Illustration: Sam Jayne/Axios

President Trump wants a grand bargain with China. And hardliners in the Trump administration worry Treasury Secretary Steven Mnuchin is leading him down an accommodationist path that — in their minds — would betray the President's economic agenda and capitulate to Beijing.

The intrigue: Trump inflamed those internal fears today with this tweet that signaled he's willing to give away significant things for a deal: "President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!"

Why it matters: Trump campaigned on an aggressive anti-China, economic nationalist platform. But his most bellicose threats — which include tariffs on $150 billion worth of Chinese products — may never eventuate, as his chief economic advisor Larry Kudlow signaled when he took over from Gary Cohn. (I originally wrote to take Kudlow's assurances with a grain of salt. But they've aged better than my expectation of a trade war.)

  • Trump is making a potentially stunning concession with ZTE. The Chinese telecommunications giant is fighting for its life. It’s been sanctioned for doing business with Iran and North Korea, and the U.S. Commerce Department banned American companies from selling it their products.

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.

What's next: Vice Premier Liu He, who has been leading China's trade talks with the Trump administration, plans to visit Washington this week or next. His team has been in town the past two days preparing for the meeting.

  • The administration hasn't planned for Liu He to meet with President Trump, but two sources familiar with the talks speculate that Trump may not be able to help himself — he'll likely want to take over the negotiations and meet with Liu He in the Oval.

Go deeper

Trump's Tucker mind-meld

Photo illustration: Sarah Grillo/Axios. Photo: Roy Rochlin/Getty Images and BRENDAN SMIALOWSKI/AFP via Getty Images

If you want to understand the rhetorical roots of Trump's Independence Day speech at Mount Rushmore, go back and watch Tucker Carlson's monologues for the past six weeks.

Between the lines: Trump — or rather his speechwriter Stephen Miller — framed the president's opposition to the Black Lives Matter protest movement using the same imagery Carlson has been laying out night after night on Fox.

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Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 6 p.m. ET: 11,366,145 — Total deaths: 532,644 — Total recoveries — 6,154,138Map.
  2. U.S.: Total confirmed cases as of 6 p.m. ET: 2,874,396 — Total deaths: 129,870 — Total recoveries: 906,763 — Total tested: 35,512,916Map.
  3. States: Photos of America's pandemic July 4 ICU beds in Arizona hot spot near capacity — Houston mayor warns about hospitals
  4. Public health: U.S. coronavirus infections hit record highs for 3 straight days.
  5. Politics: Former Trump official Tom Bossert says face masks “are not enough”
  6. World: Mexican leaders call for tighter border control as infections rise in U.S.
  7. Sports: Sports return stalked by coronavirus
  8. 1 📽 thing: Drive-in movie theaters are making a comeback.

Bolton's hidden aftershocks

Photo illustration: Sarah Grillo/Axios. Photo: Justin Sullivan/Getty Images

The news media has largely moved on, but foreign government officials remain fixated on John Bolton's memoir, "The Room Where It Happened."

Why it matters: Bolton's detailed inside-the-Oval revelations have raised the blood pressure of allies who were already stressed about President Trump's unreliability.