The head of an American business lobbying group voiced confidence that China will meet its “Phase 1” trade deal commitments to massively increase purchases of US goods and services despite the coronavirus crisis, Reuters reports.
Craig Allen, president of the US-China Business Council (USCBC), said the business slowdown in China could affect the timing of purchases, but both governments were committed to meeting the targets. The group represents US companies doing business in and with China.
While China’s commitment to increase purchases of US manufactured goods, farm products, energy and services by US$200 billion by the end of 2021 was “aggressive”, Allen said the US 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.
Under the trade deal, which officially takes effect on Saturday, China has pledged to increase US goods purchases by US$77 billion in 2020 and by US$123 billion by 2021, compared to a baseline of US imports from 2017, the year before the US-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 US 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. and FedEx Corp., which donated delivery services.
In a survey of member companies released on Thursday, the USCBC said that 78 percent of respondents viewed the Phase 1 trade deal as positive or somewhat positive, while 12 percent viewed the deal as negative.
Those viewing the trade deal positively overwhelmingly said so because it stopped further tariff escalation and puts the US-China relationship on a more sustainable trajectory.
But 51 percent of the companies said it was too early to tell whether the benefits of US President Donald Trump’s trade actions against China would outweigh their costs.
Only 22 percent said they expected to utilize the trade deal’s dispute mechanism.
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