Why phase 1 of the U.S.-China trade deal 'may be doomed from the start'

Despite Washington and Beijing having agreed to an initial framework, it might not be time to breathe a sigh of relief when it comes to the U.S.-China trade war, says the Peterson Institute for International Economics' Chad Brown.

In fact, Brown says the so-called phase one "may be doomed from the start" thanks to "unrealistic" export targets. Brown finds it highly unlikely China will be able to purchase the additional $200 billion (and then some) worth of U.S. exports by 2021, even when working with generous projections.

If China does fall short of expectations, that could spell trouble for international trade. It could imperil other aspects of the agreement and re-ignite trade tensions by way of U.S. retaliation. But it wouldn't only harm the two superpowers. Brown suggests China could try to hit its U.S. numbers by diverting imports from other trade partners, which could potentially make other deals more challenging.

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Other factors could also hamper China's ability to meet the Trump administration's goals, including the U.S. restricting exports on tech products on national security grounds, fallout from previous tariffs, and even the outbreak of African swine fever on China's pig stock, which has reduced the country's demand for key American products like soybeans.

All told, Brown hints that a lot could still go wrong. Read more at the Peterson Institute for International Economics.