The escalation of trade tariffs between the U.S. and China would have negative consequences for all parties involved, according to the IMF's deputy director.

• Gita Gopinath, deputy managing director of the International Monetary Fund, stated that an intensification of trade and tariffs conflicts between the U.S. and China would result in economic repercussions globally.
• The output is likely to be lower than our global projections, and there will be inflationary pressures, so we should not pursue that direction, she said on CNBC.
• As the tit-for-tat measures continue, China has also imposed higher temporary tariffs on certain imports from the U.S.

Gita Gopinath, deputy managing director of the International Monetary Fund, stated on Wednesday that an escalation of trade and tariffs tensions between the U.S. and China would result in "costly" economic consequences globally.

The global trade landscape is undergoing significant changes due to geopolitical factors, which is why the overall trade-to-GDP ratio is stable but the trading partners are shifting.

Some parts of the trade between the U.S. and China are being re-routed through other countries, she stated.

The trade tensions between the U.S. and China and the European Union and China have escalated this year, with both the U.S. and EU imposing higher tariffs on some Chinese goods due to perceived unfair trade practices from Beijing.

The EU is facing higher temporary tariffs from China as the tit-for-tat measures persist.

According to Gopinath, if tariffs were increased, the IMF's modeling indicates that it would be detrimental to everyone.

She explained that the output will be lower than projected for all countries worldwide, and there will be inflation pressure, so this direction should not be pursued.

Gopinath's remarks were made following Kristalina Georgieva's statement last week that international trade would no longer be the primary driver of economic growth, and that imposing "retaliatory" trade measures could harm both the imposer and the target.

The CEO of the Institute of International Finance, Tim Adams, cautioned on Wednesday that tariff proposals from U.S. presidential candidate Donald Trump could disrupt the disinflation process and result in higher interest rates.

Gopinath of the IMF stated that it is advantageous for both the U.S. and China to maintain "good working relations," which is also crucial for the global community.

She stated that it is in everyone's self-interest to maintain these relationships.

The World Economic Outlook report by the IMF stated that growth could be negatively impacted by rising protectionist policies.

The report stated that a shift away from a rules-based global trading system is causing many countries to take unilateral actions. This could lead to an intensification of protectionist policies, which would exacerbate global trade tensions and disrupt global supply chains, ultimately weighing down medium-term growth prospects.

— CNBC's Jenni Reid contributed to this story