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US President Donald Trump signed a ‘phase one’ trade agreement with China, last month, denoting a significant move in attempts to reduce a more than 18-month trade confrontation between the two nations, and also providing Trump with political bragging rights.

The president’s approach may pay off politically as a boost for Trump in an election year. The first phase of the trade agreement is expected to open Chinese markets to more American firms, enhance energy and farm exports and provide significant protection for American technology. However, the agreement will go far beyond China, impacting nations that deal with China.

Whatever China promises to purchase from the United States will obviously happen at the expense of other exporting nations. For example, in the field of farm produces and supplies, Canada is at risk of losing and weakening market share, along with Brazil, New Zealand and Australia.

Many Asian nations such as India that do not export large amounts of farm products and manufacturing goods to China, will be less impacted by the US-China Phase 1 Agreement.

By and large, the trade deal has more extensive consequences for the prospect of world economic stability, where time-honoured guidelines and policies have ruled out these types of specific, customized special deals and agreements that do good to two nations at the disadvantage of other nations. And, from this perspective, it appears that the United States under President Trump is retrenching from global participation, and, henceforth, may not be considered by many governments and leaderships as a reliable global partner.

The recent spread of the coronavirus calls into question with the US or China will benefit from the newly finalized Phase 1 trade deal. To date, the virus has infected more than 70,000 people in China and killed more than 1,800, triggering disruptions in the supply and demand for Chinese goods and services. Therefore, it has become harder than anticipated to predetermine the business outcomes of the US-China ‘phase one’ trade deal.

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