Top White House economic adviser Larry Kudlow has spent recent days trying to calm investors who are concerned the spat will spark a trade war, saying on Thursday the administration was involved in “delicate negotiations” that might forestall the need for tariffs. He said the U.S. could still hammer out a deal with Beijing, in part by convincing other major economies to call out the Asian nation for unfair trading practices.

Financial Markets

“I call it a trade coalition of the willing,” he said. “Everybody in the world knows that China has not played by the rules for many years.”

The comments helped soothe financial markets that continued climbing on Thursday after a tumultuous start to the week, when investor concerns about the impact of a trade war sent both the Dow Jones Industrial Average and S&P 500 Index down about 2 percent.

Speaking shortly after Kudlow on Thursday, White House trade adviser Peter Navarro also said there's room to make a deal. Talks with China will occur during the 60-day period before tariffs take effect, when Americans can provide the government with feedback on the proposed trade measures against Beijing.

Led by Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, discussions with Beijing will focus on trying “to get to some place where China stops doing what it's doing in terms of its aggressive attacks on our economy,” Navarro told CNBC. He didn't offer more specific details on the timing or location for negotiations.

Navarro's comments were the first indication that talks will take place at some of the highest levels of the U.S. government. Some U.S. economic officials are already engaged in discussions with their Chinese counterparts, according to a person familiar with the matter.

Kudlow gave no indication of how soon the negotiations could bear fruit. “I don't mean to be rude, I appreciate the concerns, but give us some time to play this out,” he told reporters. “We can fix this thing. We can have a great ending.”