Washington / Beijing, 17 October 2025 — U.S. President Donald Trump acknowledged on Friday that the 100% tariffs he threatened on Chinese goods are “not sustainable,” even as he defended them as a forced response to Beijing’s recent export controls.
In an interview with Fox Business, Trump remarked, “It’s not sustainable, but that’s what the number is. They forced me to do that.” He attributed the decision to China’s tighter restrictions on rare earth element exports, which are vital to high-tech supply chains.
Despite his misgivings, Trump reaffirmed that he still plans to meet with Chinese President Xi Jinping in South Korea in the coming weeks, suggesting a continued channel for diplomacy amid escalating tensions.
Trade Levers & Market Response
Trump’s tariff announcement came a week after he unveiled fresh levies of 100% on China’s exports to the U.S., alongside plans to restrict U.S. exports of critical software starting 1 November. The move was framed as payback for China’s recent export controls on rare earths.
Markets responded dynamically: U.S. stocks rebounded slightly as investors interpreted Trump’s “not sustainable” claim as a possible signal of easing rhetoric. Meanwhile, global observers weighed whether the tariff threat was credible or largely tactical.
China, for its part, defended its rare earth export controls, calling Trump’s tariff threat hypocritical. Beijing stopped short of immediate retaliation, instead urging U.S. restraint and highlighting its export controls as justified measures in response to U.S. actions.
What This Means for Asia & Trade Dynamics
- Regional Supply Chains at Risk: Asia’s export-oriented economies may face ripple effects if U.S.–China tensions lead to supply chain disruptions or tariff spillovers.
- Trade Diversification Accelerates: Countries like Vietnam, Malaysia, and ASEAN may accelerate diversification away from China as firms hedge geopolitical risk. Already, at China’s Canton Fair, exporters reported sharp drops in U.S. buyers and increased focus on Southeast Asian and Latin markets.
- Diplomatic Windows Remain Open: Trump’s reaffirmed plan to meet Xi suggests neither side is abandoning negotiation yet, offering room for de-escalation if both sides shift tone.
- Tariff Policy May Be Tactical: Analysts caution that a 100% tariff is extreme and unlikely to be fully implemented, especially given its economic implications. Trump’s statement that it’s “not sustainable” may signal future flexibility.
