USA stocks plunged on Monday with Nasdaq experiencing its worst day of 2019, as investors monitored the latest development of global trade.
Mr Kudlow also admitted that the increased USA tariffs would be paid for by "both sides", which contradicted Mr Trump's assertion that U.S. consumers would not be affected by the latest hike. But Kudlow, head of the president's National Economic Council, acknowledged over the weekend that US consumers and businesses will bear some of the costs.
"Both sides will pay", he told Fox News. Both companies get a significant amount of revenue from China and stand to lose heavily if the trade war drags on.
In a statement, American Soybean Association President Davie Stevens, a soybean farmer from Clinton, Kentucky, expressed frustration that "the US has been at the table with China 11 times now and still has not closed the deal. Losing a valuable market, losing stable pricing, losing an opportunity to support our families and our communities".
Trump has also asserted that trade wars are "easy to win", but Kudlow accepted that they come with costs for the U.S. economy, though he downplayed the effect. The administration previous year handed farmers aid worth $11 billion to offset losses from trade conflicts.
They also believe that the Fed's asset purchases, a stimulus measure, had skewed the curve. Utilities were the only sector to rise on the stock market, and prices for US government bonds, which are considered ultra-safe investments, rose sharply, sending yields lower.
The president's allies in Congress scrambled to limit the damage to farm country.
"Such an inversion of the curve has often been accompanied, or followed, by a downturn in the USA economy and stock market", Mr. Higgins said.
"So if you need that new iPad, it is you who will be paying the import duty, not some worker in China", Weinberg wrote in a research note. "You can't move these goalposts like they're moving them and expect to be respected".
A 25% tariff applies to 2,493 items including industrial chemicals, electronic equipment, precision machinery and hundreds of food products, according to the Finance Ministry.
US President Donald Trump said he would meet Chinese President Xi Jinping next month as the trade war between the world's two largest economies intensified, sending shivers through global markets.
State television said in a commentary the effect of the USA tariffs on the Chinese economy was "totally controllable".
Technology companies, which do a lot of business with China, led the way lower. The index is coming off its worst week since January, though it's still up sharply for the year.
The tensions "raise fresh doubts about this recovery path", said Morgan Stanley economists Robin Xing, Jenny Zheng and Zhipeng Cai in a report. The falling price has put pressure on USA farmers.
The Dow Jones Industrial is down 470 points, or 1.8%. That would pull annual growth below 6%, raising the risk of politically unsafe job losses.
China's state media tried to reassure businesses and consumers the ruling Communist Party has the resources and policy tools to respond.
Boeing plunged 4.9%. A spokesman for the company said Boeing was "confident the USA and China will continue trade discussions and come to an agreement that benefits both United States and Chinese manufacturers and consumers". "It is no big deal".
Gold futures on the COMEX division of the New York Mercantile Exchange rose over one percent on Monday, as investors took refuge in haven gold after USA equities dropped amid escalating trade frictions between the United States and China.
A stumbling block has been USA insistence on an enforcement mechanism with penalties to ensure Beijing carries out its commitments.