The Bank of Korea has expressed concerns over the deepening trade dispute between the U.S. and China, saying the conflict could deal a blow to the South Korean economy.

In a monetary policy report submitted to the National Assembly on Thursday, the central bank described the current financial and economic conditions as being in a state of high uncertainty.

The report cited global trade disputes and the continuous interest rate hikes in the U.S. as financial market variables.

Earlier this month, the U.S. imposed a 25 percent tariff on 34 billion U.S. dollars’ worth of Chinese exports. In retaliation, Beijing issued its own 25 percent tariff on the same value of U.S. products.

The U.S. has unveiled plans to slap additional tariffs on Chinese goods valued at 200 billion dollars, to which China has vowed an active response.