Proposed China tariffs target dozens of medical products
- Steep tariffs proposed by the Trump administration on goods imported from China would also target dozens of medical products, potentially raising costs at a time when rising healthcare spending has become a national concern.
- A 25% duty would be placed on vaccines, insulin products and certain raw ingredients for pharmaceuticals shipped in from China, according to a sweeping list released April 3 by the Office of the U.S. Trade Representative detailing which products would be affected by the new tariffs.
- Targeted products also include medical devices such as MRI and X-ray equipment, pacemakers and defibrillators. A public notice and comment period on the proposed list extends until May 11, and a public hearing is set for May 15.
Most of the active pharmaceutical ingredients used to manufacture drugs for use in the U.S. are imported from abroad. China and India are the chief suppliers, boasting large generic industries that churn out the raw chemicals tucked inside pills and other medicines.
In recent years, however, China has made a concerted effort to advance its life sciences industry, aiming to move up the value chain toward development of novel drugs and biologics. High-tech sectors like gene and cell therapy have grown rapidly and China can now boast dozens of clinical trials testing technologies like CRISPR and CAR-T.
The list released by the USTR makes clear the broad scope of the Trump Administration's proposed tariffs on Chinese goods. All told, approximately $50 billion worth of annually traded products are set to face the new duty, aimed, in part, at reducing the U.S. trade deficit with China.
Notably, the tariffs will specifically target industries China has marked as key areas for future economic growth under a "Made in China 2025" policy blueprint — one of which happens to be medicine.
Tariffs on active pharmaceutical ingredients, such as the proposed duties on thyroid hormone or epinephrine, could raise costs for U.S. consumers — particularly for generic medicines, which have lower margins on the cost of goods used.
"We are concerned that the proposed tariffs may lead to increased costs of manufacturing for generics and biosimilars and thus higher prescription drug prices for patients in the U.S.," said the Association for Accessible Medicines, a trade lobby for the generics industry, in an April 4 statement.
The proposed list emerged from an investigation conducted by USTR at the direction of President Trump. Findings from the study, published in March, criticized actions by China to intervene in operations of U.S. companies and acquire intellectual property in those key industries.
In 2017, the U.S. reported a trade deficit of $375 billion in goods with China, up $28 billion from the year previous.
Editor's note: This article has been updated to include comment from the Association for Accessible Medicines.
- U.S. Trade Representative Proposed tariff list
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