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(CNN) —  

President Donald Trump on Wednesday tried to tamp down economic anxieties over tariffs recently announced by China and the United States.

“We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,” Trump tweeted, adding, “Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!”

He later tweeted, “When you’re already $500 Billion DOWN, you can’t lose!”

The President was apparently referring to a deficit of $506 billion in Chinese exports to the US in 2017. Overall, however, the US trade deficit with China is closer to $337 billion when factoring in goods and services, according to figures provided by the US Bureau of Economic Analysis.

Trump’s proclamations come amid a tit-for-tat on trade restrictions that he decided to engage in.

On Tuesday, the Trump administration published a list of about 1,300 Chinese exports – worth about $50 billion annually – that it intends to target with 25% tariffs. China responded on Wednesday, with its Ministry of Commerce announcing plans to impose its own 25% tariff on $50 billion worth of US exports. The 106 affected products will include aircraft, cars and soybeans.

Following Trump’s tweets Wednesday morning, White House chief economic adviser Larry Kudlow also sought to downplay trade war fears, telling reporters outside the White House that the President’s threat of new tariffs on China are just a negotiating position.

“I don’t think people should overreact right now,” Kudlow said. “This is a negotiation using all the tools.”

Asked to explain the President’s tweet and if he agreed with the sentiment that you can’t lose a trade war, Kudlow replied: “I’m not sure what exactly he’s referring to.”

“You have proposals,” Kudlow said, referring the US tariffs proposed against China. “There’s no action here and you’re going to go through a process of comments and resubmitting comments and discussions.”

“You’re not likely to see any definitive actions for a couple of months,” he added.

Kudlow acknowledged that the chances that the tariffs against China might never materialize is “not zero,” but he said it would be up to Trump to decide what, if any tariffs, are levied.

Kudlow vocally opposed Trump’s decision to levy blanket steel and aluminum tariffs prior to joining the administration, but on Wednesday, he said he supports Trump’s decision to target China for intellectual property theft and other trade disagreements.

“Specific targeted actions I’m fine with. And this China thing makes sense,” Kudlow said. “I think the President is doing the right thing.”

01:54 - Source: CNN
China is hitting the US where it hurts: Soybeans

The escalating exchange of tariffs between the US and China has many analysts – and markets – fearing a potential trade war.

US stocks were poised to open sharply lower on Wednesday after China announced its plans.

Last month, after the administration announced new steel and aluminum tariffs, Trump tweeted that “trade wars are good.”

“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” he tweeted. “Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”

CNN’s Patrick Gillespie, Daniel Shane, Ivana Kottasová and Jethro Mullen contributed to this report.