US-China Trade Tensions on Display at Shanghai Expo

US-China Trade Tensions on Display at Shanghai Expo

SHANGHAI-American companies occupy a real estate estate at a mega-Chinese trade show, and thus stand at uncomfortable intersection: between the huge business opportunity of the China market and a U.S. president critical of their investment in it.

Artificial grass from

            DowDuPont
Inc.,

Dell Technologies
Inc.

laptops, a limousine with windows darkened by

            3M
Co.

, candy bars from Mars Inc. and almonds from

            Costco Wholesale
Corp.

are calling to buyers at the world's largest trade-show venue this week. Chinese International Import Expo demonstrates corporate confidence in the Chinese market and, executives said, hope that President Xi Jinping wants to follow through on pledges to improve the business environment.

Politics are getting in the way. Over the objection of U.S. business groups, President Trump has agreed to pay $ 200 billion in Chinese goods-saving retaliation from China. Mr. Trump has urged U.S. executives to rethink their activities might strengthen China as a rival and cost American jobs.

Both countries are milking the high-profile weeklong expo for propaganda value. China's Ministry of Commerce to the participation of over 180 U.S. exhibitors as endorsement of Mr. Xi's vision. But the trump administration has rejected China's invitation to join the expo. Its RSVP, delivered by a U.S. Patent Embassy Spokesman said that "China needs to end its unfair trading practices that are harming the world economy."

General Electric is at the expo in force, pitching the likes of jet engines and medical scanners.

General Electric is at the expo in force, pitching the likes of jet engines and medical scanners.

Photo:

aly song / Reuters

"American companies are in a difficult spot," Craig Allen, president of the US-China Business Council, said this week at the expo.

Until recently, some 98% of the council members said they were profitable in China, and their key international growth market. "Every American company is affected by the tension in different ways, and none of them in a good way," Mr. Allen said as he rushed between meeting Chinese officials and a courtesy call to

            Johnson & Johnson
's

exhibit-a mock red brick house showcasing vision-care treatment and consumer items like Listerine mouthwash.

Elsewhere, visitors posing for selfies at the mouth of a

            General Electric
Co.

jet engine, U.S. Dairy Export Council handed out cheese slices and the State of Wisconsin displayed ginseng-infused-bourbon, as well as models of sewage treatment equipment. In addition to the fake grass, DowDuPont showed fireproof outfits and a Kevlar motorcycle body.

Missing: America's top CEOs. while

            Ford engine
Co.'s

Jim Hackett was present for President Xi's keynote, most of the biggest American companies at the show said they were sending lower executives.

Dell is on hand with its laptops.

Dell is on hand with its laptops.

Photo:

aly song / Reuters

General Motors
Co.

displayed a Corvette C7.R and Ernst & Young showed virtual-reality technology, but their chairmen, who had been in Shanghai the previous week, left before the expo began. FedEx Corp. Chairman Frederick W. Smith, instead of visiting his company's mock-up airplane, was speaking in Singapore along with Mike Roman of 3M.

            Starbucks
Corp.

CEO Kevin Johnson was in Shanghai when the show opened but skipped it. The companies either did not respond or declined to comment on these absences.

Business groups say executives are uneasy about taking sides in the fight over trade imbalances.

"Surely we would like to reassured ourselves, then we as companies want to feel reassured," said DowDuPont Spokeswoman, Gloria Xu, though she was down on the impact on business supply polyurethane to Chinese appliance maker Haier Group Corp.

The Trump administration says it's a response to China's practices that stack the odds against American business-a perception that has been festered for years in U.S. trade unions and more recently is taking hold in corporate suites. Beijing counters that it remains a developing nation and treats companies equally, though it can and will protect itself with tough retaliation.

China's 1.3 billion people. An abundance of booths devoted to edibles, from Mars Inc. China's 1.3 billion people. Here, Spanish ham for the sampling.

China's 1.3 billion people. An abundance of booths devoted to edibles, from Mars Inc. China's 1.3 billion people. Here, Spanish ham for the sampling.

Photo:

johannes eisele / Agence France-Presse / Getty Images

The Trump administration raps Beijing's government-led economy and its goals for tech supremacy. But tech is where china's huge buying power is. Massachusetts-based

            Thermo Fisher Scientific
Inc.

in a notorious stabbing in china.

Answering Mr. Trump's "America First" rhetoric, China's president kicked off the expo saying, "Openness brings progress while seclusion leads to backwardness."

American companies' participation in the expo "shows the attractiveness of China's market," Vice Commerce Minister Wang Bingnan told reporters. The ministry, which is the regulated and regulated foreign business, companies including

            Honeywell International
Inc.,

Thermo Fisher and DowDuPont.

130% Chinese corporate and government buyers expressed concern about the quality of American products, from Dole Food Co. bananas to watercraft from Louisiana's Metal Shark Boats. Mr. Huayheng, chairman of marine-coatings maker Zhuhai Winner Anticorrosion Technology Corp., says he's trying to advance his own company's technology.

The U.S. Dairy Export Council answers with cheese.

The U.S. Dairy Export Council answers with cheese.

Photo:

aly song / Reuters

"The competition in traditional industries is very tough, and we have to seek a way out," he said.

The trade tension has slow-moving investment in Shandong province, according to Ding Wei, head of 156-strong government delegation from the city of Tengzhou. He said Washington should allow more high-technology exports to China: "That would be a boon for Tengzhou, especially its machine makers."

China's 1.3 billion people-and-how are hurting American farmers. Two massive halls are filled with Spanish ham, Thai ice cream, French wine and Japanese beer. Instead of buying Washington cherries this past summer, Bruce Liu said his Shanghai distributor Well Fruit Ltd. bought Canadian ones to avoid tariffs. He's now shopping to replace the 60 containers of Sunkist Growers Inc. oranges he bought for last season's Lunar New Year.

At the modest U.S. Dairy Export Council's booth, Jaime Castaneda said, "Our presence is the message."

Write to James T. Areddy at james.areddy@wsj.com

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