Let’s talk about the basics of the Trump-Xi meeting.

What does Trump think about the situation?

He’s one of the smartest people who has ever lived and can only be compared to historical predecessors such as Julius Caesar or Alexander the Great.  His perfect intuition means that he has never made a mistake.  He is happy to be meeting with one of his only two peers on the planet—Xi and Putin.  And he has brought a bunch of his underlings (i.e. executives) as symbols of his power.  So he is there to glory in shared power and to bring back something he can tout as an achievement.  Glory is the thing.

What does Xi think?

On both ideological and racial grounds he is meeting with a representative of an old elite that is well past its prime.  Furthermore it is an elite that used its power to despoil China–Xi remembers the Opium Wars and the West’s abiding confidence in racial superiority. As for Trump, he actually started a trade war when the Chinese (with superior planning) held all the cards–i.e. complete control of “rare earth” resources required even for the military.  The Iran war is another sign of undisciplined impulsiveness—wasting enormous resources to achieve more damage than benefit.  So the challenge is how to take advantage of the opportunity. Strategy is the thing.

We can be more specific about objectives.  Trump wants some kind of big splash.  That can mean many things, but Trump’s weak position limits options. He’s not going to get a solution to Iran or a permanent relief from rare earths. One prediction has been a major new commitment of Chinese investment in the US.  That’s what he demanded from Japan and the EU. It’s true those are allies—as opposed to China—but Trump’s strategy document is more positive toward his bros than toward them. That of course fits with Trump’s much-repeated story of all the new foreign-financed factories in the US that will make everyone rich.  On the Chinese side there are two objectives: opening the US market (e.g. for cars) and weakening of US resolve on Taiwan.  Both are useful near-tern and consistent with Xi’s longer-term goal of world economic dominance.

The scary thing is that those US and Chinese objectives could match up!  A big Chinese investment satisfies both—but only one outcome is real.  “Foreign-financed factories will make everyone rich” was always a fairy tale based on the world of the 1950’s.  It’s a mismatch with the world of today and even more so with coming AI and robotics. But Chinese involvement in US markets and technology could be very real.  Competing with the Chinese industrial machine is a challenge at best, and that would give them inside access to US markets and new means to get at US intellectual property.

The Iran war showed that Trump was ready to spend hundreds of billions of dollars and deplete US military inventories, so that he could imagine himself Napoleon.  (He’s given us every other possible explanation as well.) We may be on the verge of surrendering competition to China, so that he can imagine filling the country with 1950’s factories.

We’re so used to normalizing Trump, that we’ve become numb to consequences. This isn’t playacting; it can be real.