U.S. officials are under growing pressure from American companies to remove punitive tariffs imposed on Chinese products as part of an effort to cope with the potentially grave impact of the coronavirus on the U.S. economy, and the epidemic could offer a turning point for the bilateral relationship, Chinese analysts said. Pointing to U.S. stock market volatility after the U.S. Federal Reserve made a rare 50-basis-point interest rate cut, analysts argued that stopping the trade war with China will be more effective for both countries to cope with the economic fallout of the coronavirus outbreak. In a sign of rising pressure on the U.S. administration, U.S. Treasury Secretary Steven Mnuchin was asked whether the U.S. was considering lowering tariffs on goods from China in response to the Covid-19 epidemic in the U.S. at a hearing in the U.S. Congress. “We’re not considering that at the moment, but as this progresses we’ll look at all the options that we think are important to help particularly SMEs and particular areas of the economy that are impacted by this,” Mnuchin said.

The comments came as U.S. stocks have seen massive losses as investors were spooked by the rapidly spreading coronavirus in the U.S. that could affect businesses and dampen economic growth. Against such a background, “the U.S. government obviously is facing higher pressure to reduce tariffs on Chinese products,” Song Guoyou, Director of Fudan University’s Center for Economic Diplomacy, told the Global Times, noting that if an epidemic develops in the U.S., pressure to suspend tariffs imposed on Chinese imports will increase. The number of cases is expected to rise substantially.

“A very interesting question to watch: Will the war on coronavirus be a turning point for the China-U.S. trade war?” Mei Xinyu, Research Fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times. “If the U.S. wants to help its businesses and consumers, removing tariffs and coming to a reasonable agreement with China is the best option.”

Despite a phase one deal signed in January, the U.S. still collects tariffs of 7.5% and 25% on a total of USD370 billion worth of Chinese products, which have added extra costs for U.S. businesses and consumers. “As businesses are already facing supply chain disruption due to the epidemic, a wise move for the U.S. is to listen to requests from businesses to suspend tariffs, which are themselves a burden for the companies,” said Li Yong, Deputy Chairman of the Expert Committee of the China Association of International Trade. “This is a reasonable and rational decision. It’s not about the trade war. It’s about coping with the viral outbreak,” he added, as reported by the Global Times.

As the virus is now also increasingly affecting the U.S., some analysts are questioning whether the U.S. would be able to hold up its side of the trade deal. The outbreak in the U.S. could dampen economic activities, which could mean it cannot supply products for export to China to meet commitments under the phase one deal, Chinese experts said. Trade consultations should be held to address the emerging issues to avoid bigger disputes or an escalation in tension, they noted. China has increased purchases of U.S. products in the first two months of the year. During the period, China’s imports of U.S. soybeans rose 14.2%, pork 160%, coal 33.1% and crude oil 5.2%, according to the China Merchants Bank. There is a ‘force majeure’ clause in the agreement that addresses situations like the epidemic, but Chinese officials have not invoked the clause despite suggestions. However, given the situation in the U.S., consultations over the clause might be necessary to avoid future disputes and even escalation, experts said.