Source: POLTICO'S MORNING AGRICULTURE, 10/3/18

White House economic adviser Larry Kudlow is using the new North American trade deal to try to lure China back to the bargaining table — and to flex the Trump administration’s bolstered negotiating strength. The National Economic Council director said Tuesday that the Trump administration is still open to “serious” discussions with the Chinese government aimed at easing trade tensions, potentially on the sidelines of the G-20 meeting starting Nov. 30 in Buenos Aires, Pro Trade’s Megan Casella reports.

Kudlow also claimed that the new trade deal with Canada and Mexico gives the U.S. new leverage in the dispute with China.
“The continent as a whole now stands united against what I’m going to call unfair trading practices by you know who — it starts with a C and ends with an A,” he told reporters on Tuesday, as Pro Trade’s Adam Behsudi reports here.

That unity isn’t just symbolic — if the new three-way trade pact is enacted, it also would be statutory. The new U.S.-Canada-Mexico agreement contains a provision that effectively enables a country to be booted from the trade pact if it enters into a trade deal with a “nonmarket economy” — i.e. China. The language also requires that the country provide the others with three months’ notice before entering into negotiations with China or a similar economy.

The language has President Donald Trump’s fingerprints all over it, as Adam and Pro Canada’s Luiza Ch. Savage, Alexander Panetta and Lauren Gardner write. The anti-China provisions are effectively a loyalty oath — a Trump-inspired way of keeping the North American neighbors from working out any side deals with adversaries.

Speaking of Trump’s trade policy: Check out this ballad of Robert Lighthizer from our POLITICO Europe colleagues. The U.S. Trade Representative and his team of loyalists have a battle plan to smash China, Pro Europe’s Jacob Hanke writes, and they’ve passed the point of no return in their efforts to implement it.

The strategy is a one-two punch: Impose duties to pressure U.S. companies to move manufacturing out of China — then, once American businesses are out of the line of fire, unload the full fury of tariffs on the Chinese economy.

In case farmers forgot: The two economic rivals unloaded the latest round of tariffs in last month. The U.S. slapped duties on an additional $200 billion in Chinese goods, and China retaliated with new tariffs on $60 billion in U.S. exports. Trump has threatened even more duties on another $267 billion worth of imports from China.

Keep an eye on this: Our Pro Trade colleagues point out that Vice President Mike Pence will give a “major speech” Thursday on the Trump administration’s China policy. The setting will be the conservative Hudson Institute.