By one measure, business confidence has fallen in six of the past seven months in Germany, where exports are nearly half of annual economic output.
The response comes after Japanese newspaper Asahi Shimbun, citing anonymous sources, reported that China's tariffs on US$34bn worth of USA goods would come into force on Friday morning.
Initially Chinese President Xi Jinping appeared to relent with the suggestion that they may lower tariffs on imports of USA auto imports to the country.
China has said it will not "fire the first shot" in a trade war with the United States, but its customs agency made clear on Thursday that Chinese tariffs on American goods would take effect immediately after USA duties on Chinese goods are put in place.
The Trump administration engaged in a similar tit for tat last month with the European Union, Mexico and Canada.
"If this ends at $34 billion, it will have a marginal effect on both economies, but if it escalates to $500 billion like Trump said then it's going to have a big impact for both countries", Chen said.
Growth previous year was the strongest in a decade, since before the global financial crisis.
The Trump administration wants China to drop what it calls its predatory drive to supplant American technological dominance, through tactics that include forcing US companies to reveal trade secrets in return for access to the Chinese market and committing cyber-theft. They rated the trade risk ahead of troubles from Italy's heavy debt load or faster than expected interest rate increases from the U.S. Federal Reserve.
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Noting reports that the U.S. could add a tax on essentially every product shipped from China, Gao said "using the tariff stick to bully on trade runs against the trend of the times".
China's commerce ministry, in a statement shortly after the United States deadline passed at 0401 GMT on Friday, said it was forced to retaliate, meaning imported United States goods including cars, soybeans, and lobsters also faced 25 per cent tariffs. Trump has threatened to hit back with vehicle tariffs of 20%, which would be highly damaging for the German auto industry.
"The United States will be opening fire on the whole world and also opening fire on itself", said China's Commerce Ministry spokesperson on Thursday, reiterating that Beijing will fight back. This makes their products more expensive and less competitive. Of those, 81,000 - worth $2.37 billion - went to China. Companies are also including exit clauses in their purchase contracts with US suppliers, Reuters reported in March. The main Chinese stock market index has tumbled 12 percent over the past month.
Even if the overall effect is to harm growth, there could be benefits for some European companies and sectors. Second, the USA is pursuing trade wars on multiple fronts, extending the skirmish against its ostensible allies like Canada and the EU. Volkswagen stocks added 4.5 percent. Americans worry that rising Chinese technological prowess might erode US industrial leadership and prosperity.
Prices are rising, especially for steel and aluminium, and companies are starting to feel reticent about investments or planning to shift production overseas to avoid retaliation against USA exports. The additional US goods to China could come at the expense of European competitors.
China would likely replace the lost USA barrels from their top sellers Russian Federation or Saudi Arabia, which have recently announced plans to raise output.
Replacing American shipments with coal from other places would not be hard for China, but a loss of business with the world's top importer of the fuel would hurt companies in West Virginia, a state that heavily favoured Trump in the 2016 presidential election.