(Reuters) - The World Trade Organization on Wednesday estimated the U.S.- China trade tensions could cut the trade of goods between two economies by as much as 80%.

"This tit-for-tat approach between the world's two largest economies, which together account for roughly 3% of global trade, carries wider implications that could severely damage the global economic outlook," it said.

Dividing the global economy into two blocs in this way could lead to a long-term reduction in global real GDP by nearly 7%, the statement added.

Its preliminary estimate was issued around the time U.S. President Donald Trump further raised tariffs on imports from China but paused some others for 90 days.