Australia’s trade minister said that global markets will benefit from the phase one agreement despite the possibility for Australian farmers and energy providers to be affected by the deal made. 

Part of the deal agreed between the U.S. and China requires Beijing to make U.S. purchases worth $200 billion over two years – and may happen at the expense of Australian farmers.

Simon Birmingham, Australia’s trade minister, stated, “This is welcome news. Australia has long called for a reduction, a cessation of the trade war between the United States and China – it was hurting global economic growth, and so we welcome the fact that this agreement has been signed,” whilst speaking on radio station 2GB. 

However, he continued to explain that despite both nations took a step forward to end the dispute, it “is a truce rather than a complete elimination of trade tensions between the US and China.” 

The trade relationship between the China and Australia may be affected, as the Asian country must $US50 billion in agricultural products, $US50 billion in energy supplies and $US75 billion in manufacturing products. This would mean that China would have to buy more the U.S. and less from other countries. 

Birmingham added that it is still unclear how the deal would impact Australia, saying, “we can’t say ‘won’t be’ completely, but certainly... this is a deal where … we see more upside than downside because of the confidence that it provides.”

During the previous financial year, Australia’s agriculture exports to China increased by around 30%. 

“The bulk of those purchases [as part of the deal] we would expect to happen as part of China’s growth, rather than substituting existing purposes. We’d expect them to be in areas that Australia is not particularly exposed to.”

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