WASHINGTON – A rapid spread of coronavirus may be another victim: the United States-China Trade Agreement.
৩ More than 360০ people have died and thousands of people infected with the disease have caused serious damage to the Chinese economy by shutting down factory operations, flying planes and disrupting supply chain. It is also believed that the Trump administration will slow China’s progress in fulfilling what it promised as part of a preliminary trade agreement signed with Chinese officials last month.
Under the terms of the agreement, China has promised to buy another $ 200 billion in American products, including soybeans, machinery and fuel products over the next two years. To reach this high volume, Chinese companies should start buying American products in bulk soon.
The Chinese government is also expected to take swift action to open markets for American agricultural and financial firms, with major reforms being made to the sector within months.
Factories and shops across China have closed, and government officials are focusing on the virus infection, so Beijing will have less ability to meet President Trump’s conditions, analysts say.
“This can be a problem, especially for manufacturers,” said Mary E. Lovely, a senior fellow at the Peterson Institute for International Economics.
He pointed to one example: grounded flights and low tourism would weigh in on Chinese airlines, potentially reducing the purchase of their new American aircraft this year.
“How will the United States handle it? We really don’t know,” he said.
Kartik Natarajan, a supply chain specialist at the University of Minnesota, says production and transportation are severely damaged due to the closure of cities and factories.
“While some parts of this agreement are expected to go into effect in mid-February, the Chinese government can take a back seat to plans to take action to fulfill the commitments of the trade agreement, with a focus on responding to concerns,” he said.
One of the final sentences of the first phase 1 trade agreement could prove key. The provision calls for consultation between the parties if “any natural calamity or unforeseen events beyond the parties’ control delays a party from performing its obligations under this Agreement.”
Even after the catastrophic catastrophe, China’s failure to fulfill its promises could create some opposition in the United States, potentially leading countries back to their strong ties before the signing of the trade agreement.
Economists have predicted a global rise from the virus, at least in the short term. In the United States, Goldman Sachs analysts estimate a 0.4 percentage-point decrease in first-quarter economic growth, though the effect may be slim.
These costs can quickly outweigh the economic benefits of a trade agreement. Although the Trump administration has said big economic gains from the deal, Economists predict that is adjustable, as the deal imposes tariffs on more than $ 1 billion in Chinese goods.
Personally, some officials in the Trump administration have said that China can use the virus as an excuse to delay its promises, in the hope that Mr Trump will eventually resign this year.
Some people in China have reacted negatively to the Trump administration’s decision to restrict travel between countries, including restricting access to all foreign nationals who have recently traveled to China.
In a note to clients, Eurasia Group President Ian Bremer said the Chinese government viewed the American move to close its borders as “unnecessarily provocative” and added a tasty tune to the recently concluded first-stage trade deal, “she said.
Michael Pillsbury, a China expert at the Hudson Institute who has advised the Trump administration, said that he supported the emergency measures and that these could be further enhanced depending on the situation.
He added that the administration should carefully consider the possible consequences of the virus against worsening relations with China.
Mr Pillsbury says, “We need to balance a protective concern with limiting epidemics that can harm our own economy against the desire of some people to be overly alous envious.” Such a response could “provoke animosity among Chinese fundamentalists, who have already claimed that the United States is mercilessly exploiting the health crisis,” he said.
The comments of some American officials add to these concerns. Commerce Secretary Wilbur Ross appeared in an interview with Fox Business on Thursday Describe the virus as representing a potential economic opportunity for the United States.
When Mr Ross expressed his condolences to the victims of the coronavirus, he said it would probably facilitate a return to labor in the United States.
“It gives businesses an opportunity to consider one more thing when reviewing their supply chain,” he adds. “So I think it will help accelerate the return of jobs to North America.”
Mrs Lovely said that viruses, such as American tariffs on China, are also encouraging companies to test their supply chains and invest in producing similar national products outside of China, so they are not completely dependent on one source. But often these factories do not return to the United States.
“We’ve seen trade partnerships from Mexico and Vietnam, but also some high-income countries like South Korea and Japan,” he said.