Coronavirus to delay US-China trade deal ‘export boom’
The outbreak of the coronavirus in China will delay the “export boom” in Chinese imports of US goods and services, but the overall economic impact on the US economy will be “minimal,” White House economic adviser Larry Kudlow said Tuesday.
Kudlow said the outbreak of the coronavirus, which has now impacted over 20,700 people, with 427 confirmed deaths, is not “a catastrophe” nor “a disaster” for the US and the global economy.
Yet it will limit China’s ability to step up its purchases in the short term, meaning the anticipated export surge will take longer to be felt.
“It is true, the export boom from that [phase one] trade deal will take longer [to take effect] because of the virus,” Kudlow said on Fox Business news.
China has committed to buy an additional $76.7 billion worth of US goods and services in 2020, on top of the 2017 baseline figure, including $12.5 billion of agricultural goods such as soybeans, corn, ethanol, wheat and meat products.
“People should be very calm about this [the economic impact of the outbreak],” Kudlow said, adding that the impact on the US economy would be “minimal,” which he estimated at a 0.2% hit during the current quarter.
He added that the delay in Chinese purchases will be partially compensated by increased trade following the ratification of the USMCA trade agreement last month by the US Congress.
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