Nearly $5 billion worth of U.S. medical devices has fallen under the wrath of China’s retaliatory tariffs as of this week, through the latest actions of the ongoing trade war between it and the U.S.
President Donald J. Trump levied 10 percent tariffs Monday on $200 billion of Chinese imports, spurring the East Asian nation to follow through on its
earlier intention to impose 5 to 10 percent tariffs on $60 billion worth of U.S. goods, bringing the total amount of U.S. medical technology exports affected since the beginning of the trade war to $4.7 billion, according to
Forbes.
This latest round of Chinese imposed tariffs added $3.5 billion in impacted medical devices, affecting “almost all remaining U.S. MedTech exports to China in 2017,” said AdvaMed in a presentation at the annual MedTech Conference in Philadelphia, reported Forbes.
The addition of non-tariff measures are also taking their toll in the form of delayed regulatory approval and tendering discrimination.
At the same time, China is also experiencing the burden of U.S. imposed tariffs, with the latest round from the Trump administration increasing the total amount on Chinese imports to more than $250 billion. The build up of these fines on each side continues to escalate fears throughout the medical technology community over their ability to design, deliver and provide solutions for patient care.
“If the trade war continues and escalating continues to grow, there will be more impact,” AdvaMed CEO Scott Whitaker said Monday before attendees at the MedTech Conference.
Animosity between the U.S. and China over trade is not expected to dissipate any time soon in their ongoing standoff, which began earlier this year with a proposal by
Trump to impose a 25 percent tariff on more than 1,300 Chinese products, including medical devices such as MR magnets and CT scanners. He eventually put his plan into action in June, imposing the tariff on $50 billion of imported goods from China.
In response, China issued its own tariffs on U.S. products, with the first wave impacting $34 billion in agricultural, automobile and seafood products. It followed up with another $16 billion in late August, which included $1.125 billion on U.S.-made medical devices, according to
CNBC.
The second, issued as a warning in August, will affect approximately $60 billion in products imported from the U.S., with impacted medical supplies ranging from X-ray tubes to gamma-ray equipment.
Tariffs issued by Trump have primarily targeted components made in China for medical devices, putting certain divisions of the healthcare technology industry at more of a disadvantage than others, such as imaging.
The $200 billion issued by the U.S. is set to increase from 10 to 25 percent at the end of the year, with Trump threatening to levy an additional $267 billion on Chinese products, effectively covering all annual good exports from China to the U.S., according to a
CNN report.
China has yet to issue a response to this matter and is running out of products to target, due to importing a smaller amount than the U.S. Analysts, however, say it could potentially use alternative form of retaliation, including charging even higher tariffs, imposing import quotas, restricting the travel of Chinese citizens to the United States for study and tourism, and slashing taxes for companies affected by the tariffs.
"China is growing concerned that the U.S. motivation is now trying to keep China down and contain it," Timothy Stratford, a managing partner at law firm Covington & Burling in Beijing,
told CNNMoney. "I expect that we're going to have a deadlock for some time."
Though many within the industry would prefer to avoid imposing tariffs on China, some figures have expressed gratitude for the Trump administration's efforts to stand up to China for its unfair trade practices, with AdvaMed chair Nadim Yared, president and CEO of implant device maker CVRx Inc., saying that the president has shone a "spotlight" on unfair trade practices of some multinational enterprises based in the East Asian country.
For the complete list of U.S. tariffs, please click
here.
HCB News will continue to monitor this story and provide relevant updates as they occur.