China coronavirus could hit Beijing’s ability to meet US trade war deal import demands – SCMP

The South China Morning Post (SCMP) carried an article on Wednesday, citing the analysts’ assessment of the likely China coronavirus impact on the US-China phase one trade deal.

Key Quotes:

“As part of the phase one deal signed on January 15, China is obliged to buy US$200 billion in additional US imports over two years on top of pre-trade war purchase levels.

However, with the outbreak driving down commodity prices and placing huge swathes of Chinese territory on lockdown, analysts are warning that import targets that already seemed aspirational have become even tougher to reach.

The longer the crisis lasts, the worse the damage to China’s ability to meet the purchase target.

Analysts were already skeptical about the lofty purchase targets since they would require a significant reshuffling of China’s trading practices and the stockpiling of commodities for which it may not have domestic demand. Beijing has maintained repeatedly in its statements on the trade deal that it would only buy US goods according to its domestic demand.”

The market mood remains safe and sound, undeterred by the above opinion piece, as easing China coronavirus concerns and upbeat US macro data aid the risk recovery ahead of the Fed interest rate decision. USD/JPY trades on the front foot around 109.20 region while the Aussie trades 0.12% near 0.6770 levels.