US traders say "New coronavirus likely to delay exports to China under trade agreement"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Larry Kudlow, Chairman of the U.S. White House National Economic Council (NEC), said on the 4th (local time) that the timing of China's increased imports from the U.S. under the Phase One trade agreement between the U.S. and China is expected to be delayed due to the spread of the novel coronavirus (Wuhan pneumonia).

Chairman Kudlow appeared on Fox Business Network that day and said, "I think the 'export boom' under the U.S.-China Phase One trade agreement will take longer because of the novel coronavirus issue," adding, "That is a fact." This is interpreted to mean that although China agreed to import a large volume of U.S. products, including agricultural products, the Chinese government is focusing on preventing the spread of the novel coronavirus, which may delay the implementation of the agreement.

Under the Phase One agreement, China had agreed to purchase an additional $200 billion (231.7 trillion KRW) worth of U.S. products, including agricultural and manufactured goods, over the next two years. Accordingly, Bloomberg News reported the previous day, citing sources, that "Chinese officials hope to agree on some flexibility regarding the Phase One trade agreement commitments."

Chairman Kudlow said that due to the novel coronavirus situation, some parts produced in China may not be procured, which could affect part of the U.S. supply chain. He forecasted, "Overall, not much, and semiconductor manufacturers will not be greatly affected, but pharmaceutical companies may be hit harder."

However, he emphasized, "This (novel coronavirus situation) is not a catastrophe or disaster. We expect the impact on the U.S. economy to be minimal," and added, "The novel coronavirus situation could stimulate business investment within the U.S., leading to increased production."

Meanwhile, the Wall Street Journal (WSJ) reported that Chairman Kudlow said efforts are being made with U.S. telecommunications equipment companies such as Microsoft (MS) and Dell to reduce the overwhelming market share of Chinese telecom equipment maker Huawei in the 5G network equipment market.

Chairman Kudlow said, "Basically, the big picture is that U.S. 5G equipment will use everything made by American companies," adding, "Dell and MS are currently moving very quickly to develop software and cloud services that can replace a large amount of equipment."

This statement came amid the U.S. demanding its allies, including the UK and Germany, to ban the use of Huawei equipment. Huawei's market share in the telecommunications equipment market was recorded at 27.8% last year, up 2.3 percentage points compared to 2016. WSJ reported that the White House plans for some telecommunications and technology companies to agree on a 'common standard,' which would allow 5G software developers to run software code on equipment from any hardware vendor.

This content was produced with the assistance of AI translation services.