Kudlow Says Phase-One Trade Deal Is About Breaking Down Barriers
The “export boom” from the U.S.’s trade deal with China will be delayed because of the coronavirus outbreak, but the economic impact “is going to be minimal,” White House economic adviser Larry Kudlow said.
“It’s not a catastrophe, it’s not a disaster -- we’ve been through this before. I think the impact is going to be minimal,” Kudlow said on Fox Business Tuesday. “It’s going to be much tougher for China.”
More than 20,600 cases have now been reported, an increase from about 17,000 the previous day, with economists at Goldman Sachs Group Inc, UBS Group AG and Macquarie Group Ltd. among those cutting their forecasts for Chinese economic growth in both the first quarter and the full year, while others expect material shocks to gross domestic product.
Last week, Kudlow said the U.S. hasn’t seen any major effects on its economy from the coronavirus epidemic, and will refrain from using it as leverage in the second phase of China trade talks.
The U.S. and China on Jan. 15 sealed the first phase of a trade agreement that’s supposed to take effect in mid-February. In the first year of the deal, China committed to buy an extra $76.7 billion of American goods beyond what it did in 2017, and an additional $123.3 billion in the second year. Purchases of agricultural products are particularly important for the livelihoods of American farmers who’ve been hurt in an escalating tariff war with China over the past two years and are a key base of support for Trump.
President Donald Trump’s administration isn’t going to “fine tune” the economy with tax cuts because of the outbreak, he said, adding that Trump will announce “tax cut 2.0” proposals during his re-election campaign.