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Exclusive: US does not expect a significant impact of coronavirus on the trade agreement with China

UNITED STATES (OBSERVATORY NEWS) — US Treasury Secretary Steven Mnuchin said he does not expect the Corona virus to have a significant impact on the one-stage trade agreement between the United States and China, but the situation may change as more data arrives in the coming weeks.

Financial officials from the world’s 20 largest economies said on Sunday they would continue to closely monitor developments in the outbreak of the rapidly spreading virus, but declined to describe it as a threat of a downturn in the global economy.

Mnuchin warned in an interview with Reuters late on Sunday evening from jumping to conclusions about the impact of what he described as a “human tragedy” on the global economy or companies’ decisions about supply chains, and said it was too early to know this simply.

He added that China is currently focusing on the virus, but Washington still expects Beijing to fulfill its obligations to purchase more US goods and services under the agreement.

He continued, “I do not expect that this will have an impact on the stage one. Based on everything we know now and what the virus has reached. I do not expect there will be any significant impact.”

“Of course, this may change with the development of the situation. Within the next few weeks we will have a better evaluation with more data available on the prevalence of the virus.”

A senior administration official said that Mnuchin later met with the Saudi crown prince, Mohammed bin Salman, but he did not give details about the meeting.

He acknowledged that the outbreak might delay the start of negotiations to deepen the trade agreement with Beijing and reach the stage two agreement, but he made clear he was not concerned about that at the moment.

“If we find a suitable deal before the elections, this is great,” he said. If we come to it after the elections, that’s great. We feel no pressure in one way or another, ”referring to the US presidential elections scheduled for November 3, during which President Donald Trump is expected to seek re-election.

At a separate press conference, he said there may be some short-term effects on supply chains, but he cautioned against the idea that this would reinforce concerns about globalization. He added that big companies always evaluate risks and adjust supply chains.

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