“This was the least difficult part,” Dan Ujczo, a trade lawyer with Dickinson Wright, tells The Washington Post’s David Lynch. “The heavy lift is going to be getting a trade deal through the next Congress in 2019 as well as ratification by Mexico’s new Congress and in Canada during a federal election year.”

AD

AD

One key to the agreement: Canadian Prime Minister Justin Trudeau agreed to allow more American dairy imports, while the Trump team agreed to leave NAFTA’s dispute resolution mechanism untouched — a key Canadian priority.

Meanwhile, the U.S. tariffs on Canadian steel and aluminum will remain in place, but the U.S. will not impose them on most Canadian autos. In return, per The Globe and Mail’s Robert Fife and Adrian Morrow, “Canada would accept a quota system that would place stricter limits on the export of Canadian-made vehicles into the U.S. market.”

Most importantly, the deal “preserves a regional economic unit that enables North American manufacturers, particularly in the auto industry, to compete against global rivals. Canada and Mexico rank first and second among export markets for U.S. companies,” David writes. “Total U.S. trade with the two countries last year topped $1.1 trillion.” (My colleague Heather Long has a closer look at what's in the agreement here.)

AD

AD

Here’s Canadian Prime Minister Justin Trudeau leaving a cabinet meeting Sunday night and declaring the deal a win:

The Trump administration also claimed the agreement as a victory.

President Trump campaigned on the need to overhaul the pact, which he’s regularly characterized as a “disaster” for U.S. workers and businesses. More from David: “Senior administration officials told reporters on a late-night conference call that the deal validated Trump’s approach to trade policy and fulfilled an important campaign promise: to overhaul an agreement he had disparaged as one of the worst trade deals ever made. The new agreement, the officials said, represents a ‘template for the Trump administration playbook for future trade deals’ designed to boost worker earnings and strengthen the American economy.”

AD

AD

Trump heralded the deal in a pair of Monday morning tweets:

Arturo Sarukhan, a former Mexican ambassador to the U.S., cautioned Trump against celebrating too early:

But Trump so far is sharing credit:

The AFL-CIO, whose support will be critical to securing Democratic votes in Congress, reserved judgment. “Our history of witnessing unfair trade deals destroy the lives of working families demands the highest level of scrutiny before receiving our endorsement,” the labor union said in a statement. The Wall Street Journal’s William Mauldin notes that constitutes a friendlier reaction than the immediate opposition the group mustered to the Trans Pacific Partnership:

The response from business groups was more unequivocally positive. The Business Roundtable said it was “encouraged” that the breakthrough maintains the original pact’s “trilateral structure that is critical for North American supply chains.” Jay Timmons, president of the National Association of Manufacturers, made the same point in a statement. “What’s more, as the United States works to put an end to China’s cheating and unfair trade practices, we are better off united with our North American allies,” he said.

AD

AD

Investors are likewise encouraged. From Bloomberg: “U.S. equity futures jumped alongside the currencies of Canada and Mexico as negotiators agreed to preserve a three-way trade bloc. The breakthrough supported equity markets, with European stocks climbing as havens including the yen and gold fell. S&P 500 futures indicated the gauge will add to its advance after finishing the best quarter since 2013.”

TRUMP TRACKER

TRADE FLY-AROUND:

— Trade war hits Chinese economy. WSJ's Liyan Qi and Lingling Wei: “An intensifying trade brawl with the U.S. is starting to take a heavier toll on China’s economy, as weakening foreign demand and sluggish domestic consumption cause Chinese manufacturers to significantly scale back production. The manufacturing slowdown, detailed in reports released Sunday, raises the prospect that China’s leaders will step up economic stimulus measures to prop up growth... Until now, the softening of Chinese growth had largely been due to a domestic debt-control campaign that curbed investments and consumption by companies and individuals alike. But since July, both governments have moved beyond rhetorical trade threats and imposed tariffs on hundreds of billions of dollars in each country’s products.”

AD

AD

JPMorgan: It'll get worse. Bloomberg News's Chris Anstey: “With little prospect of a restart for U.S.-China trade talks, JPMorgan Chase & Co. now expects an escalation in tensions that will see higher American tariffs on all Chinese imports, sending the yuan sliding to its weakest against the dollar in more than a decade. ‘JPMorgan has adopted a new baseline that assumes a U.S.-China endgame involving 25 percent U.S. tariffs on all Chinese goods in 2019,’ JPMorgan strategists including John Normand wrote in a note.”

As China cancels security talks. NYT's Jane Perlez: “China canceled an important annual security meeting planned for mid-October with Defense Secretary Jim Mattis in Beijing, saying a senior Chinese military officer would not be available to meet him, an American official said on Sunday... The cancellation of the dialogue, an event that China until recently had advertised as a productive way for the two sides to talk, showed how quickly the tensions over an escalating trade war have infected other parts of the relationship, particularly vital strategic concerns including Taiwan, arms sales and the South China Sea.”

Branstad blames China. Reuters's Tony Munroe: “A week after an official Chinese newspaper ran a four-page ad in a U.S. daily touting the mutual benefits of U.S.-China trade, the U.S. ambassador to China accused Beijing of using the American press to spread propaganda. ... [Trump] last Wednesday referred to the China Daily’s paid supplement in the Des Moines Register - the state of Iowa’s biggest selling newspaper - after accusing China of seeking to meddle in the Nov. 6 U.S. congressional elections, a charge China denies. ... Terry Branstad, the U.S. ambassador to China and the former longtime governor of Iowa, a major exporter of agricultural goods to China, said Beijing had hurt American workers, farmers and businesses. China, Branstad wrote in an opinion piece in Sunday’s Des Moines Register, ‘is now doubling down on that bullying by running propaganda ads in our own free press.’”

AD

AD

— International bodies ring the alarm. Bloomberg News's Bryce Baschuk: “The World Trade Organization, International Monetary Fund and World Bank on Sunday issued an emergency call to reform the multilateral trading system as the U.S. retreats from prior agreements. ‘The urgent challenge today is to harness the unique strength of the WTO,’ the bodies said in a joint report. ‘The slow pace of reforms since the early 2000s, fundamental changes in a more interconnected modern economy, and the risk of trade policy reversals call for urgency to reinvigorate trade policy reforms.’ ... The joint paper by the Washington-based groups outlined specific initiatives aimed at modernizing WTO rules, including a focus on increased market access for e-commerce, more flexible negotiating structures and better transparency of government trade policies.”

MELTDOWN WATCH:

“Fight over Kavanaugh intensifies amid confusion over limits of FBI sexual assault investigation.” The Post's Mike DeBonis and Josh Dawsey.

“In memo, outside prosecutor argues why she would not bring criminal charges against Kavanaugh.” The Post’s Seung Min Kim.

MARKET MOVERS

— The rally faces new hurdles. WSJ's Corrie Driebusch: “U.S. stocks are entering the fourth quarter near all-time highs even as risks abound, prompting some investors to question how much farther stocks can run after a nine-year rally. Most agree the general economic outlook looks bright, but stocks face a number of obstacles in the next three months: the Federal Reserve is expected to raise interest rates again in December; the U.S. has yet to resolve its trade disputes with China, Canada and other partners; and the coming midterm election cycle is expected to be contentious. ... ‘There are lots of reasons investors are worried,’ said Erik Davidson, chief investment officer for Wells Fargo Private Bank. ‘There are a lot of things that could go wrong, but the risk of things going right is equally as likely.’”

AD

AD

And yet, U.S. stocks widen lead over the world. WSJ: "U.S. stocks are trading at their highest premiums to international shares in years, reflecting bets among investors that the domestic economy will keep powering past its peers around the world. After a tepid first half of the year, the S&P 500 surged 7.2% in the third quarter, its biggest gain since the end of 2013."

— Business economists see recession coming. Bloomberg's Jeff Kearns: "Two-thirds of business economists in the U.S. expect a recession to begin by the end of 2020, while a plurality of respondents say trade policy is the greatest risk to the expansion, according to a new survey. About 10 percent see the next contraction starting in 2019, 56 percent say 2020 and 33 percent said 2021 or later, according to the Aug. 28-Sept. 17 pollof 51 forecasters issued by the National Association for Business Economics on Monday. Forty-one percent said the biggest downside risk was trade policy, followed by 18 percent of respondents citing higher interest rates and the same share saying it would be a substantial stock-market decline or volatility."

— What $100 oil would do. Bloomberg News's Enda Curran and Michelle Jamrisko: “Rising oil prices are prompting forecasts of a return to $100 a barrel for the first time since 2014, creating both winners and losers in the world economy. Exporters of the fuel would enjoy bumper returns, giving a fillip to companies and government coffers. By contrast, consuming nations would bear the cost at the pump, potentially fanning inflation and hurting demand. ... Higher oil prices would hurt household incomes and consumer spending, but the impact would vary. Europe is vulnerable given that many of the region’s countries are oil importers. China is the world’s biggest importer of oil and could expect an uptick in inflation.”

AD

AD

POCKET CHANGE

— Brown signs law promoting women on corporate boards. The Associated Press's Sophia Bollag: “California has become the first state to require publicly traded companies to include women on their boards of directors, one of several laws boosting or protecting women that Gov. Jerry Brown signed Sunday. The measure requires at least one female director on the board of each California-based public corporation by the end of next year. Companies would need up to three female directors by the end of 2021, depending on the number of board seats. ... ‘I don’t minimize the potential flaws that indeed may prove fatal to its ultimate implementation,’ Brown wrote in a signing statement. ‘Nevertheless, recent events in Washington, D.C. — and beyond — make it crystal clear that many are not getting the message.’”

— Musk holds on. WSJ's Tim Higgins, Susan Pulliam and Dave Michaels: “Elon Musk’s removal as chairman of Tesla Inc. potentially weakens his grip, as investors hope a remade board will help the entrepreneur focus on solving production problems that have threatened to stymie the car maker’s move into the mainstream. Mr. Musk’s deal with U.S. securities regulators, a stunning turnaround announced over the weekend, allows him to remain chief executive and keep his board seat—terms that permit the man who has become synonymous with Tesla to retain a considerable degree of power... "

The most noticeable limitation on Mr. Musk could be to his megaphone. Tesla is on the hook to better vet his tweets and other pronouncements that contain information deemed material to the auto maker. Mr. Musk’s prolific use of Twitter is part of his allure, helping him build a persona unlike other CEOs.”

By that standard, Musk probably didn't vet this tweet Monday morning:

MONEY ON THE HILL

— Warren inches toward 2020 run. The Post's Mike DeBonis: "Democratic Sen. Elizabeth Warren of Massachusetts said Saturday that she plans to “take a hard look” at running for president in 2020 after the midterm elections in November, her most explicit acknowledgment yet of her national ambitions. Warren made the statement in response to a question about a possible presidential run at a town hall event in Holyoke, Mass., and she explicitly put her deliberations in the context of the searing drama playing out in Washington around the Supreme Court nomination of Judge Brett M. Kavanaugh.

“'This week, I watched 11 men who were too chicken to ask a woman a single question. I watched as Brett Kavanaugh acted like he was entitled to that position and angry at anyone who would question him. I watched powerful men helping a powerful man make it to an even more powerful position. I watched that, and I thought: Time’s up,' she said, according to a video posted by Warren’s Senate campaign. 'It’s time for women to go to Washington and fix our broken government, and that includes a woman at the top. So here’s what I promise: After Nov. 6, I will take a hard look at running for president.'"

— Dems tap small donors to keep pace with GOP. Politico's Elena Schneider: "Hundreds of thousands of online donors are pouring gobs of cash into Democratic House campaigns at an accelerating clip — a bulwark against a late-summer advertising assault that Republicans hope could save their majority. Republicans have long seen their outside-money advantage as a key factor in the battle for the House, with Congressional Leadership Fund pledging to spend a massive $100 million in 2018. The super PAC’s plan is to attack Democrats early and often, and it unleashed a salvo of TV attack ads in 15 districts before Labor Day, seeking to disqualify Democrats before the fall campaign even heated up. But the gush of online money to Democratic candidates has allowed them to hit the airwaves themselves earlier than ever, blunting the GOP’s game plan. Democrats in nearly 20 districts aired TV ads first to define themselves before facing GOP attacks."

THE REGULATORS

— Facebook could face huge fine. WSJ's Sam Schechner: “A European Union privacy watchdog could fine Facebook Inc. as much as $1.63 billion for a data breach announced Friday in which hackers compromised the accounts of more than 50 million users, if regulators find the company violated the bloc’s strict new privacy law. Ireland’s Data Protection Commission, which is Facebook’s lead privacy regulator in Europe, said Saturday that it has demanded more information from the company about the nature and scale of the breach, including which EU residents might be affected. ... It marks one of the first significant tests of how regulators will apply the breach-notification and data-security provisions of the new European law, dubbed the General Data Protection Regulation, that went into effect earlier this year. It might also be a sign that the law’s threat of massive fines are already changing how firms handle big breaches—forcing them to disclose them faster and more publicly than before.”

DAYBOOK

Coming soon

THE FUNNIES

From The Post's Tom Toles: “Our hothead struts and frets his hour on the world stage.”

BULL SESSION

Devastating earthquake and tsunami kill at least 800 in Indonesia:

Trump on Kim Jong Un: “We fell in love.”