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"China is our natural trading partner in this world," he told FOX Business' Cheryl Casone.
Laffer said this deal is the “first step” toward a great relationship with China.
“If there were ever two countries that could get the gains from trade, it's the United States and China,” he said.
Laffer said China, the U.S. and "the rest of the world" will all benefit from this trade deal.
"It's a win-win for everyone," Laffer said.
A delegation led by Liu He, China’s vice premier and chief trade negotiator, arrived in Washington on Monday and is scheduled to stay until the phase one trade agreement is signed Wednesday.
Stocks opened near record highs Monday as investors look ahead to the signing of the deal.
Fox Business’ Jonathan Garber contributed to this report.