Coronavirus: Unemployment at 20% would be 'absolute worst case', says Trump

Trump addresses a daily coronavirus response briefing at the White House in Washington. PHOTO: REUTERS

WASHINGTON (AFP) - US President Donald Trump downplayed warnings that the US unemployment rate could spike to 20 per cent due to the coronavirus pandemic, saying on Wednesday (March 18) that the economy is "nowhere near" that point.

With the US economy shutting down as more businesses are forced to close, Treasury Secretary Steven Mnuchin reportedly warned Republican senators the jobless rate could reach 20 per cent - more than double its peak during the 2008 economic downturn - without a massive government stimulus programme.

Trump said he did not agree with the estimate, calling it "an absolute total worst-case scenario."

"We're nowhere near it," he told reporters at the White House.

As his administration presses for rapid approval by Congress of a US$1.3 trillion (S$1.8 trillion) emergency spending package to ease the economic pain from the coronavirus pandemic, Trump said he ordered the suspension of evictions and mortgage foreclosures for six weeks.

The Department of Housing and Urban Development (HUD) "is providing immediate relief to renters and homeowners by suspending all foreclosures and evictions until the end of April," the president said.

No details on the announcement were immediately available and it was unclear if it would extend to private home mortgages as well, but HUD is expected to release more information later in the day.

However, Trump said there is "no reason" to consider suspending tariffs on goods imported from China as part of the effort to ease the economic damage caused by the coronavirus pandemic.

Repeating the incorrect claim that China is paying the import duties actually paid by American firms and individuals, Trump said that Beijing had not asked for US tariffs to be suspended.

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"China's paying us billions and billions of dollars in tariffs, and there's no reason to" suspend import duties, he said.

Despite a truce in the long-running trade war reached in January, tariffs remain in place on two-thirds of trade between the economic powers, and economists have said duties on medical products from China could be slowing the virus response.

Chad Bown, a trade expert with the Peterson Institute for International Economics in Washington, who has closely tracked Trump's damaging multifront trade wars, said tariffs on US$5 billion on medical goods from China are now contributing to shortages.

"In the last two years, Trump's policy has forced China to divert the sales of these products - including protective gear for doctors and nurses and high-tech equipment to monitor patients - from the United States to other markets," Bown said in a recent analysis.

But he said the Trump administration acknowledged the danger last week by "quietly" announcing temporary tariff cuts for some of the goods needed to address the pandemic.

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