(Yicai Global) July 25 -- The China-US economic dialogue has failed to deliver the anticipated results, and market is worried about a possible trade war between the two countries, though its scope may be limited, UBS Wealth Management said in its latest research note.

The dialogue has ended abruptly, a possible sign that trade differences between the two largest economies may have worsened, the report dated July 21 said.

The US demands China to make compromises in terms of steel subsidies, financial support for state-owned enterprises and deregulation of the financial services market, and China expects that the US government can lift the ban on high-tech product exports, per the report.

In the second half of the year, the report continued, the US might levy additional tariffs on Chinese products such as steel, aluminum, electronics, textiles and garments. China, on the other hand, might retaliate in such sectors as agricultural goods and aircrafts.

However, as the trade war expands, the two sides is likely to kick off a new round of trade and investment negotiations eventually, the report suggested.

The Sino-US Comprehensive Economic Dialogue started on July 19 in Washington, but ended abruptly on the same day, and the press conference was cancelled by both countries without any joint statement or new trade deal announcement issued. The US Department of the Treasury only released a brief statement after the meeting.

The US registered a trade deficit of USD347 billion with China last year, accounting for almost half of its total trade deficit. The pair has reached a consensus on reducing the trade deficit, but their expectations are markedly different.