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Paul Ashworth, chief North American economist, Capital Economics

“It takes somewhere between two and four weeks for a cargo container to travel from China to the U.S. and certainly, it is a full month by the time you unload the cargo and get it to go where you want. We’re in the fourth week of the Chinese shutdown, so, soon, you’re going to start seeing how severe the supply chain disruption could be for North American companies,” said Paul Ashworth, chief North American economist at Capital Economics.

“It is the indirect effect through the supply chain of goods and commodities that will adversely impact our economy,” Alexander said. “If there is a product our importers are trying to sell in the domestic market and the shipments aren’t arriving, that creates major inventory challenges,” he added.

For example, says Alexander, a Canadian company selling inputs to an American business could be affected if demand from that U.S. business declines.

“This is exactly what we saw in the U.S.-China trade war. Tariffs on Chinese goods did not just impact Chinese businesses, they had a ripple effect on Canada,” he said.

According to Ashworth, it is still too early for the coronavirus effect to show up in North American economic data, but a recent survey conducted by Capital Economics in mid-February indicated there had been no impact yet on U.S. consumer confidence.

Photo by Bloomberg file photo

So far, the economic impact of coronavirus has been seen most significantly in the commodity sector, given that China is a massive importer of raw materials and that the price of commodities are set in world markets. Oil prices, for instance, have fallen by almost five per cent since the virus emerged, to US$51 per barrel as of Wednesday.