A report released by the UN Conference on Trade and Development (UNCTAD) on Monday outlined the potential impact of increased tariffs between the U.S. and China.

According to the UN report, continuing or hiking tariffs between the U.S. and China would have an unavoidable impact on the "still fragile" global economy, including disturbances in commodities, financial markets and currencies.

"One major concern is the risk that trade tensions could spiral into currency wars, making dollar-denominated debt more difficult to service," the report said. "Another worry is that more countries may join the fray and that protectionist policies could escalate to a global level."

It was also noted that protectionist policies generally hurt weaker economies the most, while tit-for-tat steps of the trade giants would have a domino effect beyond their domestic markets.

"Tariff increases penalize not only the assembler of a product but also suppliers along the chain," the report said.