US-China trade deal could damage some countries’ trade flows – IMF paper

A trade agreement between the US and China will likely be bad news for some economies, as it may have substantial trade diversion effects, an International Monetary Fund paper finds.

Based on the assumption that a deal will include elements of “managed trade”, the research finds that many countries are likely to face export diversion if a deal includes substantial purchases of US vehicles, machinery and electronics by China.

Furthermore, a deal that puts greater emphasis on commodities could