An economist on Wednesday said that the latest round of US tariffs on Chinese imports could gradually reduce China's gross domestic product by some 0.3 to 0.4 percent over a 12-month period.

The comments came as US President Donald Trump slapped an additional 10 percent tariff on all Chinese goods entering the US. That prompted Beijing to retaliate, including a tariff on US agricultural products, export restrictions on select companies and a lawsuit at the World Trade Organization.

Le Xia, Chief Economist for Asia at BBVA Research, said Beijing's measures were "measured and calibrated".

"I think that the Chinese response is very firm and shows determination to the US," he told RTHK.

"At the same time, if you look at the coverage of all these agricultural products, I think in total it's a kind of maybe around 20 percent of the total US imports, so that means the Chinese response is still measured – it leaves the room for the negotiations."

Xia also said he was not optimistic that both sides could reach a deal in the short term.

"President Trump, he's too busy, he has so many things on his agenda, like the Ukraine crisis, and imposing tariffs on other partners like Canada and Mexico,“ he said.

Meanwhile, Canada's Prime Minister Justin Trudeau on Tuesday angrily denounced Trump's "dumb" tariffs and accused the US president of seeking to collapse Canada's economy in order to annex its northern neighbour.

RTHK's US correspondent Simon Marks said there is currently a "massive" rift between the two countries.

“We heard Trudeau using language about the United States and its government that we have never heard in the past from any previous Canadian leader."

However, Marks said there are signs there could be a possible breakthrough.

"We have heard from the United States commerce secretary Howard Lutnick, who is a very close advisor to president Donald Trump, that there could be a climb-down coming by the US government."

Lutnick said there has been an enormous amount of phone conversations between Canadian and Mexican officials and the United States, according to Marks. (Additional reporting by AFP)