The central government is well prepared and has a broad arsenal to respond to any further tariff escalation by US President Donald Trump, according to Executive Council convenor Regina Ip.

She was speaking on RTHK's Backchat programme on Tuesday on Washington's recent tariff barrage launched across the world, including an additional 34 percent tariff on Chinese imports.

In response, Beijing hit back with tariffs of 34 percent on all goods from the United States and added 11 US firms to its unreliable entity list.

Ip, who's also the New People's Party chairwoman, said Trump is effectively ceding the role of champion of free trade and rule-based multilateral system to China.

"In the long term, China will be the winner, in terms of trade, technology and moral high ground," she said.

Ip stressed that if Trump does decide to retaliate further, it will only continue to plummet global markets, and that the tariff war will likely continue unless Trump's tycoon backers reign him in or Republicans get burned in the midterm elections next year.

As for the likelihood of a global recession, Ip said it's likely.

"The SAR government should work out a panoply of policy options to buoy the local economy pending a global recession," she said.

When asked about the SAR not setting any countermeasures to the US tariffs, Ip said Hong Kong will continue to be a free port, noting that the city is bound by the Basic Law, as well as its tariff commitments to the World Trade Organization.

Weighing in on the same issue, Andrew Leung, China strategist and former senior Hong Kong government official, said the US was upending the very trade institutes it helped create after World War II.

He said the current Trump policies are a continuation of what he had started during his previous term in office, and therefore "China had been preparing for this for a long, long time."

"Immediately, after Trump 1.0 President Xi was quite prescient -- shortly after Trump won the White House for the first time, he already ordered China to go full steam ahead towards self-sufficiency and self-reliance -- particularly on high technology," he said.

Leung also said Chinese products will remain competitive globally, like BYD electric cars, because of the superior technology and price, despite the tariff headwinds.