U.S. President Donald Trump on Friday acknowledged that his administration’s newly imposed 100% tariff on Chinese goods would not be sustainable in the long term but said Beijing’s latest trade restrictions forced his hand.
In an interview with Fox Business Network, Trump defended the move as a necessary response to China’s decision to expand export controls on rare earth elements — materials critical to the global technology and defense industries.
“It’s not sustainable, but that’s what the number is,” Trump said. “They forced me to do that.”
The announcement, which came a week after Trump reimposed sweeping tariffs on U.S.-bound Chinese exports, represents the sharpest escalation yet in a renewed trade standoff between Washington and Beijing. The tariffs, combined with new export controls on “any and all critical software,” are scheduled to take effect by November 1 — just days before existing tariff relief was due to expire.
Trump’s aggressive move follows Beijing’s tightening of controls on rare earth exports — a strategic resource where China commands over 80% of global supply. These elements are indispensable in manufacturing semiconductors, electric vehicles, and military hardware, and any disruption threatens to send shockwaves through the global technology supply chain.
Despite his tough rhetoric, Trump sought to ease fears of a prolonged confrontation, revealing that he will meet Chinese President Xi Jinping in two weeks in South Korea — a summit he had earlier suggested might not happen.
“I think we’re going to be fine with China,” he said. “But we have to have a fair deal. It’s got to be fair.”
Trump’s remarks, coupled with his confirmation of the upcoming meeting, appeared to calm Wall Street after a volatile week. U.S. stock indexes, which had been rattled by the tariff announcement and renewed concerns about regional bank stability, began to recover in afternoon trading.
As Trump prepared for a separate lunch meeting with Ukrainian President Volodymyr Zelenskiy at the White House — focused on Ukraine’s war with Russia — he signaled a willingness to continue dialogue with Beijing.
“China wants to talk, and we like talking to China,” he said.
U.S. Treasury Secretary Scott Bessent, speaking at the same event, echoed the president’s optimism, revealing that he planned to hold talks with Chinese Vice Premier He Lifeng later on Friday to keep negotiations on track.
“I think that things have de-escalated,” Bessent said. “We hope that China will show the respect that we have shown them, and I am confident that President Trump, because of his relationship with President Xi, will be able to get things back on a good course.”
Global Concern and WTO Warning
The renewed tensions between the world’s two largest economies have triggered concern among global financial institutions. The head of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, told Reuters she’s concerned about the latest escalation of the tension and has urged both sides to ease trade hostilities.
The WTO’s appeal underscores growing anxiety within the international community as fears mount over supply chain disruptions, inflationary pressures, and declining investor confidence. The 100% tariffs, while aimed at pressuring Beijing, also risk raising costs for U.S. manufacturers and consumers already grappling with high borrowing rates and slow global growth.
Despite signals of renewed dialogue, the rift between Washington and Beijing appears to be widening. In a statement to the International Monetary Fund’s steering committee on Friday, Treasury Secretary Bessent accused China of using “state-driven economic practices” that distort global trade. He urged international financial institutions such as the IMF and World Bank to adopt a tougher stance toward Beijing’s industrial and trade policies, which he said have led to “excess manufacturing capacity flooding the world with cheap goods.”
Beijing pushed back strongly. China’s Commerce Ministry accused the United States of undermining the rules-based multilateral trading system since Trump’s return to office in 2025, vowing to intensify its use of WTO dispute settlement mechanisms to challenge U.S. measures it considers discriminatory.
The exchange highlights the growing tension between Trump’s nationalist trade agenda — which aims to bolster domestic manufacturing and reduce reliance on Chinese imports — and Beijing’s insistence on defending its export-driven economic model.
Rare Earths and Economic Stakes
At the heart of the dispute lies China’s dominance of rare earth elements, a sector that has become increasingly weaponized amid geopolitical rivalry. China’s decision to tighten exports of these materials has raised fears among Western manufacturers of potential shortages, particularly in industries such as defense, renewable energy, and electric mobility.
Analysts have warned that if the restrictions persist, they could destabilize key segments of the global economy, as the United States and its allies scramble to diversify supply chains and ramp up domestic production. However, experts also caution that Trump’s 100% tariffs could boomerang by inflating input costs for U.S. firms and slowing industrial investment.
However, Trump’s acknowledgment that the tariff is “not sustainable” reflects the precarious balance between political posturing and economic reality. The president has repeatedly portrayed himself as a dealmaker capable of extracting concessions from Beijing, but his latest move risks entrenching the standoff rather than resolving it.
For now, markets appear cautiously optimistic. The rebound in U.S. equities on Friday indicated that investors are betting on an eventual compromise. Yet the underlying uncertainty remains high, as the world watches to see whether Trump and Xi’s meeting will produce a meaningful breakthrough or merely a temporary pause in an escalating economic rivalry that continues to define global trade.
