THE TTALK QUOTES


On Global Trade & Investment
Published By:
The Global Business Dialogue, Inc.
Washington, DC  Tel: 202-559-9316
No.9 of 2020
MONDAY, FEBRUARY 10, 2020

Click HERE for last Thursday's Brexit quote from Shawna Morris.
BECAUSE OF THE CORONAVIRUS ...

 "Dell Technologies, HP, Qualcomm, Huawei, Samsung, Qorvo, Skyworks Solutions, MagnaChip Semiconductor, and Amkor Technologies are all looking at dsiruptions to their supply chains."

Steve Banker
Forbes
February 10, 2020
CONTEXT
Officially, Wuhan is the capital of China’s Hubei Province. Informally, it is the capital of central China, sometimes referred to as the Chicago of China. For the record, Wuhan, population over 11 million, is much, much larger than Chicago, with about 2.7 million people.  Since January 23, Wuhan has been under quarantine because of the outbreak there of the now infamous, if not well understood, coronavirus.  

To date, there are 42,728 confirmed cases worldwide and 1,013 fatalities. Over 29,000 of those cases are in Hubei province, and according to a recent Bloomberg article, “Coronavirus may infect up to 500,000 in Wuhan before it peaks.”  In short, we are still at the beginning of the story of this virus and unclear about the end. And, indeed, the beginning is not too clear. The first victim, the first patient, has not be identified. He or she is simply referred to as “Patient 0.” China at first suggested that the virus originated in a Wuhan fish market, since shutdown, but no one knows for sure where it started, and, indeed, more troubling origin explanations have been offered. Candidly, though, the origin is not our concern. Our focus, here and in future entries on this topic, is and will be on how the coronavirus is affecting production, trade, and policy.

Today’s featured quote is from an article by Steve Banker of Forbes, which was published earlier today. In it, Mr. Banker noted that Foxconn, “Apple’s most important contract manufacturer,” has shut down some facilities because of the coronavirus, and he suggested that “If Foxconn is unable to ramp up production soon, Apple will have to delay the launch of its next iPhone” and could “suffer material impact to its financial results.”

And the hi-tech sector is hardly alone. Automobile producers are also feeling the effects of the virus. GM and Ford have both had to idle plants in China because of it, and car companies around the world have had to interrupt production for want of parts that would otherwise have come from China. As was pointed out in another Forbes article, “The U.S. auto industry sources 15 percent of its components from China,” and delays in getting those parts can shut down production lines. 

The Phase One China deal.  Last, but certainly not least, the coronavirus will make it more difficult for China to honor the purchasing commitments it made in the U.S.-China trade deal that was signed in the White House on January 15.
COMMENT
People who comment on trade policy have almost nothing to offer to those who suffer the immediate effects of a serious disease like the coronavirus. Their help must come from their families, from the medical professionals who treat them, and from the virologists and other scientists who struggle to understand, cure and control such diseases. The trade policy world does, however, need to come to grips with the economic effects of such outbreaks, including questions of supply chain management and the government responses that may become necessary, for example, in assessing and administering January’s Phase One China Agreement. It is those issues that we expect to address in later entries here and perhaps in other settings as well.
SOURCES & LINKS
Supply Chains Disrupted by Coronavirus is a link to the Forbes article by Steve Banker that was the source for today’s featured quote.

Supply Chain Threat was an article by contributor Randy Brown, also published by Forbes today and referenced above.

Coronavirus Stats is a Bloomberg article showing the number of cases worldwide with a breakdown by country. 

Diplomat Pushes Back.  We did not go into the dispute about the source from which the coronavirus might have originated because that is not our topic. But there is a dispute here, one that could become significant, and this Politico article provides its essential elements.

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