The two economic powerhouses have been locked in a bitter tit-for-tat trade dispute for months, as economists suggest the latest round of hikes will leave families in a worse financial situation. US President Donald Trump has recently ramped up the pressure by raising tariffs on a list of $200billion worth of Chinese imports from 10 percent to 25 percent. The US leader has also threatened to slap 25 percent tariffs on an additional $300billion worth of Chinese goods should the nations fail to reach an end-game in their trade spat. China has retaliated to US aggression by raising duties on a revised list of $60billion worth of US products to as high as 25 percent.
The New York Federal Reserve said families will be hit by $831 (£656) a year in extra costs as it suggested companies in America will start to source goods domestically, and warned these will be more expensive than Chinese alternatives.
They said: “In sum, according to our estimates, these higher tariffs are likely to create large economic distortions and reduce US tariff revenues.”
In latest developments, President Trump also said this week that US complaints against Huawei might be resolved within the framework of a trade deal, while at the same time calling the Chinese telecommunications giant “very dangerous”.
Mr Trump told reporters at the White House on Thursday: “Huawei is something that is very dangerous.
“You look at what they’ve done from a security standpoint, a military standpoint. Very dangerous.”
But he added: “If we made a deal, I could imagine Huawei being possibly included in some form or some part of it.”
This week saw the US temporarily ease its stance on the Chinese phone maker, offering a 90-day relief on restrictions imposed just days earlier.
Huawei had been placed on an export blacklist of companies deemed to be engaging in activities contrary to the national security of the US.
The temporary relief will last three months before being reviewed and will allow Huawei to purchase American-made goods.
This would be in order to maintain existing networks and provide software updates to existing Huawei handsets.
The company is still prohibited from buying US parts and components to manufacture new products without approval.
Chinese Foreign Ministry spokesman Lu Kang said he did not recognise the remarks made by President Trump on Huawei being part of a potential deal.
He said: ”Frankly, I’m actually not sure what the specific meaning of the US leader, the US side, saying this is.”
Mr Lu went on to warn the US against using its national power to suppress and smear other countries’ companies, adding that China was willing to resolve differences between the two countries.
Meanwhile, President Trump has issued a further $16billion (£12.6billion) aid package for US farmers impacted by the trade war.
It comes on top of a $11billion (£8.7billion) granted last year.