By Alan Murray and David Meyer
October 10, 2018

Good morning.

If there was one sentence that bound together the Canadian officials and Japanese executives at the Canadian ambassador’s residence in Tokyo on Tuesday night, it was this: “We are not the targets.” For all the bullying and bluster of President Donald Trump’s trade broadsides, it’s now clear that his real aim is elsewhere. Ally-bashing and auto tariffs are a side show. Changing the U.S. relationship with China is the main event. If you missed Walter Russell Mead’s piece in Monday’s Wall Street Journal, it’s worth reading now. He calls it “Cold War II.”

For the moment, that campaign is clearly hurting China more than the U.S.—giving temporary credence to the president’s view that trade wars can be won. China began the week scrambling to inject liquidity into a slowing economy, but that led its currency to plummet, forcing countermeasures to limit the outflow of capital. Alibaba chief Jack Ma said this morning the U.S. will suffer more in the long run.

I’m at ground zero, in Guangzhou today, where we are preparing for our second Fortune Global Tech Forum, which is being held November 29 and 30. Details here. News below.

And by the way, apologies to Canadian Finance Minister Bill Morneau for the “n” that went missing from his name in yesterday’s newsletter.

Alan Murray
@alansmurray
alan.murray@fortune.com

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