Covid-19 fight rocks business world as White House freezes passenger traffic between U.S. and Europe

President Trump on Wednesday roiled the business world by suspending major travel patterns in an effort to combat the international coronavirus contagion, announcing that the White House would restrict the flow of passenger traffic between the U.S. and Europe for 30 days beginning Friday.

The act of curtailing international travel between the U.S. and Europe could send ripples through a global economy that is already facing unpredictable conditions in coming months as a result of ongoing trade wars, a global manufacturing slowdown, and the pending U.S. Presidential election.

When first announced, the policy appeared to freeze freight trade as well as passenger traffic, a change that would have had seismic implications for supply chains worldwide. “There will be exemptions for Americans who have undergone appropriate screenings, and these prohibitions will not only apply to the tremendous amount of trade and cargo, but various other things as we get approval. Anything coming from Europe to the United States is what we are discussing," Trump said in an official transcript.

However, Trump soon walked back his original statement in a social media tweet sent shortly after his address. "Please remember, very important for all countries & businesses to know that trade will in no way be affected by the 30-day restriction on travel from Europe. The restriction stops people not goods," Trump wrote in a tweet. In its latest version, the passenger travel restriction seems to apply "to foreign nationals who have been in 26 European countries with open borders agreements, in the last 14 days," while U.S. citizens will be directed to specific airports for screening, Trump said in another tweet.

The wide policy swings come as longstanding trade flows in air and ocean trade have already been disrupted in recent weeks by broad closures of factories and ports in China, following the combination of Asia’s Lunar New Year with China’s sweeping efforts to impose social quarantines to slow the spread of the disease. Even before Trump’s remarks, industry figures and academics were predicting that those moves would soon trigger severe shortages in sectors such as automobile parts, consumer packaged goods, and pharmaceutical supplies.

Trump delivered his series of remarks just hours after the World Health Organization (WHO) declared that Covid-19, the deadly, flu-like illness caused by the coronavirus, had jumped from being a regional sickness into the category known as a full pandemic. Measured by its effect on people, the number of cases of Covid-19 outside its origin in an outdoor food market in Wuhan, China, late in 2019 has now increased 13-fold in the past two weeks alone, the WHO said. That lighting-fast spread has ravaged populations with more than 118,000 cases in 114 countries, leading to 4,291 deaths and putting thousands more patients in hospitals.

While more than 90% of those cases are in just four countries—China, Iran, Italy, and the Republic of Korea—the virus has the hair-trigger potential to spread quickly. “In the days and weeks ahead, we expect to see the number of cases, the number of deaths, and the number of affected countries climb even higher,” WHO Director General Tedros Adhanom Ghebreyesus said in a statement.

In reaction to that threat, the WHO urged countries to act quickly to avoid further spread. “We cannot say this loudly enough, or clearly enough, or often enough: all countries can still change the course of this pandemic. If countries detect, test, treat, isolate, trace, and mobilize their people in the response, those with a handful of cases can prevent those cases becoming clusters, and those clusters becoming community transmission,” Ghebreyesus said.

Trump spoke in a televised address the same day as the dire WHO appraisal. “To keep new cases from entering our shores, we will be suspending all travel from Europe to the United States for the next 30 days. The new rules will go into effect Friday at midnight. These restrictions will be adjusted subject to conditions on the ground,” Trump said.

Editor's note: This article was revised on March 12 to reflect updated policy statements from Trump.

Hoping to get the payroll tax cut approved by both Republicans and Democrats, and please remember, very important for all countries & businesses to know that trade will in no way be affected by the 30-day restriction on travel from Europe. The restriction stops people not goods.

— Donald J. Trump (@realDonaldTrump) March 12, 2020