States File Lawsuit Against China for COVID-19




The exact origin of the COVID-19 outbreak is still to be determined as there have been various theories proposed. What is beyond dispute is that the coronavirus began in China and spread all around the world, sickening millions of people thus far. Many have pointed a finger at China for its actions or inactions in causing the virus to spread. Now, some states in the U.S. who are beset by COVID-19 costs have filed lawsuits against China seeking to get them to pay for the impacts of COVID-19. While these lawsuits may prove a point, there is little chance that these states will actually see money from China now or in the future.

Missouri was the first state to file a COVID-19 lawsuit against China. One day later, it was followed by Mississippi. It is likely that more "red states" will follow suit as this has now become a political issue. Previously, several conservative gadflies had filed their own lawsuits against China regarding COVID-19.

Missouri's lawsuit was filed in federal court in Missouri. The lawsuit is seeking to have China pay the State of Missouri its costs in dealing with the COVID-19 virus. The pandemic has caused states to incur large expenses to deal with the public health crisis. In addition, states have had to bear terrible fiscal consequences as their tax revenues have cratered at the same time that their expenditures have skyrocketed.

Missouri Blames China for the Costs of COVID-19


The complaint goes into a long discussion of the way that China handled the outbreak of the virus. It claims that China hid the true nature of the pandemic and failed to adequately prevent COVID-19 from spreading both domestically and internationally. Missouri accuses China of covering up the fact that the virus could be transmitted through human-to-human contact. At the same time, China allegedly kept the U.S. government and all other world governments in the dark about what was happening in this country, even going so far as denying a U.S. team the necessary permission to enter Wuhan. As a result, nobody was able to take effective action to keep the pandemic from spreading around the world.

The lawsuit also accuses China of hoarding personal protective equipment and keeping the rest of the world from being able to buy this crucial protection. Missouri accused China of nationalizing factories that made the PPE for shipment to America.

While many in the U.S. are fighting about who is to blame for the devastation caused by COVID-19, nearly every commentator can agree on the fact that Missouri faces extremely long odds of ever getting a penny from China. Simply stated, China will not be venturing into federal court in Missouri to defend itself on this issue.

Foreign states enjoy sovereign immunity from lawsuits in the U.S. There are some limited exceptions to this doctrine. One way that these states have tried to use to get them around the doctrine of sovereign immunity is to file a lawsuit against the Chinese Communist Party. Even though the Communist Party runs the country, Missouri is trying to take advantage of the legal distinction between the two to hold someone in China accountable for the damage caused by COVID-19.

Missouri Will Likely Never See a Penny from China for Coronavirus Costs


However, even if states manage to obtain a judgment against China, they would run into several more legal issues. The first is how to calculate what China would owe in restitution. There are estimates of a cost as much as $4 trillion which would be a large part of the entire Chinese economy.

Some have suggested that the U.S. simply refuse to pay the debt that it owes China in the form of Treasury Bonds. However, this would bring the financial system around the world to its knees and cripple this debt-ridden country. Nobody would ever lend the U.S. money in the future. The U.S. could try to add tariffs onto Chinese goods to pay for the damage caused by COVID-19, but China would soon retaliate, causing another economic recession. Seizing Chinese assets would leave U.S. assets in China vulnerable to Chinese retaliation.

The attorneys general who filed this lawsuit likely know that they will never recover money from China, even if they are responsible. What they are after is a political win and a declaration that it was China who was responsible for the devastation that coronavirus has caused throughout the world.



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