Coronavirus Could Put Severe Financial Stress on Global Markets
The spread of China’s coronavirus continues, affecting more than a dozen countries and causing some to suspend flights and close down stores. As the global community works to halt the spread of the virus, the number of infected worldwide rises above 6,000. The new coronavirus already infected more people than SARS did over a decade ago. Following the growing number of infections and deaths, the WHO already scheduled a meeting to discuss whether the issue calls for an emergency declaration.
On the other hand, major global companies in China are either scaling back operations or temporarily shutting down, taking the initial financial hit of the Wuhan virus. Until February 9, Toyota and Ford will stop production at some of their factories; Starbucks already closed 2,000 stores; Cargill has ordered its employees to stay at home.
The effect of the coronavirus isn’t just visible at the micro-level; health experts and economists warned that its global impact could be significant as well. Considering the interconnectedness of the global supply chains and how quickly the virus is spreading, financial repercussions are to be expected. If the coronavirus doesn’t get contained, the economic damage to global markets could be more severe than what previous pandemics have caused.
Meanwhile, in the US, experts said that China’s economic slowdown may have a negative impact on the promises Beijing made to President Trump following the “Phase One” trade deal. Beijing made a commitment to increase its purchases of US goods and services by $200 billion over two years; with the rampant spread of the virus, it seems that the country won’t be able to deliver on its promise.