President Donald Trump on Friday indicated the high tariffs his administration imposed on Chinese imports will not last forever, suggesting a loosening of trade tensions ahead of his impending summit with Chinese President Xi Jinping. In an interview with Fox Business, Trump said, “It is not sustainable,” insisting China had, in effect, compelled his administration to implement these tariffs. The meeting with Xi is set to take place within two weeks in South Korea, where Trump was hopeful of positive talks.
“I think we will do fantastically well with China,” Trump told reporters, maintaining his criticism of China’s historical trade practice, asserting the nation has “taken advantage of our country for many years,” but that it has been reversed during his presidency. He reiterated the need for strength in approaching the U.S.-China dynamic, saying, “We have a very powerful adversary, and they only respect strength.”
These remarks were a shift in tone from last week’s threats to double the tariffs to 100% from November 1 as retaliation to China’s block on the export of rare earth minerals. Financial markets welcomed Trump’s remarks positively, with S&P 500 and Nasdaq futures trimming earlier losses on the optimism of a decline in trade tensions.
The Trump-Xi meeting has the possibility to set the stage for resumed negotiations and possible realignment of American and Chinese trade policy following years of worsening tariff battles.
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