Source: POLITICO'S MORNING AGRICULTURE 5/15/18

The Trump administration is angling to strike a deal with China that would see Beijing drop tariffs on billions of dollars of U.S. agricultural products in exchange for the U.S. backing down on penalties imposed against Chinese telecom firm ZTE. President Donald Trump signaled on Sunday that he would help ZTE "get back into business, fast" less than a month after the Commerce Department announced a harsh penalty on the company for lying about violating U.S. sanctions.

Art of the deal: The U.S. could backpedal on its decision to bar U.S. companies from doing business with ZTE and exporting materials to the firm for up to seven years. In return, China would agree to drop tariffs it imposed on U.S. agricultural products as retaliation for U.S. tariffs on steel and aluminum imports, The Wall Street Journal reported. Last month, China — the No. 2 purchaser of U.S. farm goods — raised tariffs on $3 billion worth of American products, including pork, nuts, fresh and dried fruits, and wine.

However, some hardliners in the administration are strongly opposed to a potential deal, arguing that China can't be trusted to follow through and worrying privately that the president is being swindled by more moderate aides who opposed his aggressive approach to Beijing.

What's next? Chinese and U.S. officials will meet in Washington today through Saturday to continue high-level trade talks. The Trump administration is working to protect the agricultural industry — and the sector has already been "featured quite prominently" in trade discussions with Beijing, Commerce Secretary Wilbur Ross said during a Senate hearing last week.

Who's calling the shots? Ross has been largely sidelined in trade talks with China, in the latest signal that Trump is losing confidence in his Commerce secretary, POLITICO's Doug Palmer and Andrew Restuccia report.

That has left Trump to place increasing reliance on Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and White House trade adviser Peter Navarro — who have varying opinions on how the administration should counter Beijing's trade practices.