How do i respond to je t'embrasse?

"Je t'embrasse" = "Kisses", literally "I kiss you".

Possible answers: "Moi aussi" (me too), "Itou" (me too, fam.), "Bisous" (kisses, fam.), "Mille (et un) baisers" (a thousand -and one- kisses), etc.

Or, to surprise your penpal with your extended knowledge of French, "Je te fais un gros poutou" (I give you a big kiss, fam.) All are safe bets and none have sexual connotations.

Maybe even "Kiss kiss!" to play on the fact that you are an English speaker. This would be understood by most French speakers.
If it's online, readers should be familiar with the "XO" (hugs and kisses) graphic (and therefore international) signature too.