If investors are expecting traditional diplomacy to be on display when Donald Trump makes his first trip to China as president, they just haven't been paying attention. The president doesn't court world leaders with statecraft as much as stir up controversy.
The centerpiece of his 12-day Asia trip will be in China where he will meet with China President Xi Jingping in the week ahead. It will be their first meeting since the two sat down at Trump's Mar-a-Lago estate. Over chocolate cake, the American president informed his Chinese counterpart he OK'd air strikes against Syria.
Xi will do than offer sweet desserts for Trump. Expect Xi to impress Trump with the all the pomp, precision and pageant he can muster as the de facto dictator of the world's second largest economy. Just three weeks ago in a highly scripted spectacle, Xi declared a "new era" of Chinese politics and said it was time for China to make itself into "a mighty force."
Trump is anything but highly scripted. An errant tweet can cost shareholders millions. He has bragged to foreign leaders about his election, broken well-worn measures of protocol and made personal confrontation part of his international relations playbook.
All of that may play with his political base at home, but not necessarily with an economic competitor and colleague. Trump has linked China's exports to the U.S. (its biggest market) to its role in dealing with a nuclear empowered North Korea (its neighbor). China has resisted and has leverage of its own. It is the largest foreign owner of U.S. federal government debt. And Trump may need that buyer if the Republican tax reform plan moves forward. It is expected to add $1.5 trillion in debt over a decade if approved. ___
