Trump's grand bargain on China

Between the lines: Senior Treasury and National Economic Council officials — including Mnuchin and Larry Kudlow, who recently returned from Beijing — are optimistic that Trump may cut a deal with China in the coming weeks.

Sources familiar with Mnuchin’s thinking tell me he wants a deal that would have the Chinese buy billions of dollars worth of U.S. products. The idea would be to cut the trade deficit — something Trump is obsessed with — but trade experts say that purchasing products isn’t the way to deal with profound structural imbalances.

In exchange, the U.S. would drop the section 301 tariffs designed to stop China from stealing American intellectual property and getting its hands on U.S. technology for nefarious purposes.