Trade experts warn that the biggest challenge brought by trade tensions between China and the United States is the damage to confidence in bilateral trade, which may take years to restore.

Wang Huiyao, director of the Center of China and Globalization think tank, said that the trade tensions will lead to a no-win situation.

"It took years to recover from the financial crisis," he said. "The uncertainty and risk from a trade war will damage the confidence of entrepreneurs from both sides, and that may take years to restore."

Alan Greenspan, former US Federal Reserve Chairman, was quoted by Xinhua as saying that if the US doesn't cut back on tariffs, all the benefits brought by deregulation and corporate tax reduction in the past will be wiped out.

According to a report by Forbes, John Frisbie, president of the US China Business Council, said: "Enough is enough. We need to stop the needless escalation of a tariff war and start working on solutions that will address the real concerns."

While an escalating tariff row may not solve the problem, the CCG in its latest report has suggested a number of ways to ease the trade tension including the US relaxing its export restrictions on China, both sides encouraging trade in services, and promoting the progress of Bilateral Investment Treaty.

"US Cold War-like export controls on high-tech products to China are one reason that led to the trade imbalance," the report pointed out. "In 2001, 16.7 percent of high-tech products China imported were from the US, and the number dropped to 8.2 percent in 2016."

It quoted a report by the Carnegie Endowment for International Peace as saying that if US can lower its export controls on China to the same level as those on Brazil or France, the trade deficit can be reduced by as much as 24 percent and 34 percent respectively.

"The US has long been conservative in high-tech products exports to China," the report said. "A number of US products couldn't launch in China and the US companies have lost the huge profitable potential in the Chinese market."