China responded with tariffs on $3 billion worth of USA items, largely agricultural products and metal. But they have rejected changing technology development plans they see as a path to prosperity and global influence.
The U.S. has only started exporting LNG en masse in the last few years, owing to the explosion of natural gas production thanks to fracking and other drilling methods.
China had curtailed its imports of U.S. LNG over the last two months, even before its formal inclusion in the list of potential tariffs.
The US, the world's largest economy, has a trade deficit of nearly United States dollars 500 billion with China, the world's second largest economy.
The highest penalties in today's list would be imposed on honey, vegetables, mushrooms and chemicals, targeting farming and mining areas that supported President Donald Trump in the 2016 election.
Foreign ministry spokesman Geng Shuang told media that "the Chinese side calls on the U.S. to return to rationality, and eradicate its mistakes to create the right conditions for resolving the problem".
Beijing's earlier penalty tariffs appeared to be created to minimize the impact on the Chinese economy by targeting goods such as soybeans and orange juice that are available elsewhere.
On March 1, President Donald Trump announced that the USA would be slapping a 25 percent tariff on all steel imports and a 10 percent tariff on all aluminum imports.More news: Person taunts bison in Yellowstone National Park
However, speaking to reporters at the White House, Kudlow said there had been some communication on trade "at the highest level" in recent days.
Beijing says the United States is deliberately creating the trade conflict, using bullying tactics, and ignoring worldwide negotiating norms so that it can stop the rise of China as a competitor on the world stage.
The statement said the date of implementation of the taxes will depend on the "actions of the USA side" and China reserves the right to apply "other countermeasures". Washington also wants China to stop subsidizing Chinese companies with cheap loans, claiming that this allows them to compete unfairly.
More from Bloomberg.com: U.S.
The foreign ministry spokesman appealed to Washington to negotiate but could not confirm reports the two sides were setting up talks.
Trump campaigned on a promise to bring down America's massive trade deficits by renegotiating trade agreements and getting tough on countries like China that sell the US far more than they buy from it.
The Chinese commerce ministry blamed the United States for escalating the situation. "It has seriously violated the principles of the World Trade Organisation", Hong Kong-based South China Morning Post quoted the statement as saying. So far this year, the trade gap is up more than 7 percent from January-June 2017.