The "most favored nation" trading status describes a condition in which a country grants other countries favorable trading treatment, such as the reduction of import duties.

This statement is true.

When making foreign trading policies, things like tariffs decide how many things will be imported from where. If you have a most favored nation, you give them lower tariffs and thus motivate them to trade more with you and you help their economy. There can also be an opposite when you make tariffs higher for someone in order to reduce their importing.