Trump Admits Threat of 100% Tariffs on China is ‘Not Sustainable’

US President Donald Trump has conceded that his threat of imposing a 100% tariff on goods from China is unlikely to be sustainable.

But the US leader blamed China for the latest impasse in bilateral trade talks, which heated up when Beijing announced last week that it intends to further tighten controls on its rare earth exports.

Asked whether such a high tariff was sustainable and what that might do to the economy, Trump replied, “It’s not sustainable, but that’s what the number is… They forced me to do that,” he said in an interview with Fox Business Network broadcast on Friday.

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Trump unveiled additional levies of 100% on China’s US-bound exports a week ago, along with new export controls on “any and all critical software” by November 1, nine days before existing tariff relief was set to expire.

The new trade steps were Trump’s reaction to China’s dramatic ramp-up of its rare earth element export controls. China dominates the market for such elements, which are essential to tech manufacturing.

Trump also confirmed he would meet with Chinese President Xi Jinping in two weeks in South Korea – a meeting he had cast doubt on last week – and expressed admiration for the Chinese leader.

“I think we’re going to be fine with China, but we have to have a fair deal. It’s got to be fair,” Trump said on FBN’s “Mornings with Maria,” which was taped on Thursday.

‘US stoking panic’

China on Thursday accused the US of stoking panic over its rare earth controls and said Treasury Secretary Scott Bessent had made “grossly distorted” remarks about a top Chinese trade negotiator, rejecting a White House call to roll back the curbs.

The official newspaper of the governing Communist Party also issued a seven-point rebuttal after top US negotiators suggested Beijing could avert President Donald Trump’s threat to impose 100% tariffs on Chinese goods by scrapping the measures set to take effect on November 8.

While investors are relieved the world’s top two economies have avoided the retaliatory tariff hikes of March and April, each exchange risks derailing a meeting between Trump and Chinese leader Xi Jinping in South Korea later this month – a fixed point that has so far helped anchor market stability.

“The US’ interpretation seriously distorts and exaggerates China’s [rare earths export control] measures, deliberately stirring up unnecessary misunderstanding and panic,” He Yongqian, a commerce ministry spokesperson, told a news conference.

“Provided the export licence applications are compliant and intended for civilian use, they will be approved,” she added.

Beijing’s expanded rare earths export controls left trade negotiators and analysts the world over wondering if China intends to require manufacturers of any product anywhere in the world containing even trace amounts of Chinese rare earths to apply for a licence to ship it to its final destination.

He Yongqian told reporters that was not the case.

‘Power grab’

US Trade Representative Jamieson Greer on Wednesday called China’s new measures “a global supply-chain power grab,” and said that he expected Beijing not to implement them, while Bessent suggested another extension to the current 90-day tariff truce – which is set to expire around November 9 – could be possible.

US-China trade relations had appeared relatively stable following a September 19 call between Trump and Xi, which came after a Madrid summit widely viewed as a success thanks to its breakthrough TikTok deal.

Beijing attributes the unexpected ramping up of rhetoric to the US Commerce Department’s surprise expansion of its Entity List in late September to include companies in China and elsewhere that use subsidiaries to bypass export restrictions on chipmaking equipment and other high-tech goods.

Meanwhile, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will hold a call on Friday to discuss ongoing trade negotiations between the two countries, CNBC reported on Friday, without disclosing a time for the call.

• Reuters with additional input and editing by Jim Pollard

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.