In a shocking announcement after his talks with Chinese President Xi Jinping, Mr. Duterte told a meeting of Chinese and Philipino business people on Thursday that "I announce my separation from the United States".
Duterte made his comments in China, where he is visiting with at least 200 business people to pave the way for what he calls a new commercial alliance as relations with longtime ally the United States deteriorate.
His trade secretary, Ramon Lopez, said $13.5 billion in deals would be signed during the China trip.
"Our relationship on the economic side is very strong so we need further clarification on that", he told the GMA Network's morning show Unang Hirit.
If this visit to China will be the defining moment of Duterte's presidency, he may not like the definition.
Manila has also always been a key ally in the US' rebalance to Asia strategy to counter China's rise in the region.
"I hope we can follow the wishes of the people and use this visit as an opportunity to push China-Philippines relations back on a friendly footing and fully improve things", Xi told Duterte at the Great Hall of People.
Since being swept into power at May elections pledging to wipe out illegal drugs and crime within months, 71-year-old Mr Duterte has launched tirades against the U.S., including referring to Barack Obama as the "son of a whore" after the U.S. expressed concern about reports of extra-judicial killings across the country.
President Obama has said a ruling by an worldwide tribunal in July that China can't legally claim ownership of 90% of the South China Sea was "binding" and "helped to clarify maritime rights in the region".
A Japanese Embassy official in Manila said Japan was keen to hear Duterte's explanation about his new foreign policy when he pays a three-day visit to Japan starting on Tuesday.
"Both sides agreed that the South China Sea issue is not the sum total of the bilateral relationship", Liu said.
Earlier this month, he took the first concrete action in that direction by notifying the us military that plans for joint patrols and naval exercises in the South China Sea are being put on hold.
"If relations with the USA completely break down that would be a cause for concern, since there is a lot of US investment in the Philippines", Williams said.
He said other "partners in the region" were also baffled by Mr Duterte's rhetoric. China's lifting of a trade ban against bananas from the Philippines bodes well for aviation.
Philippines Foreign Affairs Secretary Perfecto Yasay Jr. was earlier quoted by the Inquirer as saying that the comments meant "separation from the economic and defense dependence of the past".
During his time in office Barack Obama has made much of swinging USA foreign policy towards Asia but during a visit to Beijing Rodrigo Duterte denounced America without reservation.
Duterte has walked a tightrope in trying to mend damaged relations with China while defending his country's claims in the South China Sea.
And then in an echo of a previous comment, he once again referred to U.S. President Barack Obama as a "son of a whore".
The change of heart for both the Philippines and China has come quickly.
The US had long considered its relations with the Philippines as one of its most stable in Southeast Asia.