But its troubles were amplified by a broad-based sell-off in big US technology stocks, which have been hammered by the threat of fresh tariffs in an increasingly bitter US-China trade war.
The yearlong trade frictions between the world's two biggest economies re-escalated last week when the Trump administration announced a 25 per cent punitive tariff on thousands of Chinese products.
The president insisted over the weekend that a robust 3.2 per cent growth in the American GDP is tied to his aggressive tariff policy, and suggested Monday that China has far more to lose than the U.S.
The "points" are a reference to the percentage increase in tariffs on Chinese goods, from 4 per cent to 25 per cent, compared to a more modest tariff hike the Chinese have recently enforced in the other direction.
After the meeting, Mr Trump Tweeted extensively about the ongoing trade war, he warned of "big tariffs" and called on U.S. companies to produce goods domestically to avoid tariffs and reiterated that Beijing "broke the deal".
But Beijing appeared to dig in.
Earlier in the day, Chinese Foreign Ministry spokesman Geng Shuang warned that his country "would never surrender to external pressure".
Trump declared on Twitter Monday: "China should not retaliate-will only get worse!" He said the tariffs can be completely avoided if purchases are made from other non-tariffed countries or if products are purchased in the U.S. The U.S. and other trading partners say such efforts violate Beijing's free-trade commitments.
Kudlow also said that Trump and China's President, Xi Jingping, may meet in late June at the G20 worldwide conference in Japan.
"The market reaction will ultimately depend on whether China and the USA continue to negotiate, whether the remaining $325bn of United States imports from China also get tariffed, how China retaliates, and what happens to the (section) 232 auto tariffs". Mr Trump tweeted shortly before news of the Chinese decision came. Trump said on Monday his administration was planning to provide about $15 billion to help farmers whose products might be targeted.
Last August Trump announced a plan to increase tariffs on $200 billion of Chinese imports to 25% from 10% (which are the tariffs that went into effect last Friday). He added that US tariffs would remain in place while negotiations remain. "Buyers of product can make it themselves in the United States of America (ideal), or buy it from non-Tariffed countries.", he said.
Global equities fell sharply on Monday as hopes of an imminent trade deal between the world's two largest economies were crushed.
This latest round of tariffs will add another $500 a year in costs for the average American household, says Katheryn Russ, an economics professor at the University of California at Davis.
The president believed Treasury Secretary Steve Mnuchin and US Trade Representative Robert Lighthizer had cut a deal until the Chinese officials told them no.
Still, the two countries have given themselves something of an escape hatch: The higher Chinese tariffs don't kick in for 2 1/2 weeks.