President Trump's trade victories mean the White House can now focus all its ire on China

• President Donald Trump has notched progress in multiple trade fights, most recently striking an agreement with Canada and Mexico to replace the existing NAFTA agreement with a new pact.
• That will leave the field open for his administration to more aggressively pursue its ongoing trade war with China

By Sri Jegarajah

No more friends: Chinese dictator Xi Jinping and President Donald Trump.

Using trade deals with Canada, Mexico and South Korea as leverage, Washington looks set to sharpen its hard line trade policy against China and predatory trade practices from Beijing, strategists told CNBC.
Though some experts have said a tariff-impacted slowdown in Chinese economic activity may make Beijing more willing to agree to a deal, many still maintain China won't back down and will respond to further U.S. escalation by raising regulatory obstacles to U.S. businesses operating in the mainland.
The United States and Canada reached a last-minute deal on Sunday to replace the North American Free Trade Agreement with the newly named United States-Mexico-Canada Agreement, preserving a $1.2 trillion trade zone that was on the brink of collapse after nearly a quarter century. 

That followed an earlier deal between U.S. President Donald Trump and South Korean President Moon and the beginning of bilateral trade talks between Washington and Tokyo.
With progress on all those fronts, U.S. Trade Representative Robert Lighthizer can now "turn his total attention to China," said Deborah Elms, Executive Director at the Asian Trade Centre. 

"He wants to tackle China. The rest is a distraction on the way to the real show. Now he is in a much better position to focus on China all day and night long. Given the importance of Lighthizer to U.S. trade policy, this is a worrying trend for China."
That was a sentiment shared by AdMacro strategist Patrick Perrett-Green, who said Washington now can focus all its ire on China.
"The battle lines continue to harden," he added.

The Trump doctrine
The Trump administration's characteristically hard line approach to trade talks is paying off, Elms added, but it isn't guaranteed to work when applied to China.
"The Trump doctrine of bullying your friends and neighbors is working — Korea, Canada, Mexico, Japan and the EU have all given in to a greater or lesser extent," Elms said. 

"But I think China is entirely different because China cares less about what Trump might do."
Unlike what it wanted for the new NAFTA, Washington's demands on China "still seem more opaque — mixed between market access, end to forced technology transfer, reduction in Chinese exports to U.S. and cuts to overcapacity," said Rachel Ziemba, an emerging market analyst and adjunct fellow at think tank the Center for New American Security. 

"It's harder to negotiate when it's less clear what a good deal would look like."

"NAFTA just needed a moderate update. China seems to reflect a more basic superpower tension. Not just tariffs, but also denial of access to Western technology," she said. 

"They are probably too late, but it seems to reflect a growing recognition that the dream of China becoming more prosperous and also more democratic / better member of the international community was naïve. They cannot stop its rise, but they can slow it down."
Tony Nash, CEO and Founder of Complete Intelligence, disagreed, arguing that Lighthizer's success in engineering trade deals with Mexico, Canada and South Korea "bodes well for the U.S.-China discussion."
Nash added: "China is having a fair amount of difficulty in their domestic economy ... so I continue to believe China will come to the table with some significant concessions (although they may be downplayed) this month."
Finalizing a trilateral trade deal between the U.S., Canada and Mexico may also help repair alliances damaged earlier this year by Washington's justification of tariffs on national security grounds, experts said. 

Rebuilding a U.S.-led coalition of trading partners may serve to contain China.
"Assuming it (the USMCA) passes, it allows for focus to shift back to countering China and building a coalition to do so among developed economies, something that was massively deterred by the bitter negotiations with Canada," said Ziemba.
Ziemba predicted that there may eventually be a deal with Beijing, but it won't "be easy or long-lasting" given the extent of complaints and the lack of overwhelming business and congressional support for a deal with China. 

"I think this argues against some grand bargain and suggests that there may be smaller deliverables," she said.

The Necessary War

Anthony Scaramucci, one of President Donald Trump's closest advisers, has told the BBC that the US would win a trade war with China.

By Joe Miller

Anthony Scaramucci: "We will win the trade war with China."

Anthony Scaramucci warned that if China chose to retaliate when the Trump administration imposed tariffs on imports, it would cost them "way more" than it would cost the US.
He added the current trade relationship was "more favourable to China than us".
The comments came just as Xi Jinping warned that no-one would "emerge as a winner in a trade war".
In the first address to the World Economic Forum by a Chinese president, Xi gave a staunch defence of "globalisation" and attacked protectionism.
"Pursuing protectionism is just like locking oneself in a dark room. While wind and rain may be kept outside, so are light and air. No-one will emerge as a winner in a trade war," he told the audience.
"China will keep its door wide open and not close it," he added.

During his election campaign, President Donald Trump floated the idea of a 45% tariff on goods from China.

Mr Scaramucci, who will enter the White House on Friday as a senior adviser to the president, called the relationship with China "asymmetrical", and downplayed the nation's ability to exact revenge on the US.
"What are they going to do, [are] they going to move against our move for fairness?
"That's going to cost them more, way more than it is ever going to cost us, and I think they know that."

Unfair system
Mr Scaramucci, a Goldman Sachs alumnus who spent three decades on Wall Street, insisted Donald Trump is a fan of free trade, and that his policies, including the renegotiation of longstanding trade agreements, do not amount to protectionism.
"If you are running eight or nine hundred billion dollar trade deficits, some of that is based on demand, but some of that is systemic related to the trade deals.
"There's an unfairness in the system," he added. 

"That has borne a deleterious outcome for working-class families and middle-class people that Mr Trump identified."
One of the trade deals the new US president has repeatedly condemned is Nafta, which connects Canada, Mexico, and the United States.
The agreement, which Mr Trump called "the single worst trade deal ever approved [in the US]", fundamentally reshaped North American economic relations, most notably by many car manufacturers moving their plants to Mexico.
This, Mr Scaramucci argued, has led to a "lopsided" relationship.
"We signed Nafta in 1993, and in the 24 years from then you have lost 70,000 factories, and you had every 24 months a reviewal process for Nafta that the US never did, we never went through the reviewal process, never made any changes to potentially create more of an equilibrium in the deal, then we would have an issue, and I think we do."