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Should the Trump-Xi Summit Worry American Businesses?

President Trump promised last week his meeting with China President Xi Jinping beginning tomorrow “will be a very difficult one.”

But if it goes according to the White House’s plan, two issues that Trump frequently mentions and that unnerve businesses in both countries—China being labeled a currency manipulator, or a punitive 45% tariffs being slapped on Chinese goods—won’t even come up. Instead, White House officials are describing the meeting as a way to exchange initial views and priorities, and one unlikely to raise public tensions.

President Trump said this weekend in an interview with the Financial Times that the issue of potential tariffs against Chinese imports would be left for another meeting.

And talk of China’s currency manipulation, an issue Trump has raised for years, also won’t come up, according to a senior administration official who spoke with reporters yesterday.

Some analysts suggest the Trump-Xi meeting may be too rushed to allow for detailed negotiations. It is the fastest scheduled gathering between U.S. and Chinese leaders, save a couple non-notable instances, since China opened to the West in the late 1970s. Trump’s U.S. Trade Representative, Robert Lighthizer, and the U.S. Ambassador to China, Terry Branstad, remain unconfirmed by Congress, and Trump’s overall China policy remains unpredictable.

“I think that suggests that we shouldn’t over-expect what’s going to happen, particularly on economic issues, in terms of outcomes,” Scott Kennedy, deputy director of China studies at the Center for Strategic and International Studies, said on Monday.

Twenty four hours of meetings between President Trump and China President Xi Jinping begin tomorrow at Trump’s Mar-a-Lago resort in Palm Beach. The subdued tone from the Trump side reflects a marked change in its China policy and one that will shape discussions in his private club. Both the U.S. and Chinese sides started aggressively in their negotiations with each other, and both have since pulled back.

Trump campaigned against allowing “China to rape our country.” He then called it one of the “grand champions” of currency manipulation, threatened 45% tariffs on Chinese goods, and questioned the long-standing “One China” policy, related to Taiwan, in an apparent negotiating tactic.

But in the past couple months, he has swung hard in the other direction, appearing to appease China. He formally withdrew the U.S. from Trans-Pacific Partnership, much to China’s delight, and reversed his take on “One China,” at the request of President Xi himself, the White House said.

The Chinese, meanwhile, have also changed their tack. The first Chinese representative to meet with advisors and family members of the newly elected President Trump was Yang Jiechi, a member of the ruling State Council. He struck an aggressive tone, according to reports.

When that turned out to be ineffective, the Chinese used a new messenger, Chinese ambassador to the U.S. Cui Tiankai, and cranked up the charm offensive. The ambassador has reportedly built a backdoor to the President through Jared Kushner. And after Trump’s reversal on his One-China Policy and Secretary of State Rex Tillerson’s visit with Xi Jinping, during which he repeated phrases including “non-confrontation, mutual respect, and win-win cooperation,” which are used by Xi, China is feeling confident.

Even if Trump wants to press Xi on more economic topics, the antics of North Korea may interrupt.

North Korea fired what experts said appeared to be a medium-range ballistic missile into the Sea of Japan today. The White House said North Korea is an urgent matter and will be a key topic between Trump and Xi.

Xi and Trump will lay out their positions on trade and investment and may even resolve some issues in Florida this week, predicted the senior administration official, who said the big agreements would be discussed in weeks and months ahead.