Treasury Secretary Steven Mnuchin claims that there has been "no noticeable effect" on the Phase 1 trade deal so far, although this may change as new data becomes available over the coming weeks.
Mnuchin spoke with Reuters on Sunday, warning against "jumping to conclusions" on the impacts of the coronavirus. Mnuchin claimed it was "too early to know" of the effects of the coronavirus on the global economy, corporate supply chains, and the Phase 1 trade deal. Despite the massive impact of the coronavirus in China, the White House still expects that China will meet its end of 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," said Mnuchin
Mnuchin's declaration comes as a slew of new cases has been reported in Iran, Italy, and South Korea, among others. Mnuchin claimed that while the infectivity of the coronavirus was far greater than SARS, the survival rate appeared to be higher. While the fatality rate for Coronavirus is indeed lower, it is worth noting that, so far, the virus has killed 2,715 people, while SARS killed 774.
Mnuchin may be correct in the claim that there is no noticeable effect on supply lines as of yet. However, the coronavirus has already disrupted the global economy to a very noticeable degree, despite claims to the contrary. Over the past week, the Dow Jones Industrial Average (NYSE: DIA) has plummeted due to widespread investor concerns and an increasingly volatile market, in addition to shrinking global demand, and in some sectors such as energy, supply gluts. During Thursday trading, the Dow's drop worsened even more, plunging to new lows after already erasing the progress made during the early weeks of 2020. The plummeting of U.S. indices has coincided with dour news of more global outbreaks and the CDC's recent warning that the U.S. may likely be heading for a pandemic, reflecting the deep-seated fear felt by investors despite Trump administration assurances.
While supply chains have not been noticeably disrupted yet, many experts are warning that it may be a matter of time until shortages do happen. The concern is deeply reflected in the plummeting of major U.S. indices, which have shown a marked decline in stocks across all sectors. Stocks such as Apple (NASDAQ: AAPL) and Advanced Micro Devices (NASDAQ: AMD) were down due to concerns over the very likely possibility of supply line disruptions.
More recently, the FDA has warned that it is likely that medicine supply chains may be affected by the outbreak in China. "FDA is keenly aware that the outbreak will likely affect the medical product supply chain, including potential disruptions to suppliers [and] shortages of critical medical products in the U.S.," FDA Commissioner Dr. Stephen Hahn said in a statement. No manufacturers have reported disruptions as of yet, but the FDA is urging drug manufacturers to keep the agency apprised of any changes.