Exports involved in the "phase one" trade deal with China are expected to take longer because of the growing coronavirus outbreak, but the U.S. economy should still benefit from the epidemic, National Economic Council Director Larry Kudlow said Tuesday.
"It is true the 'phase one' trade deal, the export boom from that trade deal, will take longer because of the Chinese virus," Kudlow told Fox Business' Maria Bartiromo. "On the other hand, let's not forget the North American trade deal, USMCA, is going to unlock tremendous investment and also bolster domestic content for manufacturing, farmers will benefit, manufacturers will benefit, technology people will benefit."
He added that overall, the impact of coronavirus on the U.S. economy will be "minimal," or it could even spark gains.
“It’s not a catastrophe, it’s not a disaster — we’ve been through this before. I think the impact is going to be minimal,” Kudlow said. “It’s going to be much tougher for China.”
"This may spur some business investment," Kudlow told Bartiromo. "Equipment and inventories were very, very low, as you may know, in the last GDP report, so you may get a step up in production here in the U.S., which would be very beneficial."
He also said that U.S. manufacturers may face some issues getting components they need from China, but it will not be across the board.
"Chipmakers are not going to be affected that much," said Kudlow. "Pharmaceutical stuff will probably be affected much more. Some things kind of in the middle when you get to automobiles and auto parts, but there's a lot we don't know. It sounds like the world has stopped. The world hasn't stopped."
His comments come after Chinese officials announced Tuesday that the new coronavirus strain has now killed more people than the deadly SARS outbreak did in 2002 and 2003. The new strain had claimed 425 lives in China and infected tens of thousands more, and infectious disease experts said the outbreak is expected to become a pandemic.
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