President Donald Trump said the US will “be fine” with China in comments that come just before the two sides return to the negotiating table and a fragile trade truce nears expiration.

When asked in an interview with Fox News on Sunday about his threat to raise the tariff on Chinese goods by 100%, Trump said the levy is “not sustainable” though “it could stand”.

He added that he had a good relationship with the Chinese leader, and he expects a sitdown to happen in South Korea, where an Asia-Pacific Economic Cooperation meeting starts later this month. “I think we are going to be fine with China, but we have to have a fair deal. It’s got to be fair,” Trump said.

Treasury Secretary Scott Bessent has said the US and China will hold talks later this week in Malaysia. That came after he met virtually with Vice Premier He Lifeng last Friday, discussions that Chinese state media described as a constructive exchange of views.

A little over a week ago, Trump raised the prospect of canceling his first in-person meeting with China’s President Xi Jinping since he returned to the White House, angry over the Chinese government’s vow to exert broad controls on critical rare-earth elements. He also declared a 100% import surtax on Chinese goods to take effect on Nov 1.

That threatens a trade truce that’s set to run out on Nov 10 unless extended. After months of tentative stability in the US-China relationship, tensions flared in recent weeks after Washington broadened some tech restrictions and proposed levies on Chinese ships entering US ports. China responded with parallel moves and outlined tighter export controls on rare earths and other critical materials.

China has tried to ease concern over the escalation of curbs on rare earths — critical to making fighter jets, smartphones and even car seats — to soften an international backlash.

In discussions on the sidelines of the International Monetary Fund’s annual meetings last week, Chinese delegates told their counterparts from around the world that tightened export controls will not harm normal trade flows, Bloomberg News reported earlier, citing people familiar with the matter.

The officials said China sought to build a long-term mechanism with the measure, and it was introduced as a response to US provocations such as the expansion of sanctions to capture subsidiaries of blacklisted companies, according to the people, who asked not to be named because the exchanges were private.

Source: Bloomberg

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