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19-06-2025
SHANGHAI: Drug research and development firms in China including WuXi AppTec, opens new tab and WuXi Biologics, opens new tab are changing project plans, stockpiling supplies and discussing testing locally, said sources with knowledge of the matter, as they seek to mitigate the impact of US-China trade tensions.
China’s sprawling pharmaceutical research and manufacturing sector serves global drug giants such as Pfizer, opens new tab and AstraZeneca, opens new tab with a low-cost development model that often uses imported clinical samples, equipment, chemicals and other materials to conduct work.
Fears of delay in access to US supply chains and raised import tariffs are spurring biotech and pharmaceutical companies to avoid, pause or consider delaying the start of projects, according to three sources.
They are also discussing testing US clinical samples in the US, instead of sending them to China for further research, a move that could increase costs, and requesting additional supplies for backup, three other sources said.
The six sources who spoke to media are director or executive-level employees involved in various aspects of the industry in China including research and development, manufacturing and supply chains.
All but two agreed to speak only on condition of anonymity because of concerns about effects on fundraising plans or they were not authorized to speak to media. The developments have not been reported previously.
US and Chinese officials said last week they had agreed on a framework to put a May trade truce back on track and remove China’s export restrictions on rare earths, but offered little sign of a durable resolution to longstanding trade differences that have affected products ranging from semiconductors and jet engines to medical equipment and pharmaceuticals.
“What kind of long-term policy it could be, you know, what kind of tariff it would be in half a year, in one year… nobody knows and that’s the problem. That’s what makes everybody worry and nervous,” said Chen Gong, co-founder of NeuExcell Therapeutics, a biotech with its main operations in Suzhou.
He said the US-China trade tensions had made him more cautious about investing in a clinical trial and the company would delay its start if it did not have sufficient funding.
Reliance on US imports has come into particular focus as trade tensions escalate. In 2024, the US exported diagnostic and laboratory reagents to China valued at about $1.4 billion and prepared culture media for the development or maintenance of microorganisms worth about $125 million, UN Comtrade data showed.
In a sign of the importance of some of the imports and the damaging effect disruption could have on China’s healthcare industry, some US-made goods including diagnostic reagents from Germany’s Siemens Healthineers, opens new tab were exempted from raised Chinese tariffs, that company said in May.
China raised its tariffs on US imports to as much as 125% though it has since reduced that to 10% while it works out a more permanent trade deal.
WuXi AppTec and a Chinese biotechnology firm that was its research client agreed in May to switch US-made reagents they had been using for a Hepatitis B virus pre-clinical research project into non-US versions due partly to concerns about higher costs from tariffs, a source at the client company said.
The project had been temporarily paused during the discussions, which began prior to May, the source said.
WuXi AppTec said it makes “every effort to avoid disruptions or delays in the delivery of services to customers.” (Int’l News Desk)
