- Without tariffs, the U.S. would be in “a better position in this bidding game” with so many countries scrambling to import critical medical products from China, said Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations.
- Some $3.3 billion in imports of critical health care products still face 7.5% tariffs, while $1.1 billion of imports bought that could potentially treat Covid-19 remain subject to Trump’s 25% tariffs, according to data from the Peterson Institute of International Economics.
- “The administration’s tariffs on Chinese medical products may contribute to shortages and higher costs of vital equipment at a time of nationwide health crisis,” wrote PIIE’s Chad Bown in a report dated March 13.
U.S. tariffs on imported medical equipment, particularly from China, have added to the struggle in America’s fight against the coronavirus outbreak.
The U.S. and China have been embroiled in an escalating tariff war since 2018. Across multiple rounds, tariffs were levied on essential medical supplies from China including medical protective clothing, personal protective equipment (PPE), CT systems and disposable medical headwear.
Meanwhile, the fast-spreading coronavirus disease has led to cases growing at a rapid pace throughout the world including the U.S., which is now the country with the highest number of reported cases and deaths. There are currently more than 555,000 reported cases, and over 22,000 deaths in the U.S., according to the latest data by Johns Hopkins University.
Compared to other countries with a “more flexible” approach toward importing PPEs, imposing tariffs has “further undermined U.S. preparedness and response to the outbreak,” Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations, told CNBC in an email.
Without tariffs, the U.S. would be in “a better position in this bidding game” with so many countries scrambling to import critical medical products from China, he added.
States across the U.S. have reported that the number of intensive care unit beds are running out, while New York City Mayor Bill de Blasio has warned that respirators could run out soon as the city’s hospital resources are stretched.
With the outbreak intensifying in large cities and states, health-care workers have also been scrambling for protective gear and struggling with a shortage of medical equipment as the number of cases surge.
Threat to war against pandemic
China started to ramp up production of critical medical equipment as the disease spread in January. It reportedly accumulated a large surplus of personal protective equipment, which American health-care facilities now have a “pressing need” for, Susan Shirk, a former deputy assistant secretary of state under the Clinton administration, said in an email to CNBC.
“Any obstacle in the way of expeditious imports of this equipment could cause more people to die of the disease,” added Shirk, who is currently a research professor at University of California San Diego and also the chair of the university’s 21st Century China Center.
In an earlier report, Peterson Institute for International Economics (PIIE) warned that President Donald Trump’s trade war with China could threaten to “cripple” the U.S. fight against the coronavirus pandemic.
As of March 13, when the report was published, the think tank found that $3.3 billion in imports of critical health-care products still face 7.5% tariffs, while $1.1 billion of imports which could potentially treat Covid-19 remained subjected to 25% tariffs — even after the Trump administration cut and suspended some tariffs temporarily.
“The administration’s tariffs on Chinese medical products may contribute to shortages and higher costs of vital equipment at a time of nationwide health crisis,” wrote the author of the report, Chad Bown.
He said Trump’s trade policies have forced Beijing to sell many of its medical products to other countries instead of to the U.S. Some of these products include protective gear for doctors and nurses and high-tech equipment to monitor patients.
According to PIIE data, about $100 billion in intermediate inputs from China still face 25% tariffs, raising costs of parts and components for U.S. medical product manufacturers.
The Wall Street Journal also reported that General Motors was seeking tariff relief on some categories of ventilator parts originating from China that were facing 25% tariffs, to “ease the burden” of ventilator production that would support Washington’s response against Covid-19.
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