Beijing has accused the United States of “extreme pressure and blackmailing” and vowed to retaliate after Mr Trump threatened more tariffs on $200bn of Chinese products.
The United States has now imposed tariffs on up to $450bn in Chinese goods, out of a total of $500bn of imports.
“The fundamental reality is that talk is cheap,” White House adviser Peter Navarro told reporters on a conference call, adding Beijing “may have underestimated the resolve of President Donald J. Trump”.
“If they thought that they could buy us off cheap with a few extra products sold and allow them to continue to steal our intellectual property and crown jewels, that was a miscalculation,” he added.
“Our phone lines are open; they have always been open,” said Mr Navarro, who has taken a hard-line stance against Beijing.
But he denied the latest dispute would damage the relationship between the two countries.
“This is a trade dispute – nothing more, nothing less,” he added. “President Trump has a great relationship with President Xi (Jinping of China).”
Investors had hoped Mr Trump’s loud threats were nothing more than bluster but as a trade war looms between the world’s two biggest economies, global stocks markets sank.
On Wall Street, the Dow Jones Industrial Average closed down 1.1% on Tuesday.
On Friday, the US decided to impose 25% tariffs on $50bn of Chinese products.
Beijing immediately retaliated by matching the US levy, but Mr Trump asked officials on Monday to identify $200bn of Chinese goods to be subject to a 10% tariff.