11/15/18

Understanding Donald Trump's intentions has bedevilled China since he took office. So it continued this week when the American president made comments that could signal a big escalation in the two countries' trade war-or that a resolution is near.

I think we'll make a great deal with China, he told Fox News in an interview. But, he added, if talks sputter, America will impose tariffs on all goods from China.

Having already hit $250bn-worth of annual Chinese imports with tariffs, America could target the remaining $267bn. A bilateral meeting between Mr Trump and Xi Jinping, China's president,

later this month at a G20 summit in Buenos Aires should determine which outcome is more likely. First, though, Mr Xi will be pressing China's case in the court of global opinion.

On November 5th he will open a huge trade show in Shanghai designed to demonstrate to the world that China's prosperity benefits all. Chinese trade shows have traditionally focused on helping its exporters to attract foreign customers.

The inaugural China International Import Expo will instead aim to help foreign companies entice Chinese buyers. Mr Xi, as well as innumerable Chinese officials and business leaders, will proclaim that China does not seek a trade surplus.

Yet the expo is also bound to highlight some of the tensions ratcheted up by the trade war. The main complaint of the American administration (Mr Trump apart) is not that China runs a trade surplus but that it discriminates against foreign firms,

for example by pressing them to hand over technology to enter its market. Though many countries are sending official delegations and hosting national pavilions, America's government will be conspicuous by its absence.

In private, its officials say that the trade show will be little use-and that they do not want to be dragged into Chinese propaganda. At least publicly, foreign companies are more enthusiastic.

A large contingent of American bosses will show up, hoping to set their companies apart from the trade hostilities. In all some 2,800 firms will attend, from more than 130 countries.