Larry Kudlow, the new director of the National Economic Council, said on Wednesday that President Trump Donald John TrumpBubba Wallace to be driver of Michael Jordan, Denny Hamlin NASCAR team Graham: GOP will confirm Trump's Supreme Court nominee before the election Southwest Airlines, unions call for six-month extension of government aid MORE’s proposed tariffs against China could be a negotiating tactic.

"Yes, it's possible. It’s part of the process,” Kudlow said when asked by Kristen Welker of NBC News if it's possible that tariffs against China are a negotiating tactic and won’t go into effect. “I would take the president seriously on this tariff issue.”

Kudlow’s remarks come shortly after China announced it plans to implement retaliatory tariffs on $50 billion worth of U.S. goods after President Trump announced last month that he planned to slap tariffs on $50 billion worth of Chinese goods.

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China’s announcement triggered a sell-off in financial markets and the U.S. stock market dropped more than 300 points right after opening. A number of companies that would be affected by the proposed tariffs saw a sharp decrease in their stock values.

Trump’s tariffs are aimed at forcing China to address their intellectual property policies.

China’s retaliation to Trump’s tariffs have triggered fears that escalating tensions between the two nations could lead to a trade war.

Trump also announced earlier this year that he would implement a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, although a number of allied nations have been exempted from the tariffs.

“He wants to solve this with the least amount of pain. Here is the key point, both sides benefit by positive solutions that lower barriers and open markets,” Kudlow said.

Kudlow said the administration is focused on growth. Asked if there can be growth when there is a trade war, Kudlow responded that “hopefully we won’t get to that point.”