May 20, 2020
U.S. Dependence on Chinese Pharmaceuticals is Overstated
The coronavirus pandemic and resulting shortage of medical supplies is leading some policymakers to call for the United States to reduce its trade with China for medicine and medical goods. A heavy reliance on China creates a strategic risk, the thinking goes — but does the United States truly rely on China for these goods? In a new analysis, AAF’s Director of Immigration and Trade Policy Jacqueline Varas examines the supply chain and concludes that, apart from several antibiotics, the United States is not overly dependent on China.
Her central points:
- In reality, U.S. supply chains are well diversified, with China supplying only 18 percent of total active pharmaceutical ingredient imports, 9 percent of total antibiotic imports, and less than 1 percent of total vaccine imports;
- Moreover, U.S. production of pharmaceutical goods is often understated: 70 percent of essential medical equipment is manufactured in the United States, and 70 percent of total antibiotic spending and 50 percent of total vaccine spending is on U.S.-made products; and
- The best way to fight current and future pandemics is not to reduce the supply of medical goods with tariffs and Buy American laws, but instead to continue the United States’ deregulatory efforts and diversify U.S. supply chains even further.