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Trade duties on imported medical equipment, especially from China, complicate the US fight against the coronavirus pandemic.
The US and China have been plunged into an ever-escalating trade war since 2018. Through many rounds of standoff, trade duties have been imposed on key medical supplies from China, including medical protective clothing, personal protective equipment (PPE), high-tech equipment and other medical products..
Meanwhile, the rapidly spreading coronavirus pandemic has led to a rapid increase in incidence worldwide, including in the United States. There are currently over 555,000 cases and over 22,000 deaths in the United States, according to the latest figures from Johns Hopkins University..
Compared to other countries with «more flexible» approach to the import of PPE introduction of tariffs «further undermined the US readiness to respond to the epidemic», Senior Fellow at the Council on Foreign Relations on World Health Affairs told CNBC in an email Yangzhong Huang.
Without trade duties, the United States would be in «best position in this trading game», and many countries will seek to import critical medical supplies from China, he added.
In the US, it is reported that the number of beds in intensive care units is coming to an end, and the Mayor of New York Bill de Blasio warned that the supply of respirators could be exhausted in the near future.
Due to the sharp increase in the number of cases in large cities, health workers are demanding to provide them with protective suits and medical equipment as the number of cases increases.
China began ramping up production of critical medical equipment as the epidemic spread in January. The country is said to have amassed a good stock of personal protective equipment, in which American healthcare facilities are now testing «urgent need», stated in an email to CNBC Susan Shirk, former Deputy Assistant Secretary of State for Administration Bill Clinton.
«Any obstacle to the prompt entry of this equipment could lead to the death of more people from the disease.», – added Shirk, who is currently a professor at the University of California at San Diego and head of the 21st Century China Center.
In an earlier report, the Peterson Institute for International Economics (PIIE) warned that the president’s trade war Donald Trump with China can «undermine» US capabilities in the fight against the coronavirus pandemic.
As of March 13, when the report was released, the think tank found that $ 3.3 billion in critical medical supplies were still subject to 7.5% duties. Imports of $ 1.1 billion of goods that could potentially help fight Covid-19 remain subject to 25% tariffs – even after the Trump administration temporarily suspended some of them.
«Administration Trade Duties on Chinese Medical Products May Foster Shortages and Higher Costs of Vital Equipment During a National Health Crisis», – the author of the report writes Chad Bown.
He noted that Trump’s trade policies forced Beijing to sell many of its medical supplies to countries other than the United States. Some of these products include protective suits for doctors and nurses and high-tech patient monitoring equipment..
Approximately $ 100 billion in intermediate goods from China are still subject to 25% trade duties, according to PIIE, pushing up the cost of parts and components for medical device manufacturers in the United States..
The Wall Street Journal also reports that General Motors has pushed for tariff cuts on some of its Chinese-made components, which were subject to 25 percent tariffs, in order to «ease the burden» production of ventilators in the fight against the Covid-19 pandemic.
In 2018 and 2019, healthcare providers already warned against imposing trade duties on medical supplies as they would drive up costs and disrupt supply chains..
Threats to impose US trade duties on Mexico – the second largest source of personal protective equipment and medical protective clothing for the United States – will reduce the supply of imported goods from this category. Thinks so Robert Zoellick, former President of the World Bank and former Deputy Secretary of State of the United States.
«Mr Trump’s bizarre threats have undermined confidence in export-oriented industry in this country», – writes Zoellick in his article for the Wall Street Journal.
If this antagonism persists, Washington may also face difficulties in obtaining much-needed medical supplies from the EU, the main source of medical supplies for the United States, including X-ray equipment and hand sanitizers..
Trump banned all European travelers from entering the United States for 30 days in March, blaming Europe for failing to take the tough timely action he said the United States took to combat the so-called «foreign virus». The president later clarified that the restrictions did not include trade and cargo, after it was initially assumed that the ban could also apply to them..
Since the beginning of the year, more than 50 countries, including France and South Korea, have tightened restrictions on pharmaceutical exports, according to a Global Trade Alert study in collaboration with the University of St. Gallen in Switzerland. This move further restricts overseas supply of medical equipment for the United States..
«Seven countries account for 70% of exports of artificial respirators, essential tools for critically ill patients; if one of these countries bans exports, prices could rise by 10%», – warned Zoellick.
Trump also passed the Defense Manufacturing Act on April 3 to ban US exports of N-95 respirators, masks and other personal protective equipment..
However, the ban on the export of personal protective equipment is not only «will trigger retaliatory measures», but also «will undermine the potential of other countries in the fight against Covid-19», as they are being denied badly needed PPE, said Juan of the Council on Foreign Relations.
«This is a global pandemic. Our ultimate success in containing the spread of Covid-19 largely depends on how effectively other countries deal with the outbreak. We cannot claim victory if the virus epidemic continues in other countries.», – added Huang.