Despite a seeming impact on the Dow Jones and world economies, Treasury Secretary Steve Mnuchin, says that the current coronavirus outbreak will not negatively impact President Trump’s trade deal with China.
According to Mnuchin, the coronavirus outbreak will not have any ‘material impact’ on the’ ‘Phase One’ China trade deal.
In an interview with Reuters Monday, Mnuchin said it’s too early to tell what kind of change the virus would bring. His comments came after finance officials from the top 20 economies said they would closely watch how the virus spreads, but did not comment on whether the virus poses a risk.
The treasury secretary also spoke with CNBC Sunday and said it would be about one month before officials clearly know whether the virus would hurt the global economy.
“I would say in terms of the economic issues, it’s tough to have strong predictions on the economic issues without being able to predict the health outcome,” he stated. “So, I think we’re going to need another three or four weeks to see how the virus reacts until we really have good statistical data.”
Mnuchin also told CNBC he did not believe the Chinese government was aware of the coronavirus danger when a delegation traveled to the White House for the signing of the Sino-U.S. “phase one” trade deal in January. “I think the Chinese government reacted much quicker than they have in previous situations,” he said. “There’s no question that China’s major focus is now controlling the virus and the approach of phase two (of the trade deal) will definitely slow down a little bit.”
Mnuchin added that the U.S. does have a backup plan if the virus negatively affects the economy.
Meanwhile, the World Health Organization (WHO) said they will no longer use the term “pandemic” when referring to the coronavirus outbreak. The agency said “there is no official category” for the word.
Instead, the WHO has designated the coronavirus as a “public health emergency of international concern.” Back in 2009, the agency declared the swine flu outbreak a pandemic, which lead to criticism from pharmaceutical companies after the illness turned out to be mild.
“Our decision about whether to use the word pandemic to describe an epidemic is based on an ongoing assessment of the geographical spread of the virus, the severity of the disease it causes and the impact it has on the whole society,” said Tedros Adhanom Ghebreyesus, WHO Director General. “For the moment, we are not witnessing the uncontained global spread of this virus and we are not witnessing large scale, severe disease or deaths.”
Nonetheless, the WHO warned the threat is still serious with the latest outbreaks occurring in Italy and Iran.
At a hearing before the Senate Finance Committee last week, Mnuchin insisted the coronavirus would not have an economic impact that lasted beyond 2020.