, the US central bank, has raised short-term USA rates three times this year as the American economy gains strength more than nine years after the end of the Great Recession.
Asked about the US Treasury official's comments, Chinese Foreign Ministry spokesman Lu Kang said: "We have no intention of promoting exports through the competitive devaluation of our currency, and will not use the renminbi (yuan) exchange rate as a tool to respond to disputes in trade or other areas".
Emerging Asia continued to register strong growth, supported by a domestic demand-led pickup in the Indian economy from a four-year-low pace of expansion in 2017, even as activity in China moderated in the second quarter in response to regulatory tightening of the property sector and nonbank financial intermediation, it added.
"But there is no denying that the susceptibility to large global shocks has risen". "Any sharp reversal for emerging markets would pose a significant threat to advanced economies".
The country is going through a tough time, which has been left behind by the previous government, he said, adding: "We have to find a way to get out of this hard situation".