US people to pay for medicine levies
The Trump administration’s threat to impose extra tariffs on crude drugs manufactured in China will ultimately harm the interests of the American people, who will have to pay more for the final products made by local firms in the United States, said a leading industry analyst.
Medicines and health products account for approximately 30 percent of the total products on which the US authorities threatened to levy extra tariffs, according to the China Chamber of Commerce for Import and Export of Medicines and Health Products.
The chamber added that the customs tariff codes for export commodities are different between the Chinese and US customs.
Great Wall Securities said the list, which includes insulin, penicillin, adrenaline, diagnostic kit and nuclear magnetic resonance equipment, will not have a significant impact on Chinese medicine manufacturers, as most of the products exported from China to the US are crude drugs, instead of high-tech products.
“China is the largest exporting country of crude drugs. In the short term, the total orders might go down, but in the long term, the impact will be transferred to the local pharmaceutical companies in the US,” said Shi Lichen, an industry analyst and the founder of a third-party medical services platform.
“The price of preparation will increase if the price of crude drugs goes up, and the pressure on the payment of commercial insurances in the US will increase substantially thereafter,” he said.
Meng Dongping, deputy director of the chamber, said it is actively seeking discussions with the US through the Ministry of Commerce. It believes that the US will gradually realize the problem and won’t hurt the fundamental interests of the two countries.
Last year, the total value of medicines and health products exported from China to the US reached $11.17 billion, up 10.9 percent year-on-year. Meanwhile, the total value of medicines and health products imported from the US to China reached 10.83 billion yuan, an increase of 16.4 percent year-on-year, according to data from the chamber.
China has been importing a large amount of high-end medical equipment, pharmaceutical equipment, pharmaceutical preparations and biological preparations from the US, and the rapid growth of imports in the past few years helped to reduce the trade surplus.
“The aging population and other problems in China have further stimulated the rigid demand of imported medicines and health products in the domestic market. We hope more premium products from abroad could enter the China market and provide more benefits to consumers,” Meng said.
... in the long term, the impact will be transferred to the local pharmaceutical companies in the US.”
Shi Lichen, industry analyst