Dive Brief:
- Illumina has been prohibited from exporting its genetic sequencers to China, a day after the U.S. doubled tariffs on imports of all Chinese goods to 20% in President Donald Trump’s escalating trade war.
- China’s Ministry of Commerce posted the update Tuesday, a month after listing the company as an unreliable entity, paving the way for the ban on imports of its sequencers. In February, China placed Illumina on the unreliable entity list after President Donald Trump ordered a 10% tariff on Chinese imports.
- Illumina is assessing the impact on its operations in China from the Ministry of Commerce announcement and will continue to serve its customers in the country, a company spokesperson said in an email.
Dive Insight:
Illumina generates about 7% of its revenue from China, where it competes with domestic Chinese sequencing companies, according to Leerink Partners analysts.
China’s Ministry of Commerce announcement does not mention Illumina’s reagents used in DNA sequencing, the analysts said in a Tuesday note, but the ban on sequencing machines alone could affect customers’ willingness to buy in China.
“[Illumina] has indicated it aims to keep reagent manufacturing in the [U.S.], so an export ban on reagents would have a more material impact,” the analysts wrote.
The Illumina spokesperson emphasized that the decision by the Chinese government does not prevent the company from operating in the country, which has long supported foreign investors, including Illumina.
“We are committed to operating in compliance with the latest guidelines from the Ministry of Commerce,” the spokesperson wrote.
China’s action against Illumina is a form of retaliation in the tariff war, said Canan Gunes Corlu, a professor at Boston University Metropolitan College, who added in an email that “we are likely to see more of this type of bans.”
Trump’s evolving tariff policy also saw 25% duties on Canada and Mexico go into effect Tuesday, after a month-long pause. The Trump administration claims the higher tariffs are part of an effort to stop fentanyl trafficking and slow immigration. Mexico, Canada and China said they would counter the president’s orders.
On Thursday, Trump announced on the social media platform Truth Social an agreement with Mexico that allows the country to avoid paying tariffs until April 2 on goods that fall under the United States-Mexico-Canada Trade Agreement.
China is retaliating with additional tariffs on U.S. agricultural imports starting March 10.
Healthcare industry groups Advamed and the American Hospital Association have urged the Trump administration to exempt medical devices and supplies from tariffs.
On Wednesday, the U.S. agreed to a one-month tariff exemption on cars entering the country from Canada and Mexico through the USMCA.
