Donald Trump has touted his new trade deal with Beijing as a winner for both countries, but experts warn Australia stands to lose from the arrangement.

The agreement follows a two-year trade war between the two countries that dragged down global growth.

The US President has claimed a major victory from the new deal, saying it’s a “momentous step” towards achieving “free, fair and reciprocal” trade with China.

But the deal may have an adverse effect on Australian trade.

President Trump: "We have a great relationship with China and the leader of China. And China understands that there has to be a certain reciprocity. There has to be. It cannot continue like this. It would be dangerous for it to continue like it was." pic.twitter.com/z62sSkCI49 — The Hill (@thehill) January 15, 2020

WHAT WAS IN THE DEAL?

China has committed to buying $US200 billion ($A290 billion) worth of extra goods from the US over the next two years as part of the “Phase One” agreement.

“Today we take a momentous step, one that has never been taken before with China, towards a future of fair and reciprocal trade,” Mr Trump said shortly ­before signing the agreement with Chinese Vice-Premier Liu He at the White House.

“Together we are righting the wrongs of the past and delivering a future of economic justice and security … most people thought this could never happen,” he said.

He said the deal was a “sea change in international trade’’.

The deal also required China to remove its unfair trade practices.

In exchange for all this, the US agreed to cancel the new tariffs of $US156 billion it had planned to impose on Chinese goods.

It also cut in half the 15 per cent tariff on $US120 billion of Chinese goods imposed in September.

The deal still leaves around $US360 billion in tariffs on Chinese imports to the US.

HOW THE DEAL WILL AFFECT AUSTRALIA

The deal will come as a relief for international observers who have been concerned about the escalating tariff wars between the two major countries these past two years.

But it’s a problem for businesses in other smaller countries that compete with US businesses, particularly in agriculture and energy.

Australia is one of the countries that stands to be affected. Beijing has agreed to buy $US50 billion ($A72.5 billion) in agricultural products, $US75 billion ($A109 billion) in manufacturing products and $US50 billion ($A72.5 billion) in energy supplies over the next two years.

That means China will potentially reduce such purchases from Australia, which could hit our farmers, as well as our liquid natural gas and coal.

“The implication of a trade deal between two big economies is that smaller economies such as Australia will likely lose out,” said Yun Jiang, co-editor of China Neican. “There is an extensive list of what China has agreed to in terms of giving market ­access to US businesses and products which covers dairy and ­infant formula, poultry, beef and pork and aquatic products.

“It appears unlikely the same treatment will be extended to products from other countries given the clauses specifically apply to US regulators,’’ she said.

“As Australia also exports beef and dairy including infant formula to China, it may be ­adversely affected by this deal.”

Trade Senator Simon Birmingham said that, while there are concerns for Australia’s resource exports, he expects the bulk of the extra purchases of US goods from China to be in areas that do not affect Australia.

“Where we are exposed, in areas such as our wine industry for example, we will still enjoy a 14 per cent tariff differential relative to the United States,” he told 2GB radio yesterday.

“In relation to beef, a tariff differential of more than 7 per cent.”

He said Australian gas producers remain in a strong position because of long-term contracts that have already been locked in.

“I think this is a truce rather than a complete elimination of trade tensions between the US and China,” he said of the new deal.

“What we’ve seen is that it’s a stage one deal, so obviously there are further stages that the US and China hope to be able to achieve.

“But it is to the testament of both parties that they have negotiated this in a way that has exceeded expectations.”

Minerals Council of Australia acting chief Gavin Lind said increased confidence following the deal should lead to greater demand for Australian products, especially from growing Asian economies who rely on our world-class minerals for infrastructure, energy, transport and communications.

But there was some uncertainty around the proportions of LNG, coal and gas that make up the deal.

“The physical capacity of US energy production and transport infrastructure suggests the US may be challenged in supplying $US26.2 billion ($A38 billion) in energy to China,” Mr Lind said.

“Yet even half of this supply volume would represent a significant shift.”

He was also concerned the deal would “undermine the principles of free trade and multilateralism” which have underpinned Australia’s bipartisan approach to trade policy for many decades.

CommSec chief economist Craig James said much would depend on phase two of the deal.

“China says that the extra purchases of US goods won’t be at the expense of other countries. We’ll have to wait and see,” he said.

“But overall, today’s agreement is a positive first step for the US, China and the world more broadly.”

With AAP