RIYADH (Reuters) – U.S. Treasury Secretary Steven Mnuchin told Reuters he does not expect the coronavirus outbreak to have a material impact on the Phase 1 U.S.-China trade deal, although that could change as more data becomes available in coming weeks.
U.S. Treasury Secretary Steven Mnuchin testifies before the Senate Finance Committee during a hearing on the President’s FY2021 Budget on Capitol Hill in Washington, U.S., February 12, 2020. REUTERS/Yuri Gripas
Finance officials from the world’s 20 largest economies said on Sunday they would keep a close watch on the fast-spreading outbreak, but stopped short of identifying it as downside risk to the global economy.
Fears of a coronavirus pandemic mounted even as they met in the Saudi capital of Riyadh, with sharp rises in new cases reported in Iran, Italy and South Korea.
Mnuchin, in an interview with Reuters late on Sunday, cautioned against jumping to conclusions about the impact of what he called a “human tragedy” on the global economy, or on companies’ supply chain decisions, saying it was simply too soon to know.
China was focused on the virus for now, he said, but Washington still expected Beijing to live up to its commitments to buy more U.S. products and services under the trade deal.
“I don’t expect that this will have any ramifications on Phase 1. Based on everything that we know, and where the virus is now, I don’t expect that it’s going to be material,” he 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.”
Mnuchin met late on Sunday with Saudi Crown Prince Mohammed bin Salman, a senior U.S. administration official said, but gave no details about the meeting.
Mnuchin acknowledged the outbreak could also delay the start of negotiations on deepening the trade deal with Beijing and reaching a Phase 2 agreement, but said he was not worried about that at this point.
“If we get the right deal before the election, that’s great. If we get the right deal after the election, that’s great. We don’t feel any pressure one way or another,” he said, referring to the Nov. 3 U.S. presidential election, in which President Donald Trump is seeking reelection.
Mnuchin noted that the contagion factor with COVID-19, the acronym for the virus, was higher than with the SARS outbreak in China in the early 2000s, but said the survival rate appeared to be much higher.
In a separate news conference, he said there could be some short-term impact on supply chains, but cautioned against the idea that it could increase concerns about globalization. Big companies were always assessing risks and adjusting supply chains, he added.
Reporting by Andrea Shalal; Editing by Catherine Evans