"Changes in trade policy could cause us to have to question the outlook", Federal Reserve Chairman Jerome Powell said during a panel discussion at a European Central Bank conference in Sintra, Portugal.
More than $3 billion worth of USA goods - from bourbon and corn to Harley Davidson motorcycles - are now under a 25 percent tariff in the European Union, in retaliation for the Trump administration's tariffs that hit the EU, Mexico and Canada earlier this month.
John Murphy, a senior vice president at the US Chamber of Commerce, estimates that $US75 billion in US products will be subject to new foreign tariffs by the end of the first week of July. But, he said, the move could hurt India's economic growth as the country diversifies its exports, as well as prompt India "to re-look at USA relations as undependable".
Brussels imposed the raft of duties on USA products worth 2.8 billion euros (£2.45 billion) in a tit-for-tat response to Mr Trump's decision to slap stiff tariffs on European steel and aluminium exports. If the trade dispute continues or is not resolved by the WTO, the European Union could target a second batch of American exports worth around €3.7 billion ($4.3 billion).
In trade wars, there tend to many casualties and few winners.
'It's extraordinary for the United States to be imposing tariffs on its closest allies, ' says former senior counsel to Canada on CETA, Christophe Bondy, on Power & Politics.
The Trump administration this week ratcheted up its accusations that China's trade and intellectual property practices are threatening United States economic interests.
On May 31, the White House announced that it would be ending the exemptions at the end of that day.
Trump recently approved heavy tariffs on $50 billion of Chinese imports.
The initial wave of European Union retaliatory tariffs is aimed at American goods worth €2.8 billion ($3.2 billion). Trump said he would then retaliate against any counterpunch from Beijing by targeting an additional $200 billion in Chinese products, and then yet another $200 billion if China refused to back down.
Asian stocks fell, extending the worst week for regional equities since late March, amid concern global trade restrictions will curb growth.