The coronavirus continues to make its way around the world. China’s healthy economy hit a major roadblock when the virus closed factories and retail stores in February. According to Chinese economists, Gross Domestic Product growth will drop below 5.0% in the first quarter.
China’s economy grew by 6.1% in 2019. The U.S. economy grew by 2.3%. Federal Reserve Chairman Jerome Powell told the press U.S. economic growth will drop below 2.0% in 2020, but Powell made that statement before the coronavirus outbreak. The latest word from Powell is U.S. GDP growth will take a hit from the virus. But he didn’t put a number on the hit. Several economists claim GDP growth will drop below 1.5% in the first quarter due to the idle factories in China.
In 2019, U.S. exporters from 39 states lost billions from the tariff war with China. Texas, Florida, and Alabama had double-digit decreases in their export business to China. The other states had single-digit decreases, but the decreases were large enough to hurt GDP growth in those states.
Mr. Trump continues to hurt the U.S. tech industry by blacklisting and trash-talking Huawei, China’s largest tech company. U.S. tech executives let the president know bringing Huawei’s to its knees has a direct impact on their revenue. But the president continues to come up with ways to shaft Huawei on the world stage. Trump recently sent Mike Pompeo to Munich to convince European tech leaders to join Trump’s fight with Huawei. But most EU tech executives know the Chinese will make life miserable if they side with Trump, according to the New York Times.
Boris Johnson decided he would use Huawei’s 5G services despite Trump’s threat to stop sending him intelligence reports. During a recent phone conversation, President Trump pitched a fit. Mr. Trump hung up before Johnson could finish explaining his decision.
Trump is not the only concern hanging over Johnson’s head. The EU told Boris he needs to extend the Brexit date if he wants a comprehensive trade deal. Boris wants a free-trade agreement. The EU wants to give him one if he agrees to other requests from EU members.
French President Macron wants Boris to give EU members fishing rights when Brexit is in the history books. But Johnson only wants to give France, and other EU members limited fishing rights. Macron told the press he’ll fight that decision. If Johnson continues to put up roadblocks, EU president Ursula von der Leyen told the press the UK may leave the EU with a partial agreement, and that will hurt his quest to stand alone on the world’s trade stage.
Dil Bole Oberoi
