"The currently implemented US trade measures will impact only a relatively small portion of Chinese exports to the US, and we expect them to have a direct but contained effect on China's economy. At the same time, while the direct impact from tariffs on targeted sectors on China's exports and GDP growth will be limited, there are likely to be knock-on effects for other sectors that could greatly increase the impact," Moody's Vice President Lillian Li said.
According to the agency, the role of trade in the growth of China's GDP has decreased in recent years, meaning that the country has become less vulnerable to sudden changes in trade.
In March, the United States imposed new tariffs on steel and aluminum imports that targeted China, among other countries. Beijing retaliated in April by introducing duties on certain US imports.
Last week, Washington announced yet another set of tariffs that would cover about $50 billion in Chinese goods, while later US President Donald Trump suggested introducing tariffs that would target $100 billion in Chinese goods. Shortly after the statements, Beijing announced similar duties of US imports of comparable value.