China's Government Threatens Retaliation Against US, Trump Calls For 'Personal Meeting' With Xi

The U.S.-China trade war escalated further Thursday after China's government stated it will take all "necessary counter-measures" in reaction to the new round of tariffs announced by U.S. President Donald Trump's administration.

China Ready To 'Escalate'

China's Customs Tariff Commission of the State Council said in an online post the government feels "severely violated" by Trump's tariff escalation as it is not consistent with an agreement reached during the G-20 summit, CNBC wrote. China hopes the U.S. will meet "half-way" to reach a "mutually acceptable solutions through dialogue on the basis of equality and mutual respect."

Trump To Xi: Let's Meet

Trump wrote in a Tweet Wednesday China President Xi Jinping is a "great leader who very much has the respect of his people." He followed up that his Chinese counterpart likely wants to "quickly and humanely" reach a solution to the escalation of tensions and riots in Hong Kong.

Trump concluded with likely what could be seen as a personal message to Jinping: "Personal meeting?"

Analyst: Trump Is 'Dead Wrong'

Trump wrote in a separate Tweet the U.S. is "winning, big" against China and prices to consumers "have not gone up, and in some cases, have come down." According to chief economist at Moody's Analytics Mark Zandi, Trump is simply "dead wrong."

Zandi said during a CNBC "Squawk Box" interview Thursday morning the combined cost to American businesses and consumers in the coming years from all of Trump's existing tariff threats stands at $100 billion, or half a percent of GDP.

"It's starting to show up in places like manufacturing, transportation, distribution," he said. "If it metastasizes, and other businesses and other sectors of the economy start to pull back on hiring and unemployment starts to rise, well that's recession."

The President may come to the same conclusion and conclude a trade war "isn't working" as expected, he said. But then the U.S. will be in a position of weakness as it needs to reach a "face-saving" resolution.

"The question is, will (Chinese) President Xi (Jinping) give him the way out? " Zandi said.

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