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Larry Kudlow speaking with Mike Allen at an Axios event. Photo: Chuck Kennedy/Axios

Larry Kudlow says the president doesn't want a trade war with China, adding that Trump is a free trader.

The big picture: "There's a little bit of a bromance" between Chinese President Xi Jinping and Trump, Kudlow told Axios' Mike Allen on Tuesday. "Bromances are always good."

Why it matters: "Everyone around the world agrees with the president that China's unfair and often illegal trade practices have to be changed... I call it a trade coalition of the willing."

Yes, but: Trump alienated key U.S. allies who want to fight China, pulling the U.S. out of the Trans-Pacific trade partnership and criticizing EU allies, like Germany, on trade.

"[Trump] doesn't want a trade war. I don't want a trade war."
— Kudlow to Axios' Mike Allen

Another big thing: Kudlow handicapped the odds for NAFTA optimism as 51-49. "That's not great for Kudlow optimism," he admitted.

Kudlow on China:
  • "I think the time is right for China to make changes they should have been making for the past 15-20 years."
  • "The president has said to me many times... he is a free trader. But... he knows you can't have free trade if you... have all these unfair trade practices."
  • On the U.S.-China trade deficit: Kudlow clearly doesn’t think there’s any chance of reducing the trade deficit with China unless we force major structural changes in their economy and industrial practices, Axios' Jonathan Swan emails.
    • Between the lines: The idea — which appeals to Trump — of getting the Chinese to buy billions in U.S. products is not one that will reduce the bilateral trade deficit over time. He also made clear where he disagrees with Trump. For Trump the trade deficit with any given country is the key metric — and the one he brings up in every conversation with foreign leaders. Kudlow says it’s not his favorite metric.
  • On ZTE: "It's a very poorly run company. It has many internal flaws. This is principally an enforcement issue. They have been proven guilty not once not twice but three times."
    • Kudlow acknowledged that Trump blends economic negotiations with national security and that everything is up for negotiation. (This way of thinking has concerned many national security experts and China hawks, including Republican Sen. Marco Rubio.)
Kudlow on the GOP tax cuts:
  • "I think people will be happier, more optimistic."
  • "This particular tax reform plan will impact business investment specifically."
  • "I also wanna know my friends at the CBO have re-estimated huge amounts... 476 billion higher corporate tax receipts."

One fun thing: "They won't let me use my Twitter anymore... I can tweet on the government account. It's just not as fun."

Go deeper

Biden will reverse Trump's attempt to lift COVID related travel restrictions

Photo: Tasos Katopodis via Getty

The incoming Biden administration will reverse President Trump's last-minute order to lift COVID-19 related travel restrictions, Jen Psaki, the incoming White House press secretary, tweeted.

Why it matters: President Trump ordered entry bans lifted for travelers from the U.K., Ireland, Brazil and much of Europe to go into effect Jan. 26, but the Biden administration will "strengthen public health measures around international travel in order to further mitigate the spread of COVID-19," Jen Psaki said. Biden will be inaugurated on Wednesday, Jan. 20 and Trump will no longer be president by the time the order is set to go into effect.

Dominion sends cease and desist letter to My Pillow CEO Mike Lindell

Photo: Stephen Maturen/Getty Images

Dominion Voting Systems on Monday sent a cease and desist letter to My Pillow CEO Mike Lindell over his spread of misinformation related to the 2020 election.

Why it matters: Trump and several of his allies have pushed false conspiracy theories about the company, leading Dominion to take legal action. It's suing pro-Trump lawyer Sidney Powell for defamation and $1.3 billion in damages, and a Dominion employee has sued Trump himself, OANN and Newsmax.

Off the Rails

Episode 5: The secret CIA plan

Photo illustration: Aïda Amer, Sarah Grillo/Axios. Photo: Zach Gibson/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 5: Trump vs. Gina — The president becomes increasingly rash and devises a plan to tamper with the nation's intelligence command.

In his final weeks in office, after losing the election to Joe Biden, President Donald Trump embarked on a vengeful exit strategy that included a hasty and ill-thought-out plan to jam up CIA Director Gina Haspel by firing her top deputy and replacing him with a protege of Republican Congressman Devin Nunes.

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