Treasury Secretary says officials are closely monitoring the coronavirus, but said they hadn’t yet seen major effect on supply chains
WASHINGTON—Treasury Secretary Steven Mnuchin said Thursday that U.S. officials have reduced their expectations for economic growth in 2020 because of disruptions caused by the grounding of Boeing Co. ’s 737 MAX.
In an interview with Fox Business Network, Mr. Mnuchin said gross domestic product growth may be lower than 3% this year.
“Boeing has had a big impact on our exports, being our largest exporter,” Mr. Mnuchin said. “I think that could be 50 basis points if not more.”
A basis point is one one-hundredth of a percentage point. Boeing halted production of its troubled 737 Max jet last month after it was grounded by regulators following two fatal crashes.
Mr. Mnuchin also said officials are closely monitoring the fast-spreading coronavirus, but said they hadn’t yet seen major effect on supply chains.
“There’s no question that the virus will have some impact on global growth and some impact on the U.S.,” he said but added it is too early to tell how significant the effects will be.
Mr. Mnuchin also said the announcement by China early Thursday that it would lift some tariffs on U.S. goods was expected and agreed to as part of the recently signed phase one trade deal.
Mr. Mnuchin said the president is willing to cut tariffs on China as part of a phase two deal, but that U.S. negotiators left tariffs on to incentivize China to continue moving toward the next phase of talks.
Asked if the U.S. planned to impose more tariffs on European goods, Mr. Mnuchin said President Trump was focused on reaching a new trade agreement, but noted that officials had “already seen a tremendous amount of investment by the European auto makers into the U.S. and building factories here. So that’s also part of the agenda and that is working.”