Effect of the escalating China–US trade war on health care

Abstract

After the 11th round of negotiations failed to reach an agreement, the China–US trade dispute began to escalate. In addition to adding tariffs on imported goods, totalling hundreds of billions of US dollars, the dispute has expanded into the fields of technology and education and will inevitably affect the downstream health-care industry, influencing price, quality, technology, research, and education. For imported medical products that are irreplaceable to domestic or third-party manufacturers, tariffs increase the burden of health-care costs on domestic patients and medical funds, and thus both the Chinese and US Governments avoid taxing them. The US Government exempted crude drugs, pharmaceutical preparations, and low-end medical devices from the original tariff list,1Office of the United States Trade RepresentativeSection 301 investigations.https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-china/record-section-301Date: 2019Date accessed: May 30, 2019Google Scholar and the Chinese Government excluded drugs (both those for treatment and prevention) from taxation and has removed tariffs on most imported drugs.2The State Council of the People's Republic of ChinaAnnouncement of the Customs Tariff Commission of the State Council on increasing tariff rates for certain imported goods originating in the United States.http://www.gov.cn/xinwen/2019-05/13/content_5391208.htmDate: May 13, 2019Date accessed: May 30, 2019Google Scholar However, the US Government does impose a 25% tariff on high-end medical devices from China, and the Chinese Government imposes a 5–25% tariff on high-value consumables and some medical devices from the USA. The shift of the cost of these devices and consumables to health-care services could affect care accessibility for people with low incomes. Replacement medical devices and consumables could be used to avoid tariffs, but these replacements might not be of equal quality and might increase the risk of misdiagnosis and unsuccessful treatment.3Du J Zhang J Fan Y Huang D China–USA trade dispute could affect health care.Lancet. 2018; 392: 1622-1623Summary Full Text Full Text PDF PubMed Scopus (2) Google Scholar Furthermore, the US Government has included some Chinese companies in the export control entity list, which prohibits US companies from selling to them.4US Department of CommerceDepartment of Commerce announces the addition of Huawei Technologies Co. Ltd. to the entity list.https://www.commerce.gov/news/press-releases/2019/05/department-commerce-announces-addition-huawei-technologies-co-ltdDate: May 15, 2019Date accessed: May 30, 2019Google Scholar In response, China is likely to restrict the export of rare earth minerals and products (such as permanent magnets) to US companies, which would affect the automobile, defence, and electronics industries. Technology, minerals, and products from both China and the USA are an indispensable part of the global health-care industry, and changes in the supply chain will ultimately affect health care. For example, Huawei is one of the world leading developers of 5G technology, and the sanctions enforced by the US Government against the company might affect the development of 5G networks and the global use of the communication technology in telemedicine (where it has been used successfully in China) and in other medical technologies. The US Government has not only banned Huawei in the USA, but it has also lobbied other countries not to use the technology. In May, 2019, a US university dismissed two Chinese medical researchers,5Malakoff D Emory ousts two Chinese American researchers after investigation into foreign ties.https://www.sciencemag.org/news/2019/05/emory-ousts-two-chinese-american-researchers-after-investigation-foreign-tiesDate: May 23, 2019Date accessed: May 30, 2019Google Scholar and members of the US Congress are preparing to legislate to restrict Chinese students from studying biotechnology and advanced medical care in the USA.6CNBCUS lawmakers want to tighten visas for Chinese students and researchers.https://www.cnbc.com/2019/05/15/us-lawmakers-want-to-tighten-visas-for-chinese-students-researchers.htmlDate: May 14, 2019Date accessed: May 30, 2019Google Scholar These discriminatory measures might hinder innovation and dissemination of medicine and influence the use of new technologies and knowledge in health care, and this effect is not limited to China and the USA. The two countries have tried to avoid disputes that directly affect national health care. However, as the trade war expands into a technology ban, the indirect effect on health care extends to the rest of the world. We hope that China and the USA will reach an agreement on this trade dispute as soon as possible to improve and safeguard health care for their citizens. I declare no competing interests.