Chinese state media has cautioned that President-elect Donald Trump’s pledge to impose additional tariffs on Chinese goods risks igniting a devastating tariff war between the world’s two largest economies.

While China could offset American tariffs by letting its currency fall, that might endanger Beijing’s recent efforts to stabilize the economy.

President-elect Trump's plan to increase tariffs on goods from China and impose them on products from Mexico and Canada would drive inflation up by nearly 1%, Goldman Sachs estimates.