The intense focus on the United States’ tariff policy toward China reached a new milestone when President Donald Trump stated that his proposed 100 percent levies on Chinese goods were “not sustainable”. The comment came before his meeting with Xi Jinping and after China restricted rare-earth exports.
Trump made his remarks in an interview with a financial news network on October 18, 2025. He defended the move by stating, “They forced me to do that,” referring to Beijing’s trade and export behaviour. However, he also acknowledged the long‑term burdens imposed by such sweeping tariffs.
This announcement follows a comprehensive escalation in trade tension between the U.S. and China. Earlier in 2025, China imposed export restrictions on critical minerals and rare‑earth elements, citing national security concerns. In turn, the U.S. threatened steep tariffs, including up to 145 percent on some Chinese imports. The current iteration of tariff policy reportedly reached 100 percent in draft form before the president’s comments.
From a broader economic vantage, the substance of the U.S. tariff policy underscores both strategic intent and structural risks. Trump frames the move as rebalancing unfair trade practices after years of large deficits with China. Yet economists warn that such high tariffs carry serious costs: higher input prices for U.S. firms, disrupted supply chains, and risk of retaliatory action.
Japan’s business and political leaders have expressed unease. Japanese firms in electronics, autos, and machinery face rising uncertainty from U.S. and China policy shifts. A Reuters survey earlier this year found nearly 90 percent of Japanese companies believed Trump’s trade strategy would hurt business.
In Washington, senior officials recognised the limits of the tariff approach. One Treasury official described the scale of tariffs as “not sustainable” for the U.S. economy in the long run, even as they stressed that trade pressure on China remains a priority. Markets reacted to the tension: U.S. equities experienced swings as investors weighed inflation risk and growth uncertainty tied to global trade.
Analysts highlight the broader ramifications of the current U.S. tariff policy. First, prolonged high tariffs may chill capital investment as firms hesitate under policy uncertainty. Second, global supply‑chain reconfiguration could accelerate, benefitting countries outside U.S. and China but reducing margins for many legacy exporters. Third, the alignment of trade strategy with broader geopolitical aims means that economic tools are increasingly linked with security policy.
Looking ahead, key questions revolve around how and when the U.S. and China will de‑escalate. Trump plans to meet Xi in the coming weeks and may pivot toward negotiation if pressure grows. On the other side, China may trigger further export controls or retaliatory tariffs if it perceives the U.S. stance as excessive. Meanwhile, multinational companies and governments face a narrowing window to recalibrate production, sourcing and investment plans in light of evolving tariff policy.
In the end, the present moment offers both risk and opportunity. If the U.S. moderates its tariff level and negotiates a durable trade framework, private‑sector certainty could increase. Conversely, if high tariffs remain and expand, the shock waves may ripple across markets, putting pressure on growth and investment globally.
