Several lawsuits seek monetary damages from the Chinese government for the COVID-19 pandemic. Politicians seem to like the idea, too. South Carolina Senator Lindsey Graham said, “If it were up to me the whole world would send China a bill for the pandemic.” Tennessee Senator Marsha Blackburn thinks China should forgive the portion of our national debt it holds. Should anyone take financial blame here?
The lawsuits face an enormous hurdle in sovereign immunity. With limited exceptions, Americans cannot sue foreign governments based on a doctrine built into international treaties. I am not a lawyer, so I will not prognosticate on the lawsuits.
The new coronavirus originated in bats and began infecting people in Wuhan, China, in late 2019. This does not, to my mind, create liability. Viruses periodically jump from animals to humans; and each time, it happens somewhere. Should we have been financially liable for the 2009 H1N1 swine flu and 1918 Spanish flu pandemics which originated here?
China initially denied the existence of the new virus and downplayed its spread. Yet this is not without precedent. The Spanish flu began in U.S. Army training camps. Even as hundreds of soldiers fell ill, units were sent to France with no warning offered, spreading the illness worldwide. The ensuing pandemic claimed an estimated 50 million lives.
International health experts have also made misstatements. The World Health Organization (WHO) equivocated on person-to-person transmission until late January and did not declare a global pandemic until March 11. The Centers for Disease Control (CDC) thought that isolating symptomatic travelers from China and very limited testing could contain the virus. The CDC only recently acknowledged the value of masks despite weeks of reports about presymptomatic and asymptomatic transmission.
China has almost certainly underreported numbers of cases and deaths. But so have other nations. Medical experts believe that the case fatality rate for COVID-19 is perhaps 1%. The official fatality rates currently are 4.1% in the United States, 12.8% in the United Kingdom and Italy, and 15.3% in France. These rates imply underreporting of cases by factors of four to fifteen. Pneumonia deaths among persons never tested are not necessarily getting attributed to COVID-19.
Health data is very inaccurate, even with our enormous medical establishment. The “fog of war” is thick during a pandemic. Misstatements must go well beyond the pale to rise to intentional distortion.
I think China can be fairly criticized for not fully cooperating immediately with the CDC and WHO. Emergent new viruses challenge humanity’s collective medical knowledge. The novel coronavirus’s DNA was posted on January 10, greatly assisting medical researchers. Still, every day matters with a new virus; the brightest medical minds must get to work as soon as possible.
COVID-19 will result in a fragile environment for international trade and global society. The novel coronavirus will not disappear once the current outbreak is controlled. Pandemic potential will exist until the virus circulates widely or a vaccine is developed. One contagion model suggests that 97% of Americans will not have had COVID-19 after this outbreak. Our current disaster could be repeated many times over.
Reopening the American economy without triggering a new pandemic will require great care. Reopening international trade and travel will require even greater care and trust: an outbreak in any nation could ignite a repeat. I suspect Americans and Europeans will not accept a significant renewed pandemic risk due to trade and travel.
China is very significant in the global economy but the Chinese government’s lack of transparency has eroded the trust necessary for globalization. Will we trust China to be truthful so any renewed outbreak can be contained? I suspect not, with real economic consequences.
The global economy makes us wealthier and our lives richer. Globalization has drawbacks, but overall it is a very positive force for humankind. Loss of the trust globalization requires may be the most significant economic cost of COVID-19.
Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.
