"From Biosecurity Law to Tariff Bombs"... US ITC Puts Comprehensive Pressure on Chinese Biotech

USITC to Investigate China's Biotech Sector
Anti-dumping and Countervailing Duties Under Consideration

Following the implementation of the U.S. Biosecurity Law, the U.S. government has announced that it will investigate the Chinese government's support and pricing practices for its domestic bio companies, signaling another wave of repercussions for the global pharmaceutical and biotech supply chain.

According to the bio industry and other sources on March 4, the U.S. International Trade Commission (USITC) recently revealed plans to conduct a fact-finding investigation, focusing on how China's state support and pricing policies in the bio sector impact the market share and competitiveness of the U.S. industry. The USITC will hold a public hearing from May 27 to 28 and is scheduled to announce its findings on January 22 next year. The National Security Commission on Emerging Biotechnology (NSCEB), which operates under the U.S. Congress, stated, "We welcome this investigation, and if the USITC determines that the Chinese government manipulated the market to disadvantage U.S. bio companies, it will enable the U.S. administration to take measures to ensure a level playing field."

This investigation is highly likely to lead to the establishment of substantial tariff barriers to protect the U.S. bio industry. Previously, in a report released last April, the NSCEB pointed out that China has been dominating the market by injecting billions of dollars in state subsidies into domestic companies unable to withstand normal market pressures and attracting foreign startups.

The latest U.S. move is expected to put the brakes on the global expansion of China’s pharmaceutical and biotech industries, which have emerged as key players in global drug development. China currently accounts for about 30% of the global innovative drug pipeline, demonstrating its advanced drug development capabilities. However, if the USITC investigation confirms that China has distorted the market through unfair subsidies and excessive supply, the imposition of anti-dumping and countervailing duties (CVD) to protect domestic industries from unfair trade practices is likely to become a reality. Combined with the existing biosecurity law, which blocks contracts with U.S. national security agencies, Chinese biotech firms—their largest source of revenue being technology exports and partnerships with the U.S.—will be directly impacted. As a result, Chinese companies that had expanded their global market dominance through the U.S. commercialization barrier may face severe contraction across their explosive new drug R&D momentum and overall price competitiveness, finding themselves thoroughly isolated from the U.S. supply chain ecosystem, the world's largest market.

This comprehensive U.S. containment is accelerating the restructuring of the global supply chain. The NSCEB analyzed that the introduction of related regulations will provide companies with sufficient time to terminate existing long-term contracts and switch to alternative suppliers based in the U.S. and allied countries, which are considered less risky. In addition to the biosecurity law, the U.S. is considering imposing tariffs on Chinese bio companies under unfair competition investigations, which is heightening tensions among Chinese firms seeking to enter the U.S. market.

There is also speculation that these developments could create a favorable environment for the Korean pharmaceutical and biotech industries, which have solid trust and competitiveness among allied nations. An industry insider commented, "As U.S. companies seek to diversify and reduce supply chain vulnerabilities, the market demand previously concentrated in China is being widely dispersed. This will present a clear opportunity for K-bio companies to establish new partnerships and expand their market share as a direct benefit."

This content was produced with the assistance of AI translation services.