WASHINGTON/BEIJING (Reuters) - President Donald Trump’s administration said on Wednesday talks with Beijing could resolve an escalating U.S.-China trade fight after China retaliated against U.S. proposals to slap tariffs on $50 billion in Chinese goods by targeting key American imports with similar duties.

Just 11 hours after the Trump administration proposed 25 percent tariffs on some 1,300 Chinese industrial, technology, transport and medical products, China responded with a list of similar duties on key American imports including soybeans, planes, cars, beef and chemicals.

(GRAPHIC: U.S. imports from China - tmsnrt.rs/2FMsz1Q)

(GRAPHIC: U.S. trade in goods with China - tmsnrt.rs/2GcOZIH)

Global stock markets, fearful of a trade war between the world’s two economic superpowers, were shaken by the salvos between China and the United States but have since regained some lost ground.

Trump, who contends his predecessors served the United States badly in trade matters, rejected the notion that the tit-for-tat moves amounted to a trade war.

“We are not in a trade war with China that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,” he wrote on Twitter.

Asked by reporters outside the White House whether the United States could lose a trade war, Trump’s top economic adviser, Larry Kudlow, said, “No. I don’t see it that way. This is a negotiation, using all the tools.”

“What you’ve got is the early stages of a process which will include tariffs, comments on the tariffs, then ultimate decisions and negotiations. There’s already back-channel talks going on,” Kudlow separately told Fox Business Network.

U.S. Commerce Secretary Wilbur Ross told CNBC, “It wouldn’t be surprising at all if the net outcome of all this is some sort of a negotiation.”

If the two countries are unable to come up with a way to settle the dispute, a full-scale trade war could destabilize U.S.-Chinese commercial ties, an important component of the global economy.

The trade actions will not be carried out immediately, so there may be room for maneuver. Publication of Washington’s list starts a period of public comment and consultation expected to last around two months. The effective date of China’s moves depends on when the U.S. action takes effect.

China’s quick and muscular response to the U.S. tariffs initially spurred a U.S. stock market selloff with the Dow Jones Industrial Average falling 2 percent at the open, but the indicator was down just 0.38 percent in early afternoon trading.

Shares of aerospace giant Boeing Co, the single largest U.S. exporter to China, tumbled 2.7 percent, while those of agricultural machinery maker Deere & Co slid 4.5 percent and those of Caterpillar fell 1.8 percent.

The S&P 500 was last down 0.20 percent. The U.S. dollar also fell and oil dropped to a two-week low.

While Washington targeted products that benefit from Chinese industrial policy, including its “Made in China 2025” initiative to replace advanced technology

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