As worries over the spread of the new coronavirus intensify, many businesses in Washington state said they’re monitoring the situation closely, taking precautions to protect their employees’ health and adjusting other plans.
Some major employers are halting travel or postponing opening offices in Asia. Real estate brokers say they’re seeing fewer Chinese home shoppers.
And local industries already hard hit by the U.S.-China trade war, like agriculture and tourism, are forecasting continued strain on profits. Nearly 18 months of retaliatory tariffs have cut exports through Washington state to China, its biggest trading partner, by nearly 40% since 2018.
The coronavirus outbreak — which public health experts predict could soon be a global pandemic — may send trade volumes plummeting further, said J. Norwell Coquillard, executive director of the nonprofit Washington State China Relations Council.
The new coronavirus, which seems to be less lethal than SARS but spreads more easily, has infected more than 17,000 people in at least 23 countries, leaving more than 400 dead, as of Monday. Nearly all the deaths are in China, where the new virus originated.
As of Monday, 11 people in the United States had tested positive for the virus, including one in Washington. None of them has died, and the Snohomish County man who was the only positive case in Washington has been released from an Everett hospital.
State and local officials, and some local exporters, say it’s still too early to assess the outbreak’s full economic impacts on trade. One local equipment exporter said it won’t know the full effect until its Chinese partners and customers return from the Lunar New Year holiday, which has been officially extended into the second week of February in the hopes of containing the outbreak.
Meanwhile, government-imposed travel restrictions and fear of infection have left streets in major Chinese cities eerily empty — a particularly troubling visual for Washington exporters who rely on Chinese demand for American products like soybeans and cars to support jobs, said Robert Hamilton, trade policy advisor to Gov. Jay Inslee.
The U.S. and China signed a preliminary deal to end their long-running trade war Jan. 15. Now, Chinese officials’ focus on containing the coronavirus outbreak could prolong efforts to restore trade between the two superpowers — continuing to put the pinch on Washington exporters.
F.C. Bloxom Co., a Seattle-based trading firm that ships agricultural goods between the U.S. and China, among other countries, said inquiries from Chinese buyers for apples and other produce are down substantially from usual winter levels. That’s partly a result of the trade dispute, but the change also reflects the coronavirus outbreak stifling Chinese consumer spending while also shutting down many Chinese businesses, including trading firms.
“From what we’re hearing from our customers, people are just not going out of their houses,” said Brian Bernard, Bloxom’s export and import manager.
And because few Chinese people are traveling, forecasts are grim in the local tourism sector.
Visit Seattle, a trade group, projects up to a 25% drop in Chinese visitation to the Seattle area in 2020 due to the outbreak — a huge hit, given that China has been the biggest source of overseas visitors to the Seattle area since 2010.
In 2019, nearly 176,000 Chinese visitors spent $220 million in King County, or 11% of the $2 billion spent by international visitors statewide, according to Visit Seattle estimates.
Last year’s numbers were already down 9% from 2017, in part because of U.S. trade tensions with China, said Tom Norwalk, the group’s president and CEO.
Prior to the coronavirus breakout, “we were projecting a rebound” from trade-related impacts, Norwalk said. Now, “we’re going in the opposite direction.”
The timing of the coronavirus outbreak, though, has one silver lining for consumers. The first cases of coronavirus were confirmed just before the Lunar New Year, when much of China shuts down anyway. Anticipating a normal holiday slowdown, factories pushed out plenty of product in December and January.
“The shelves in America should be fairly well stocked,” Coquillard said.
But even in sectors less affected by the trade war and Chinese consumer demand, the pace of face-to-face business has slowed as companies postpone travel between Washington and China in response to federal restrictions and health concerns.
On Friday, the U.S. took the unprecedented step of denying entry to some foreign nationals who had recently visited China and imposing a 14-day quarantine on returning American citizens.
Amazon, based in Seattle, and Microsoft, based in Redmond, have halted nonessential business travel to and from China for the near future. Boeing will delay reopening offices in Asia after the New Year holiday while it tracks the spread of the coronavirus, a spokesperson said.
Those three companies and Seattle-based Expedia said they’re monitoring the situation closely to ensure the safety and health of employees and their families.
Companies like Amazon that employ Chinese nationals on H1-B visas face special challenges as employees return to the U.S. after visiting family over the Lunar New Year holiday.
Amazon instructed workers who have recently returned from China or think they may have been exposed to coronavirus to work from home for 14 days.
Starbucks has been particularly hard hit by the outbreak. China is the Seattle company’s second-largest market. The company said last week it had temporarily closed more than 2,000 stores in China — more than half of its total there.
Its shares tumbled by nearly 10% in the week ending Monday, the most of any large Seattle-area company. A spokesperson declined to comment.
Meanwhile, in real estate, concerns over the coronavirus, coupled with ongoing political unrest in Hong Kong, may actually boost demand among wealthy Chinese buyers for Seattle-area homes, said Dean Jones, owner of Realogics Sotheby’s International Realty, in an email.
In past years, local housing markets have seen substantial interest from Chinese buyers looking for second homes, investment properties or somewhere for their children to live while attending college.
Since the first coronavirus cases were confirmed three weeks ago, brokers have reported a decline in the number of Chinese home shoppers trekking to Seattle to look at potential pads for themselves — but not necessarily a decline in interest.
Even before the U.S. closed its borders to foreigners who had recently been in China, Windermere broker Teck Chu said as many as six of his Chinese clients had canceled home-shopping trips to Seattle.
“Part of the concern is the flights themselves,” he said. “They don’t want to jump on the plane, share the same air for seven or 10 hours.”
But Chinese buyers stymied by border closures and flight stoppages are continuing to put offers on Seattle-area homes, even sight unseen, brokers said.
In fact, Chinese home shoppers are used to making offers on American real estate without setting foot in the country — in Chu’s experience, as many as 20% rely on video tours. He expects that proportion to rise in the coming months.
Windermere broker Miao Sui said all of his upcoming showings with Chinese clients, who make up the bulk of his business, have been canceled. He doesn’t expect to log any sales in February. That’s fine by him, he said.
“Some clients got on the last flight out of China, but I don’t want to show houses to them,” he said. “I don’t want to get sick.”
Sui said he has a more pressing concern than selling homes: His parents, who flew to Seattle to visit him from their home in northern China several months ago, are now stuck here until early April due to flight cancellations between the U.S. and mainland China.
“The world will be back to normal someday,” he said.
Seattle Times business reporter Dominic Gates contributed to this story.