The United States reportedly sees no ramifications of the rapidly spreading coronavirus outbreak on its “phase one” trade agreement with China, according to government officials.
In an exclusive interview with Reuters late Sunday, Treasury Secretary Steven Mnuchin said that the illness, which has killed more than 2,600 people and sickened about 79,500 as of Monday morning, isn’t expected to change any commitments firmed up by both countries under the trade deal. However, he reportedly added that it was too soon to determine the extent of the impact.
“I don’t expect that this will have any ramifications on phase one. Based on everything that we know and where the virus is now, I don’t expect that it’s going to be material,” Mnuchin said. “Obviously that could change as the situation develops. Within the next few more weeks, we’ll all have a better assessment as there’s more data around the rate of the virus spreading.”
In mid-January, President Donald Trump and Chinese Vice Premier Liu He inked a so-called phase one agreement that not only addressed intellectual property protection and China’s increased purchase of U.S. goods, but also eased nearly two years of tensions between the world’s two largest economies. At the time, U.S. officials said that tariffs already implemented on hundreds of billions of dollars of Chinese products would remain in place until a phase two deal could be reached. A time line for that was not revealed.
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Yesterday, Mnuchin suggested that the coronavirus could delay talks that would lead to phase two, but he attempted to mollify those concerns.
“If we get the right deal before the election, that’s great. If we get the right deal after the election, that’s great,” he told Reuters. “We don’t feel any pressure one way or another.” He did not refer to reported pressures posed by Trump seeking reelection in November.
At a meeting on Sunday in Riyadh, Saudi Arabia, the Group of 20 major economies vowed to take action should the illness continue to disrupt global businesses. In a statement at the summit, International Monetary Fund managing director Kristalina Georgieva said, “This is a human tragedy, but it also has a negative economic impact.”
A surge in new coronavirus cases in South Korea, Italy and Iran over the weekend has prompted investors to fear a pandemic. As of 10:30 a.m. ET, the Dow Jones Industrial Average plummeted more than 825 points, while the S&P 500 dropped 94 points and the Nasdaq Composite declined 323 points.
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