Reuters reports that OECD said that the global economy could shed more than 1% of output if international talks to rewrite cross-border tax rules break down and trigger a trade war.

Nearly 140 countries agreed on Friday to extend talks after the pandemic outbreak and U.S. hesitation before the presidential election squashed hopes of reaching a deal this year.

In the absence of a new international rulebook, a growing number of governments are planning their own digital services taxes, which has prompted threats of trade retaliation from the Trump administration.

“In the ‘worst-case’ scenario, these disputes could reduce global GDP by more than 1%,” the OECD, which has been steering the global tax talks, estimated in an impact assessment.

Inversely, new rules for digital taxation and a proposed global minimum tax would increase global corporate income tax worldwide 1.9% to 3.2%, or about $50 billion to $80 billion per year.