Virus surge makes US weak link in global economic recovery

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FILE - In this Feb. 24, 2019 file photo, model Arizona Muse, left, is flanked by designer and Officina del Poggio owner Allison Hoeltzel Savini as they present a creation of the Officina del Poggio women's Fall-Winter 2019-2020 collection, in Milan, Italy. The United States fumbling response to the pandemic is casting doubt on its economic prospects and making it one of the chief risks that could undermine the rebound. Officina del Poggio sells 60% its vintage motorcycle-inspired satchels to U.S. customers. (AP Photo/Luca Bruno, file)

FRANKFURT – People in China are back to buying German luxury cars. Europe's assembly lines are accelerating. Now the global economy is waiting for the United States to get its coronavirus outbreak under control and boost the recovery, but there's little sign of that.

The United States’ fumbling response to the pandemic and its dithering over a new aid package is casting doubt on its economic prospects and making it one of the chief risks to a global rebound.

After springtime restrictions, many U.S. states prematurely declared victory over the virus and began to reopen their economies, leading to a resurgence in COVID-19 cases. Confirmed infections are rising in most states, and many businesses have had to scale back or even cancel plans to reopen. And while it does not dominate global commerce like it did 20 years ago, America is still by far the biggest economy - accounting for 22% of total economic output, versus 14% for No. 2 China, according to the World Bank.

That makes its handling of the pandemic and its economy crucial for companies like Officina del Poggio, a producer of luxury handbags in Bologna, Italy, that sells 60% its vintage motorcycle-inspired satchels to U.S. customers.

Company owner Allison Hoeltzel Savini said retail sales dried up during the spring. She had already suffered a blow when Barneys, her main client, went bankrupt and didn't pay for the spring-summer collection that had shipped.

Hoeltzel Savini said she has had to hold off on new hires, and hasn’t been able to do her usual sales trip to the United States. She recouped some sales by reaching out directly to customers through newsletters and social media during the height of Italy’s lockdown, but remains cautious about the future, as the U.S. market for her goods continues to slow down.

"I am really concerned for the next season, if wholesale clients will be placing orders,’’ she said.

Same for of Shenzhen Aung Crown Industrial Ltd., which makes baseball hats. The company usually sells about 60% of its output to the United States. “We can’t afford to lose the U.S. market,” said general manager Kailyn Weng. “It is difficult to find other markets that could digest such a great amount of high-quality hats ... We have no alternative but to focus on the U.S. market."