The potential of a recession in the U.S. is now "the biggest concern" as Washington and Beijing continued to up the ante in their protracted trade fight, according to a strategist at Standard Chartered Private Bank.

The probability of a U.S. recession in the next 12 months has risen from 25% to "as high as 40%," said Clive McDonnell, head of equity strategy at the bank.

The ongoing trade war between the two economic powerhouses is heating up again after China on Friday announced new duties on $75 billion worth of goods from the U.S, in retaliation for U.S. President Donald Trump's threat to impose more tariffs earlier in August.

That prompted a swift response from Trump, who announced he will hike tariff rates on most goods imported from China.

He also tweeted that American companies "are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA."

Trump Tweet

Trump Tweet

Trump Tweet

"The compounding effect of all these ... continuous ratcheting in terms of tariffs is definitely escalating the risk that the U.S. just glides into recession," McDonnell told CNBC's "Street Signs" on Monday. "I think that's a real concern for markets now."