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.

The outbreak has added new unknowns to the already uncertain phase-one trade agreement. If it leads to global recession and political unrest, the phase-one trade agreement may not mean much.

The world economy has clearly caught a cold. The outbreak of COVID-19 came at a particularly vulnerable point in the global business cycle. World output expanded by just 2.9% in 2019 – the slowest pace since the 2008-09 global financial crisis and just 0.4 percentage points above the 2.5% threshold typically associated with global recession.

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.

Made-In-China 2025 is China’s controversial agenda that could propel it to be the world’s leading nation in manufacturing. While the plan was formally withdrawn after receiving US backlash, Beijing may still be operating along that plan—just less transparently.

United States stretches reason past the breaking point as it applies pressure to the company. Britain is adopting the technology anyway, while Meng Wanzhou’s rights continue to be violated in Canada.

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.