The Trump administration on Wednesday played down the possibility of a trade war with China and signaled possible negotiations out of the current escalating tit-for-tat of tariff retaliations.

US President Donald Trump tweeted in the early morning before the opening of the New York Stock Exchange that "we are not in a trade war with China."

Commerce Secretary Wilbur Ross told CNBC in the morning that he expects trade actions between China and the US will likely lead to a negotiated deal.

"It wouldn't be surprising at all if the net outcome of all this is some sort of a negotiation," he said.

Larry Kudlow, the new director of the White House National Economic Council, told NBC News that it's possible that Trump's tariffs are a negotiating tactic and won't go into effect.

"Yes, it's possible. It's part of the process," he said when asked whether it was possible that tariffs against China are a negotiating tactic and won't go into effect.