Coronavirus to dent 1Q GDP, but US economy in 'good shape': Larry Kudlow

There are more than 80,000 coronavirus cases across the globe

The spreading coronavirus could have a negative impact on GDP, but prudent action on behalf of the Trump administration is likely to keep the U.S. economy in good shape, National Economic Director Larry Kudlow said Tuesday.

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During a gaggle with the media, Kudlow said that while there are risks associated with the spread of the virus – so far there are no major red flags.

“This is going to clip something off first-quarter GDP,” Kudlow said. “How much? I don't know. You know, it's funny. Again, we'll know more in the next two or three weeks. And the quarter is not quite two-thirds completed, but frankly, the incoming data is pretty good.”

Kudlow added that there is a supply chain “risk” – considering China is such an important market within the global economy – but that the U.S. economy “is in very good shape right now.”

As previously reported by FOX Business, the ongoing trade war between the U.S. and China may have actually helped prepare the U.S. economy for the current situation, since it had been diversifying its supply chain away from China.

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The Trump administration asked Congress for $2.5 billion to combat the disease, including funds for preparedness and response, as well as about $1.2 billion for vaccine research and development.

The outbreak, which has stretched across the globe, has affected more than 80,000 people. There have been at least 2,700 deaths.

Health and Human Services Secretary Alex Azar said Tuesday that it's deeply concerning to see new cases outside of Asia.

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U.S. stocks extended losses on Tuesday after economic fears connected to the spread of the illness caused a selloff on Monday. Iran, Italy and South Korea all reported new confirmed cases.

In terms of the stock market, Kudlow said long-term investors should “take a good hard look at whether they want to add to their positions in the stock market.”

According to the Centers for Disease Control and Prevention, as of Monday there were 14 confirmed cases in the U.S. – and 36 cases from individuals repatriated from the Diamond Princess Cruise ship – in addition to three cases where people had been repatriated from Wuhan, China, where the virus originated.

The CDC warned Tuesday that the disease may spread within the U.S.

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