WASHINGTON (Reuters) - The head of an American business lobbying group said on Thursday he was confident that China will still meet its “Phase 1” trade deal commitments to massively increase purchases of U.S. goods and services despite the coronavirus crisis.
Craig Allen, president of the U.S.-China Business Council (USCBC) said that the business slowdown in China could affect the timing of purchases, but both governments were committed to meeting the targets. The group represents U.S. companies doing business in and with China.
While China’s commitment to increase purchases of U.S. manufactured goods, farm products, energy and services by $200 billion by the end of 2021 was “aggressive,” he said U.S. industry was ready to meet the challenge.
“The coronavirus doesn’t change any of that, though it might affect the timeline,” Allen told a news conference in Washington.
The Chinese province at the center of the virus outbreak reported a much larger number of infections and deaths under a broader definition on Thursday, knocking back global stocks and raising new questions about the extent of the outbreak.
Under the trade deal, which officially takes effect on Saturday, China has pledged to increase U.S. goods purchases by $77 billion in 2020 and by $123 billion by 2021, compared to a baseline of U.S. imports from 2017, the year before the U.S.-China tariff war began.
A Chinese government researcher on Tuesday forecast that the coronavirus outbreak could cut China’s 2020 economic growth by a full percentage point, pressuring the cash flow of companies that would be buying U.S. goods.
The USCBC announced on Thursday that around 60 of its member companies were donating medical supplies, including 2 million face masks, and other goods to hospitals in Wuhan. The effort, included companies such as insurer Chubb, retailer Walmart Inc (WMT.N) and FedEx Corp (FDX.N), which donated delivery services.
In a survey here of member companies released on Thursday, the USCBC said that 78% of respondents viewed the Phase 1 trade deal as positive or somewhat positive, while 12% viewed the deal as negative. Those viewing the trade deal positively overwhelmingly said so because it stopped further tariff escalation and puts the U.S.-China relationship on a more sustainable trajectory.
But 51% of the companies said it was too early to tell whether the benefits of U.S. President Donald Trump’s trade actions against China would outweigh their costs. And only 22% said they expected to utilize the trade deal’s dispute mechanism.
Reporting by David Lawder; Editing by Lisa Shumaker