US authority says coronavirus will not affect China’s commitment to buy US products

According to Reuters, a senior US official said the country’s government expects China to honor its commitments to buy more American products under a trade agreement signed by the world’s two largest economies in January, despite the outbreak of the rapidly expanding coronavirus.

The US Treasury official said it was too early to make accurate predictions of the virus’s impact on the global economy. However, he admitted the scenario predicts a slump in China’s first-quarter growth and then a strong recovery.

The International Monetary Fund said this week that the epidemic has already slowed economic growth in China. It also said the virus could hinder a projected recovery for the highly fragile global economy in 2020 if it spreads to other countries.

Last Friday February 21st, China’s Ministry of Commerce said that January and February exports and imports will be affected by the coronavirus outbreak, but that foreign companies in most regions will resume production by the end of February.

Asked if the outbreak would require changes to Phase 1 of the trade agreement with China, the official said: “At this stage, we do not expect changes in the implementation of Phase 1.… We still expect them to live up to their commitment.”

Under the agreement, which went into effect this month, China has pledged to increase purchases of US goods by $ 77 billion in 2020 and by $ 123 billion by 2021, compared to 2017, a year before the start of the US-China trade war.

Source: Reuters

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