The Chinese government is considering lowering their economic growth targets for the year because of the outbreak of the coronavirus which has now infected over 20,000 people.
The virus is crippling commerce, particularly international commerce, as companies shut down their supply chains and avoid mainland China to whatever extent possible. The slowdown in economic activity is reducing demand for goods including American exports that are suppose to double under "phase one" of Trump's "biggest and greatest deal ever."
Trump's top economic adviser Larry Kudlow admitted as much this morning when he conceded that Schrodinger's "export boom" will have to wait.
“It is true the trade deal, the phase one trade deal, the export boom from that trade deal will take longer because of the Chinese virus. That is true,” Kudlow said in a Fox Business Network interview.
But Kudlow noted that the Trump administration, which imposed travel restrictions and quarantines in response to the coronavirus last week, still projects “minimal impact” from the fast-spreading disease.
“The world is not in Wuhan province,” Kudlow said.
I literally laughed out loud when I saw what Kudlow said this morning because this is very convenient, isn't it?
There's nothing convenient about the outbreak of a deadly virus except when you need an optimal scapegoat to blame for a delay in an "export boom" that may have never arrived even if the virus didn't exist.
I was skeptical that exports would somehow double under "phase one" of Trump's deal even before the first person was infected and now it seems less likely than ever especially if the virus continues to spread across China. The world is "not in Wuhan," as Kudlow says, but China is the largest exporter and consumer market in the world and what happens in China effects everyone in the world in some way.
A wide range of companies from Apple to McDonald's to airlines and cruise lines have all shut down operations going in and out of China.