Larry Kudlow, the director of President Trump's National Economic Council, said yesterday that trade talks continued, and went out of his way to say there was a chance of a meeting between President Trump and China's Xi Jinping.
Talks in Washington broke off on Friday without a deal, but both sides have indicated that future talks are likely.
Analysts have also warned that a national security review process for foreign investments in China might enable Beijing to freeze out U.S. investment to an even greater extent than before, as another form of retaliation.
Talks ended without success on Friday and Trump raised the spectre of a full-blown trade war when he ordered that tariffs on Chinese imports worth around $200bn be raised from 10% to 25%.
The US President increased tariffs on Chinese imports by 25 percent last week in a move which heightened tensions between the two states.More news: Sri Lanka town under curfew after anti-Muslim attacks
Vietnam is emerging as a major beneficiary of the trade war, with a string of American companies operating in China seeing the nation as the top choice for relocation.
"We were moving well, constructive talks and I still think that's the case", Kudlow said.
Later Sunday, Trump reiterated his view in a tweet: "We will be taking in Tens of Billions of Dollars in Tariffs from China".
Mr. Kudlow acknowledged that Americans will feel the brunt of consequences from the tariffs, in having to pay high taxes on Chinese goods.
China's head envoy to last week's trade talks, Vice Premier Liu He, said before leaving Washington on Friday that Beijing would not compromise on matters of principle and that tariffs on Chinese exports to the USA should be lifted as a condition for striking a deal.
The United States and China appeared at a deadlock over trade negotiations on Sunday as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any "bitter fruit" that harmed its interests. Growth in the world's second-largest economy held steady at 6.4% over a year earlier in the latest quarter, supported by higher government spending and bank lending.More news: Nuggets rout Trail Blazers, 124-98, for 3-2 series lead
China's nationalist Global Times tabloid also said in an editorial on Monday that the country had no reasons to fear a trade war.
The president doubled down on his argument on Sunday, tweeting that the U.S. would be "taking in Tens of Billions of Dollars in Tariffs from China", while advising American consumers who have been concerned by the lack of imported goods to buy them somewhere else or take matters into their own hands and produce them in the US.
President Donald Trump's combative stance, highlighted by the new round of import tariffs imposed this week, has upended decades of cautious statecraft in the West aimed at coaxing China to join the global order.
State media tried to reassure Chinese companies and consumers the ruling Communist Party has the resources and policy tools to respond.
Makers of clothing and furniture already were shifting production to Southeast Asia due to rising Chinese wages. "Buyers of product can make it themselves in the U.S. (ideal), or buy it from non-Tariffed countries.", he said. Economists say more might follow to reduce the risk of American tariff hikes.
The abruptness of Trump's May 5 announcement made companies see doing business in China as more uncertain, said Parker of the U.S.More news: Putin Takes a Tumble During His Victory Lap