As the conflict between the U.S. and China has developed into a tariff war, the bioindustry has become increasingly likely to be a battleground. Initially, pharmaceuticals were excluded from the reciprocal tariff imposition, but there is a possibility that separate tariffs may be imposed. Additionally, U.S. Congress is again pushing for a biosafety law targeting Chinese bio corporations, indicating that both tariffs and legislation are aimed at China's bioindustry.
The Wall Street Journal reported on the 8th (local time) that "a 215-page report released by the U.S. Congress' Emerging Biotech National Security Committee (NSCEB) shows Washington's deep concern about China's rapidly growing biotechnology."
The NSCEB is an organization that reviews the impact of advanced biotechnology on national security and suggests policies to maintain the U.S.'s leading position. It was established in 2021 by lawmakers, industry leaders, academics, and former government officials.
The report said, "China is quickly gaining a dominant position in the biotech sector, and if the U.S. does not act within the next three years, it could fall permanently behind," recommending that the government invest at least $15 billion (approximately 23 trillion won) in bio research over the next five years. It also stated that transactions with Chinese corporations should be restricted and a U.S. presidential direct organization should be established to oversee the bio industry strategy.
The NSCEB analyzed that if China weaponizes biotechnology, such as rare earths, or restricts exports, it could pose a direct threat to the U.S. health, security, and economy.
In fact, China supplies raw pharmaceuticals and generics (synthetic drug copies) to the U.S. and globally. Recently, its research and development competitiveness has increased, with subsequent achievements in developing and obtaining approvals for new drugs.
This is not the first time the U.S. Congress has openly expressed concerns about the development of China's bioindustry. Last year, Congress pushed for a "biosafety law" aimed at blocking Chinese bio corporations from entering the U.S. market. This bill passed the House of Representatives but did not make it through the Senate.
However, this year, a committee under Congress released a report warning about China's bio industry, raising the possibility of a revival of the biosafety law.
The Wall Street Journal noted that "last year's biosafety law did not pass the Senate, making it difficult to implement real actions," but stated that "Todd Young, the Republican senator and chair of the NSCEB, expressed confidence that Congress would act on this recommendation."
There are also views that tariffs, along with the law, could become weapons directed at China's bio industry. The U.S. and China have already started a 'chicken game' style war, responding to tariff impositions with counter-tariffs.
The day before, China announced that it would raise tariffs on U.S. products from 34% to 84% starting on the 10th. In response to the Trump administration's increase of tariffs on Chinese products to 104%, this was a direct retaliation. Then, President Trump stated that he would impose a high tariff of 125% on China and suspend the universal and reciprocal tariffs imposed on countries other than China for 90 days.
Pharmaceuticals were excluded from the list of items subject to reciprocal tariffs announced by the U.S. earlier. However, as President Trump indicated that he is considering imposing separate tariffs on pharmaceuticals, stock prices of pharmaceutical and bio companies in the U.S., Europe, and South Korea fell in succession. Then, following the tariff suspension announcement, stock prices rebounded collectively, leaving the market in an extremely unstable state.
If the Trump administration and Congress go ahead with the separate tariff imposition on pharmaceuticals and revitalize the biosafety law, Chinese raw pharmaceutical and generic companies could face severe repercussions, potentially blocking Chinese bio companies from entering the U.S. market.
In this case, it could present another opportunity for South Korean corporations. If the business paths of Chinese contract development and manufacturing organizations (CDMOs) are blocked or if Chinese raw pharmaceutical manufacturers are pushed out, other countries' corporations could fill the gap.
However, with President Trump openly pressuring U.S. pharmaceutical companies such as Eli Lilly and Johnson & Johnson (J&J) to produce domestically, whether the U.S.-China bio conflict will favor South Korea remains uncertain.
Lee Seung-kyu, vice president of the Korea Bio Association, stated, "Japan and India are also eyeing China's vacant position," adding, "In particular, Fujifilm, which has entered the CDMO market, is already building a factory in the U.S., suggesting a favorable trend for Japan." He noted, "In seeking opportunities amid a crisis, the government's bioindustry nurturing policy and diplomatic power are crucial."