By South China Morning Post | Created at 2024-11-21 23:31:15 | Updated at 2024-11-25 05:56:43
3 days ago
The US profits of Chinese biotech firms, including makers of medical devices, are under threat from the incoming Trump administration’s plans to increase tariffs on Chinese products, as well as a bill that would limit government-funded sourcing of Chinese research and manufacturing services, according to analysts.
However, Chinese companies’ efforts to expand product development and sales of high-value products in China and other overseas markets would cushion the blow, they said.
President-elect Donald Trump has proposed import duties of 60 to 100 per cent on Chinese goods.
“Service providers and [device] manufacturers are likely to be hit the hardest,” said Yurou Zheng, a Morningstar equity analyst. “Many Chinese medical-device makers have been already prioritising emerging markets for global expansion … partially because the US market is already very competitive and mature.”
Chinese medical-device makers active in the US, the world’s largest market for such products, have been subject to a 25 per cent tariff since July 2018 when the previous Trump administration and Beijing were embroiled in a tit-for-tat trade war. The Biden administration kept the tariff in place.
Rising manufacturing costs have also affected Chinese device makers, pushing them to move up the value chain quickly to maintain competitiveness, said Grace Wang, a Shanghai-based partner of L.E.K. Consulting who focuses on the medical-technology sector.
