The pandemic has accelerated the US pushback against China across the military, economic, and communication dimensions to new heights. There are serious risks of a US-China race to the bottom.

The stability that was expected from the signing of the Phase One trade deal is now a distant reality in the wake of COVID-19. The U.S. and China are entangled in blame games and trade disputes, setting the stage for further, more devastating escalation.

The U.S. has long reigned supreme in global finance, but a new challenger to its hegemony has emerged. China’s attempts to lessen its and the world’s dependency on the dollar and especially America’s willingness to abuse its stewardship of the global financial system have influenced a dangerous weaponization of financial networks that promises a rocky road ahead for both countries.

It’s not a question of wanting to follow through but having the ability to do so, given the complex downward pressures brought by coronavirus epidemic.

The trade deal has been signed, but recent factors, like the novel coronavirus, make it challenging for China to meet its trade requirements. Instead of moving forward, the US-China relationship has moved sideways.

The road to trade peace is treacherous, especially since most of the obligations under phase one are one-sided and place China at a disadvantage. But tariffs are becoming less useful as leverage for the United States in the face of Chinese economic resilience.

While the Trump administration has been quick to celebrate the recently-signed Phase One trade deal between the US and China, the deal is not progress for Sino-US relations. Instead, the limited agreement simply secures US affirmation of Chinese plans that were already underway.

While the US-China trade war has reached a milestone with the signing of the Phase One deal, many fear that the negative economic impacts of the original tariffs will go unnoticed.

The Phase One Agreement between China and the U.S. on their trade dispute was signed in Washington, D.C. on 15th January, sealing a temporary truce in their trade war, which had already lasted almost two years. This is a most welcome development, not only for China and the U.S., but also for the rest of the world. It is expected to usher in a period of relative calm and stability as well as reduced uncertainty and unpredictability, which should in turn increase both investment and consumption globally, and result in higher rates of economic growth.