Trump trade war could shrink world GDP by 1%: ECB

World economic output could fall as much as one per cent in a year if US President Donald Trump sparks a trade war with America's partners, a top European Central Bank (ECB) official said on Friday.

"According to ECB staff simulations, world trade in goods could fall by up to three per cent already in the first year after the change in tariffs and world GDP by up to one per cent," ECB board member Benoit Coeure said in a speech in Cernobbio, Italy.

ECB economists modelled a scenario where the United States raised tariffs on all imports by ten percentage points and its trading partners responded in kind.