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CEO Daily: March 8, 2017

April 8, 2017, 1:15 AM UTC

Good morning.

For Trump watchers, this has been a week of surprises. On Wednesday Trump banished Stephen Bannon, mastermind of his campaign victory, from the National Security Council. On Thursday, he ordered air strikes on Syria, reversing his long-standing opposition to entangling the United States in conflicts in the Middle East. But the big stunner came on Friday, when Trump’s much-anticipated face-off with Chinese president Xi Jinping fizzled, ending in warm declarations of good will and mutual respect—and apparently nothing more.

What a let-down! For weeks global pundits had stoked expectations that the world’s two most powerful men would go mano a mano at Mar-a-Lago. Hadn’t Trump had railed against China on the campaign trail for “stealing” American jobs? Hadn’t he vowed to officially label China a currency manipulator on “Day One” of his presidency? Didn’t he promise to slap Chinese imports with 45% tariffs?

In the days ahead of the summit, Trump himself fueled speculation of conflict. He took to Twitter to blame China for America’s “massive trade deficits and job losses,” predicting his meeting with Xi would be a “very difficult one.” His aides told The New York Times the White House was “planning to roll out is first concrete measures on trade” and “hardening its position” on China. In an interview with the Financial Times, Trump warned that if China didn’t to more to pressure North Korea to abandon its nuclear testing program, the U.S. was prepared to take unilateral action.

Many reports suggested Xi, too, was girding for combat. A host of pundits speculated the Chinese president was preparing to outfox Trump with a long list of “tweetable deliverables” — vague but seemingly significant proposals purporting to increase Chinese investment in the U.S.

But as it turned out, the summit was all smiles. At the conclusion of talks Friday, Trump hailed the meeting as having made “tremendous progress” and declared the U.S. – China relationship “outstanding.” He predicted “lots of very potentially bad problems will be going away.”

Xi was similarly upbeat. “We have engaged in deeper understanding, and have built a trust – a preliminary working relationship and friendship,” he said. “I believe we will keep developing in a stable way to form friendly relations.”

The two leaders seemed genuinely at ease with each other. There was none of the awkwardness and personal tension that marred Trump’s meetings with German chancellor Angela Merkel (with whom Trump wouldn’t shake hands), or Australian prime minister Malcolm Turnbill (whom Trump famously lambasted for pressing a “dumb” deal on refugees in their first phone call).

And yet, there were no details, either. No new agreements were announced. There was no indication of any concessions from either side.

What really happened at Mar-a-Lago? We’ll likely learn more in days to come. It’s possible that the two sides reached meaningful agreement on major issues like trade and North Korea and simply chose not to disclose terms. It’s also possible Trump has decided back off on his get-tough China posture altogether. My guess is that Trump and his advisers were so preoccupied with monitoring the situation in Syria that they opted to punt for now on wrangling with China.

If so, it would hardly be the first time that an American promised to put Asia at the forefront of US foreign policy but wound up getting sidetracked by conflict in the Middle East. But the underlying sources of tension aren’t going away–and kicking them down the road won’t make solving problems in the relationship any easier.

This is the first of a series of weekend newsletters focusing on China and its rising significance in the world economy. Fortune will be stepping up its coverage, comment and analysis of China as we approach the Fortune Global Forum, which will be held in Guangzhou Dec 6-9.

Enjoy the weekend!

Clay Chandler
@clay chandler