Executive director of the Pacific Northwest Trade Organization explains how the global response to coronavirus could impact the Oregon economy.
Originating in Wuhan, China, the world has been rocked by the flu-like coronavirus pandemic. Stock prices plunged for the second time this week over concerns the virus will destroy economic growth.
Coronavirus has infected 21 people in Oregon so far, according to the most recent figures from the Oregon Health Authority. Gov. Kate Brown has declared a state of emergency, and banned gatherings of more than 250 people.
The Centers for Disease Control and Prevention has sent Oregon $8 million in federal funding to help fight the virus.
Travel and shipping industries will be hit hard by restrictions imposed by the federal government to contain the virus.
Maria Ellis, executive director of the Pacific Northwest Trade Organization, discusses how containment efforts could impact Oregon’s economy, where one in five jobs depend on international trade.
This interview has been edited for length and clarity.
How would you describe the impact coronavirus is going to have on Oregon’s economy?
It’s a little on the nose, but I like to think of Oregon’s economy as a body with a compromised immune system. If you work too hard, you stay up too late and you have stress, you’re going to be more susceptible to a disease.
In this case, the trade war’s impact on Oregon’s economy meant we were already on shaky ground; now COVID-19 is the disease, literally and figuratively.
The virus is going to disrupt supply chains, keep people away from their jobs, and it’s going to affect air travel. The market right now is showing a recession, and I think the market is correct. It will be important to look at the job numbers next quarter in order to see the impact.
Where can we expect economic losses to come from?
The first major area it is going to hit is travel and tourism. China is our No. 1 trading partner, but it’s also a major source of tourism. Our hotels and airlines are probably going to feel the impact first and feel it most sharply. You might see cutting hours or layoffs.
There are now not enough shipping containers coming in from China, which are vital components of our supply line. When goods arrive here in containers from China, we fill them up with our own goods and ship them back. Now there’s a backlog here because of the lack of shipping containers, especially for refrigerated goods.
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We are hearing a lot about China in the news, but the virus is also affecting Europe. Where might that play out in Oregon?
Germany is a pretty expansive market, and Great Britain is an important trade partner for Oregon as well. One thing to watch for is the auto market and the auto parts market.
Since the writing of this article, the U.S. has imposed a travel ban on most European countries.
How will coronavirus containment efforts impact the tech sector?
Supply lines from China mean big tech companies like Intel can’t get the parts they need. One thing that’s a factor is the number of international trade shows that have been cancelled. These are places where companies go to make connections and generate new ideas. They cost millions and take a year to plan.
That’s all going to be a sunk cost.
Do you think the federal response has been sufficient?
The federal government approved an $8 billion funding package to fight the virus, with $200 million for small business grants. I think that is woefully underbudgeted.
Smaller businesses are going to need to be guided and helped to navigate the market. There’s no telling when things are going to bounce back.
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