Consumer confidence in the U.S. waned in the second half of May from an initial estimate after the country's trade dispute with China further escalated earlier this month with another round of tit-for-tat tariffs.

The University of Michigan's index of consumer sentiment was lowered to 100.0 from a preliminary reading of 102.4, still above the index reading of 97.2 in April, final survey results showed. Econoday's consensus forecast was an index reading of 101.5.

In the second half of the month, 35% of consumers surveyed made unfavorable references to tariffs, up from 16% in the first half of the month and 15% in April.

"Although consumer sentiment remained at very favorable levels, confidence significantly eroded in the last two weeks of May," said Surveys of Consumers Chief Economist Richard Curtin.

The current economic conditions score in May fell to 110.0 from 112.3 in April, while the index of consumer expectations rose to 93.5 from 87.4.

Year-ahead inflation expectations rose to 2.9% in May from 2.5% in April. Curtin noted that the increase was recorded before the actual rise in consumer prices due to the latest tariffs.

Inflation expectations among those who negatively cited tariffs was 0.5 percentage point higher than those who made no such references.

As a result of higher inflation expectations, buying conditions for appliances and other large household durables fell to a four-year low, according to Curtin.

"The combination of higher inflation and a slower pace of spending provide conflicting signals for monetary policy," Curtin said. "The divergence will further widen if, as is likely, the trade war escalates."

After the recent tariffs actions, trade tensions between the U.S. and China continued during the rest of the month, with Washington blacklisting Huawei Technologies Co. Ltd. and China reportedly halting purchases of American soybeans.

China has also threatened to restrict the export of its rare earth minerals to the U.S., and will also reportedly blacklist "unreliable" foreign entities it believes threaten domestic companies.