3 Ways the Coronavirus Will Have an Impact on the U.S. Economy
Robert Aboolian
economy, Americas
Apple closed all its stores in China as a health precaution, now through at least Feb. 14.
As the new coronavirus spreads around the world, and confirmed cases and deaths mount, economists are increasingly concerned about the impact on the U.S. economy.
In a recent report to Congress, the Federal Reserve warned that disruptions from the coronavirus could spill over into the global economy, creating new risks to the U.S. And Wall Street lender Goldman Sachs estimates that the virus will cut as much as half a point off of U.S. economic output in the first quarter of 2020.
As an expert in supply chain management, I’ve studied how dependent U.S. companies have become on manufacturers of parts and products in China. But that is only one of many ways the outbreak could hurt the U.S. economy. Here, I list three – as well as something that could mitigate the impact.
1. Sales to China
China is one of the largest markets for U.S. products, especially electronics and fashion.
For example, about 47% of Qualcomm’s annual revenue and 28% of Intel’s income comes from China, making it the most important region for both chipmakers. China is also the second-largest market for iPhone-maker Apple, and the outbreak has the potential to severely depress its sales. Apple extended the closure of its corporate offices and all of its stores in China until at least Feb. 14.
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