The organisation’s report has forecasted a slowdown of growth to 2.9 percent this year and 2.8 percent next year, but the chances of a recession will skyrocket if the US economy takes a negative hit.
Spiralling tariffs imposed by US President Donald Trump and Chinese President Xi Jinping now affect 2.5 percent of global trade.
The percentage of trade affected would be double if further tariffs discussed are implemented.
The Bank’s report commented that the risk of rising protectionism remains high and it could depress economic activity in these two world powers.
World Bank economist Franziska Ohnsorge said the US and China account for around 20 percent of global trade and 40 percent of global GDP.
She said if their economies are hit, “it’s something that’s felt all around the world”.
The World Bank does not expect either to experience a recession, but if they were to it would sharply increase the risk of a global recession.
In any one year the risk of a global recession is 7 percent, but if the US has a downturn the probability rockets up to 50 percent.
China is already experiencing slower growth than in the last decade and by 2021 is expected to have reduced to 6 percent – strong, but considerably down from its average of 10 percent between 1980 and 2010.
Ms Ohnsorge said: “In China it’s policy engineered, a very deliberate slowdown towards more stable long term growth.”
However, slower growth in China could be a problem for developing countries that export to the economic giant.