President Trump may be poised to ask China to open its checkbook wide to pay for its role in the COVID-19 outbreak.
Think large reparation payments or a tougher stance on tariffs, says one Trump economic confidant.
“I have not talked to the president about that particular issue [reparations], but I think it is on the table. I would strongly favor reparations. I think the American people would favor reparation payments from China if their behavior has been, I would describe it as sinister in the last months and they have been unrepentant. Their deviant behavior led to the spread of a virus that did trillions of dollars of damage, not in the U.S. economy, the world economy. I believe it is justified for the Chinese to pay for their mistakes,” said Trump adviser and economic expert Stephen Moore on Yahoo Finance’s The First Trade.
Moore thinks any reparations should extend well beyond the equivalent financial slap on the wrist.
“That potentially be in the hundreds of billions of dollars range. Of course, how do i get China to pay and make those payments? Do you impose sanctions or tariffs, and there has been some talk. And if it was $500 billion or $2 trillion, and we’ll erase the debt and call it even. China does have to be reprimanded,” Moore explained.
Trump has been a vocal critic of China’s role in the COVID-19 pandemic, whose epicenter has been traced to Wuhan. He frequently refers to COVID-19 as the “China Virus” on the campaign trail and in interviews. Besides the financial toll to corporations worldwide that is playing out at the start of second quarter earnings season (see results this week from Delta, JPMorgan, PepsiCo and Wells Fargo), COVID-19 has had a devastating impact on human life.
More than 13.1 million cases of COVID-19 have been confirmed worldwide with a staggering 573,000 deaths. The United States has had 3.43 million confirmed cases and 138,000 deaths.
While China has moved to aggressively reopen its economy with its COVID-19 cases on the wane, the U.S. continues to deal with major flare-ups in infections. California and Florida, for example, have seen material spikes in COVID-19 infections in recent weeks as lawmakers reopened businesses. Each state has now been forced to implement fresh business restrictions to reduce infections, which is placing renewed pressure on economic output.