KEY POINTS

  • U.S. businesses that rely on Chinese supply chains could face blowback as a result of the ongoing coronavirus outbreak
  • The Trump administration is not planning to suspend tariffs on Chinese goods

U.S. Treasury Secretary Steven Mnuchin said Tuesday that the Trump administration is not planning to suspend tariffs on Chinese goods, as the coronavirus outbreak weighs on China’s economy. 

“We’re not considering that at the moment, but as this progresses ... we’ll look at all the options that we think are important to help particularly SMEs and particular areas of the economy that are impacted by this,” Mnuchin told the House Ways and Means Committee. SMEs refers to small and medium-sized enterprises. 

U.S. businesses that rely on Chinese supply chains could face blowback as a result of the ongoing coronavirus outbreak. The Federal Reserve cut rates Tuesday to stimulate the economy amid the crisis.

There are over 90,000 coronavirus cases worldwide, with the vast majority in China. The coronavirus originated at an animal and seafood market in the Chinese city of Wuhan and has paralyzed the Chinese economy, as Beijing has put millions of its citizens on lockdown. 

The coronavirus comes as China has already been slammed by $550 billion in tariffs on its goods by the Trump administration. 

In January, China and the U.S. signed a “Phase One” trade agreement to put some relief on the Chinese economy, with Washington to suspend tariff increases on Chinese goods. In exchange, China would buy at least $200 billion of American goods over the next two years and open up its financial markets to U.S. firms, along with other stipulations.

Trump believes that tariffs on Chinese firms would bring back manufacturing jobs to U.S. shores and keep Beijing from flooding the global market with artificially cheap goods. Retailers such as Walmart have warned that they would be forced to raise prices due to the tariffs, which would hurt American consumers.