It’s January 2026, and if you feel like you’ve been living through a perpetual trade war loop, you aren't alone. For years, the soundbite of Donald Trump saying China has been the heartbeat of American trade policy. We’ve gone from the "Phase One" deal of his first term to the massive tariff hikes of 2025 that saw rates on some goods skyrocket toward 140%.
But something shifted recently.
✨ Don't miss: What Kind of Plant Exploded in Tennessee: What Really Happened at Accurate Energetic Systems
Last November, a deal was struck. It wasn't just another press release; it was a fundamental recalibration. After a year of "escalation dominance" where the U.S. and China traded blows—tariffs on soybeans, export bans on rare earths, and fights over semiconductor software—both sides seem to have hit a wall of economic reality.
Honestly, the rhetoric has been exhausting. But beneath the "America First" slogans and the aggressive posturing, there’s a new, quieter strategy emerging. It’s called selective decoupling. Basically, we aren't breaking up with China entirely, but we are definitely moving into separate bedrooms.
What Really Happened with Donald Trump Saying China in 2025?
To understand where we are now, you’ve gotta look at the chaos of the last twelve months. In early 2025, the administration didn't just talk; they acted with a sledgehammer. Trump followed through on his campaign threat of a 60% baseline tariff on Chinese imports.
The logic was simple: kill the trade deficit and force factories back to Ohio and Michigan.
But as any economist will tell you (and they did, loudly), trade wars aren't one-sided. China retaliated by choking off the supply of gallium and germanium—the stuff you need to make chips and EVs. By mid-2025, the "Trump Effect" was a mixed bag. While some companies pledged to build new plants in the States, 62% of CEOs in a recent Yale survey admitted they still haven't actually moved their manufacturing.
The November 2025 Breakthrough
The turning point happened during a summit in the Republic of Korea. After months of "Donald Trump saying China" was the greatest threat to American sovereignty, he reached a deal with President Xi Jinping.
💡 You might also like: U of M News: What’s Actually Happening on Campus Right Now
Here is what the "Korea Truce" actually looks like in plain English:
- The Fentanyl Factor: China agreed to halt the flow of precursor chemicals used to make fentanyl. This was a massive win for the White House, allowing them to frame the trade war as a public health victory.
- Rare Earths are Back: Beijing agreed to drop its export controls on critical minerals. If you’re into tech, this is huge. It means the price of batteries and magnets might finally stop looking like a phone number.
- The Soybean Subsidy: China committed to buying 25 million metric tons of U.S. soybeans annually through 2028. Our farmers were basically the biggest winners of this specific negotiation.
- Tariff Cool-down: The U.S. cut some fentanyl-related tariffs by 10% and suspended certain reciprocal hikes until late 2026.
It’s a fragile peace.
Why the Rhetoric Still Matters for Your Wallet
You’ve probably noticed that despite the deal, Donald Trump saying China still sounds pretty aggressive. Why? Because the administration’s 2026 Trade Policy Agenda is focused on "reindustrialization."
They want to turn the U.S. into a "Production Economy."
This isn't just about winning a fight; it's about shifting the entire American way of life. For decades, we were a "consumption economy." We bought cheap stuff made elsewhere. Trump is betting the farm on the idea that Americans want to be makers again.
But here’s the rub: reindustrializing takes time. A lot of it. You can't just flip a switch and have a semiconductor fab running in a month. It takes years and thousands of skilled workers we currently don't have. This is why the 2026 strategy is shifting toward "selective engagement."
The Critical Minerals Gambit
On January 15, 2026, the President signed a proclamation declaring our reliance on foreign-processed minerals a national security threat. He’s given global suppliers a 180-day window to secure alternative agreements that don't involve Chinese processing.
✨ Don't miss: Trump Approval Rating 538: Why the Numbers Feel So Weird Right Now
It’s a high-stakes game of musical chairs.
By July 2026, we’ll see if this pressure actually works or if it just drives prices up. The administration is even looking at "price floors" for minerals, which is a fancy way of saying the government might guarantee a minimum price to protect new American mining companies from being undercut by cheap Chinese imports.
The Misconceptions Most People Have
Most folks think the trade war is just about "winning" or "losing." It’s way more complicated than that.
- Misconception 1: Tariffs pay for everything. Honestly, no. While they generate revenue, they also act as a tax on the people buying the goods. In 2025, we saw inflation stick around longer than expected because those 60% tariffs had to be paid by someone—usually the consumer.
- Misconception 2: We can completely decouple from China. Total decoupling is basically a myth. Our economies are stitched together like a cheap suit. We can't just rip out the thread without the whole thing falling apart. That’s why the current deal allows "legacy chips" to keep flowing. We need them for our cars and appliances.
- Misconception 3: The trade war is only about money. It’s actually about AI. The real battlefield in 2026 is who controls the algorithms and the hardware they run on. Every time you hear Donald Trump saying China, listen for the subtext: "We cannot let them beat us to AGI (Artificial General Intelligence)."
What to Watch for the Rest of 2026
The next few months are going to be wild. Trump is scheduled to visit China in April. Xi is expected at the G20 in Miami this December.
These meetings aren't just for show. They’re where the "narrow, technical issues" get hammered out. We’re talking about things like "unreliable entity lists" and "antitrust investigations" into U.S. chipmakers.
Actionable Insights for You
If you’re trying to navigate this mess—whether you're an investor, a small business owner, or just someone trying to buy a new car—here is what you need to do:
- Diversify your supply chain now. If you rely on parts from China, the November truce is a "pause," not a "stop." Use this year to find secondary suppliers in Mexico, Vietnam, or India.
- Watch the July deadline. The 180-day window for critical minerals ends in July 2026. Expect market volatility in the tech and EV sectors around that time.
- Hedge against "The TACO Trade." Traders have a nickname for Trump’s style: "Trump Always Chickens Out" (TACO). It sounds mean, but it refers to his tendency to escalate to the brink and then sign a pragmatic deal. Don't panic-sell when the rhetoric gets hot; wait for the summit results.
- Invest in "Home-Shoring." Look for companies benefiting from the "Major Investment Announcements" on the White House website. These are the firms getting the tax breaks and government support to build on U.S. soil.
The era of easy, cheap globalization is over. Donald Trump saying China was the catalyst, but the changes we’re seeing in 2026 are structural. We are moving toward a bipolar world where every purchase is a political statement.
Stay informed by tracking the USTR’s quarterly compliance reports on the Phase One and Korea agreements. These documents are dry, but they tell you exactly where the next tariff hike—or cut—is coming from. Keep an eye on the "Affiliates Rule" suspension, which expires in November 2026; that will be the next major flashpoint for tech companies operating in both regions.