US-China trade truce at risk as virus hits global economy “We can’t control the market.” China’s exports plummeted in the first two months of this year on the back of the new coronavirus, falling 17.2 percent from a year ago, while imports slipped 4 percent. The virus threatens “China’s import commitments as mandated by the phase one trade deal,” said Rory Green, an economist at research firm TS Lombard. China has agreed to buy more US farm commodities and seafood, manufactured goods such as aircraft, machinery and steel, and energy products. But there are provisions “to allow a delay in compliance, and both nations are likely to accept this, given the global nature of the coronavirus outbreak,” Green added. “There is now no chance of China fulfilling its import targets within the time frame set by the text of the agreement.” The US economy is also taking a hit from the virus, with the government introducing sweeping restrictions on arrivals from Europe and huge stock market falls. Diplomatic tensions between the US and China have also flared up during the outbreak. Washington ordered Chinese state-run media to cut the number of Chinese nationals employed in the US after Beijing expelled three Wall Street Journal reporters. The two countries have also sparred over the pandemic, with a US ban on arrivals from China angering Beijing. More recently, Washington blamed Beijing for the disease and China — where the virus was first detected in December — promoted conspiracy theories that it started in the US. “I doubt that either has considered fully the implications (that) the measures taken to counter the spread of the virus have for their bilateral relations,” said Tsang. But he said that given the upcoming US election, President Donald Trump was unlikely to highlight any failure by China to meet all the terms of the deal. Instead, Trump will use the agreement to score political points. But the trade war has fuelled distrust among farmers in both countries that could undermine the deal’s success. In the Federal Reserve’s latest “beige book” survey, some US farmers said purchases of agricultural goods by China had “not yet materialized” and expressed worries that the virus “would be used as an excuse for missing future trade targets.” Liu Lingxue, general manager of agricultural trading firm Guangzhou Liangnian, said her profits have fallen by at least a third during the virus outbreak. But she does not want to import sorghum and soybeans from the US. “We would first consider other countries that have been friendlier to China,” she said.