Outgoing Congressional Budget Office Director Keith Hall said Wednesday that the agency may redo its economic forecast this summer if the U.S. and China continue to implement their tariffs.

The world's two largest economies increased tariffs on one another this month, with the U.S. making the first move by increasing duties on $200 billion worth of Chinese products from 10% to 25%. China announced plans to raise tariff rates on $60 billion in U.S. goods. The tactics amplified a trade fight that has rattled financial markets and threatened to drag on the global economy.

The nonpartisan CBO forecasts U.S. economic growth to reach 2.3% in 2019, down from 3.1% in 2018, and then average 1.7% annually for the next three years. But Hall, whose last day as the agency's director is Friday, said if tariffs continue for longer than expected, "we expect there to be a drag on growth."

"We may even make a point this summer to redo our forecast and maybe even downgrade it a little bit," Hall said in an interview on CNBC's "The Exchange." "Tariffs are taxes. Taxes slow down the economy."

Stocks were lower Wednesday in part on concerns by investors that the U.S.-China trade war could cause a slowdown in the economy.

U.S. and China trade negotiators haven't shown promising signs for a quick deal in recent days. The biggest Chinese newspaper explicitly warned the U.S. on Wednesday that China would cut off rare earth minerals as a countermeasure in the trade battle. On Monday, President Donald Trump said that the U.S. was "not ready" to make a deal with China before adding that he expected one in the future.

Hall, who also was the 13th commissioner of the Bureau of Labor Statistics before becoming director of the CBO in 2015, noted that the U.S. economy is still working through the stimulus of Trump's 2017 tax cuts. He said that stimulus will eventually "wear out" in about a year or two.

"We really think there is going to be a slowdown to like under 2% in a couple of years," he added.

The CBO's estimates are at odds with the Trump administration's, which sees U.S. growth of 3.2% in 2019 and annual growth of about 3% thereafter.