Contradicting recent statements by President Trump, National Economic Council director Larry Kudlow conceded Sunday that a recent increase in tariffs on Chinese goods will not only hurt China, but American companies and consumers as well. "Both sides will pay," Kudlow, the president's top economic adviser, said on "Fox News Sunday," referring to the escalating trade dispute between the U.S. and China — the world's largest economies.

Pressed about comments in which Mr. Trump has alleged that Beijing will end up paying for the increased levies, Kudlow responded that "both sides will suffer on this."

Still, he argued that China's Gross Domestic Product will ultimately suffer more from the recent 15 percent tariff hike — which went into effect Friday — because of a "diminishing export market."

The president has repeatedly claimed that China will bear the brunt of the tariffs and be required to pay billions of dollars to the U.S. On Saturday, he bragged about loving to collect "big tariffs" and warned Chinese officials to continue negotiations, which broke down last week after he accused Beijing of backtracking on a potential trade agreement.

Get Breaking News Delivered to Your Inbox

"The deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now," he wrote on Twitter.

Kudlow said he expects the Chinese government to retaliate in the coming days.

"I reckon they will. We'll see what they come up with," he said.