He has previously warned he is prepared to "go to 500", a reference to the £384bn ($500bn) worth of goods Chinese firms sold to the United States a year ago.
" The US is playing a carrot-and-stick tactic on China, but this approach is not going to work on China", the Ministry said.
"China is in trouble right now - their economy is lousy, investors are walking out, the currency is falling", Kudlow said, in an unusually strong condemnation of a trading partner.
"These are the things we have asked them in a number of meetings, I've participated in most of this stuff and they better not underestimate the president, that's all I'll say".
Chinese Foreign Minister Wang Yi said on Thursday (Aug 2) tariffs will not resolve the trade imbalances that the United States says exist between the two economies and urged Washington to calm down and listen to the voice of the global community. Growth in factory output has begun slowing across advanced economies, while business leaders fear further escalation.
The public comment period on the US tariffs aimed at $US200 billion ends on August 30 after public hearings August 20-23, according to the US Trade Representative's office.
Donald Trump is ramping up the pressure on China. On Friday Kudlow issued a stark warning to China.
Mr Trump is aiming to reduce his country's $375.6 billion goods trade deficit - the gap between imports and exports - with China.
Days later, Washington unveiled a list of another US$200 billion in Chinese goods, from areas as varied as electrical machinery, leather goods and seafood, that would be hit with 10 per cent import duties.
China's Commerce Ministry said in a seperate statement Beijing's new set of proposed import tariffs on U.S. goods were rational and restrained.
"China to take necessary countermeasures to defend the country's dignity and the interests of the people, defend free trade and the multilateral system, and defend the common interests of all countries in the world", the statement said.
Trump has said he is determined to reduce the large USA trade deficit with China.
"[We will] begin the process of a grand deal to tear down barriers and open up markets [with the EU]", he said.