US Tariffs May Push US Biotech Research Firms To Migrate To China

US Biotech Industry
Monkeys collect lotus in a lake to eat as food (Photo: Reuters / Soe Zeya Tun)

The United States is currently one of the leaders in the development of treatments for various diseases thanks to an abundance of biomedical research facilities in the country.

 However, that edge is now in danger of being taken away as research facilities could be forced to go overseas as a direct result of the country's ongoing trade dispute with China.

According to biotech trade experts, US President Donald Trump's proposed 10 percent tariff on more than $300 billion worth of Chinese imports could have a negative effect on the country's biotech industry.

The tariffs will not only affect dozens of consumer items such as vodka, clarinets, and laptops, it would also affect one item that is particularly important to research facilities; live primate test subjects.

US research facilities and laboratories currently import more than 80 percent of their live primate test subjects from China. Imposing a tariff on these live-saving test subjects would pose a big problem for research firms, who could be forced to move their operations outside of the United States.

According to the trade group National Association for Biomedical Research, some biotech companies are already considering moving their operations overseas given the cost implications of additional tariffs.

The cost of acquiring primate test subjects in the United States is already very expensive when compared to other countries, and adding additional taxes will only serve to worsen the situation.

A number of researchers who had already moved to China and other locations have found that obtaining a test subject outside of the United States would cost them as low as $1,500 per animal.

Meanwhile, obtaining the same animal in the United States will costs upwards of $6,000. Slapping an additional 10 percent to that cost would likely be enough to cause some firms to rethink their US operations.

The National Association for Biomedical Research had sent a letter back in June to US Trade Representative Robert Lighthizer explaining to him the possible effects of the proposed tariffs.

In the letter, the trade group explained that the tariffs would drastically reduce the number and scope of US-based research projects. It also outlined the possibility of a mass migration of US research and developments firms to other countries such as China.

The biotech trade group elaborated that the tariffs would actually only serve to accelerate China's "Made in China 2025" initiative, by allowing it to overtake the United States as the world's biotech leader. With research and development firms transferring to China, the country would have a clear edge in the development of new drugs and scientific breakthroughs.

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