In a report released on Tuesday, the International Monetary Fund estimated that despite positive policy tailwinds in the US economy resulting from things like tax reform, growth will be less than previously expected next year, as a result of the trade war.
This is down from its July forecast of 3.9 percent growth for both years.
Lagarde said a trade war or currency war between the USA and China would affect both participants and a lot of innocent bystanders.
"In the United States, momentum is still strong as fiscal stimulus continues to increase, but the forecast for 2019 has been revised down due to recently announced trade measures, including the tariffs imposed on $200 billion of USA imports from China", IMF report said.
While the IMF's outlook for the Chinese economy stayed at 6.6% this year, its forecast for next year of 6.2% represents the slowest growth rate the Asian country has seen since 1990.
In a new assessment issued at its meeting in Bali, Indonesia, the International Monetary Fund predicted that "everyone is going to suffer", as the USA and China - the world's two biggest economies - spar over tariffs and other trade issues.
"Trade is very critical because that is what has lifted people out of extreme poverty", Kim said.
The ongoing trade war between the USA and China could start having material effects on the economies of both countries within the coming years, according to new projections from the International Monetary Fund (IMF).
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The downgrade reflects a confluence of factors, including the introduction of import tariffs between the United States and China, weaker performances by eurozone countries, Britain and Japan, and rising interest rates that are pressuring some emerging markets with capital outflows, notably Argentina, Brazil, Turkey, South Africa, Indonesia, and Mexico.
"We know that risky behaviour and unsustainable debt is a recipe for financial crises".
The IMF and World Bank meetings, attended by more than 19,000 delegates, showed no sign of disruption from an offshore natural disaster early Thursday morning between Bali and Java island that killed three people.
Earlier on Wednesday, Asad Umar held a number of meetings on the sidelines of the World Bank/IMF Group Annual meetings in Bali.
The IMF said the RRR cut, together with other easing and stimulus policies, "may help support economic growth in the near term in the face of rising external pressures.(but) may entail greater risks to financial stability over the medium term should they set back progress toward reducing financial vulnerabilities".
The latest bailout talks come amid increased scrutiny over China's infrastructure loans to Pakistan.
Finance Minister, Zainab Shamsuna Ahmed who is the leader of the Nigerian delegation to the Annual General Meeting is expected to be part of the meeting.
"This is because if services are not sufficiently covered, if digital transformation is not covered in that trade framework, then we are missing the point and we are probably losing out on the productivity gains that we could have", she said.