USCBC Comment on Section 232 National Security Investigation of Imports of Pharmaceuticals and Pharmaceutical Ingredients

The US-China Business Council (USCBC) welcomes the opportunity to submit comments to the Bureau of Industry and Security (BIS) on the Section 232 National Security Investigation of Imports of Pharmaceuticals and Pharmaceutical Ingredients.

USCBC comprises about 270 US companies that do business with China. Many of our member companies play a leading role in the pharmaceutical sector and across related industries, including biomedical research, pharmaceutical transportation, clinical application, and the production of essential equipment and consumables that support pharmaceutical use within the United States. The biopharmaceutical supply chain is inherently complex and global in nature. While we recognize the vulnerabilities posed by reliance on foreign sources, the imposition of unilateral tariffs or import quotas—particularly in the absence of exemptions for manufacturing equipment and inputs and reasonable adjustment periods—can lead to serious unintended consequences. These include potential drug shortages, higher healthcare costs, and diminished incentives for innovation, all of which would harm American patients and the competitiveness of the US pharmaceutical industry. Moreover, such disruptions may significantly undermine the Administration’s strategic objectives of reshoring pharmaceutical manufacturing, making it more difficult to achieve in a timely manner.

USCBC appreciates BIS’ efforts to evaluate the national security implications “… of imports of pharmaceuticals and pharmaceutical ingredients, including finished drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients, and key starting materials, and derivative products of those items.” However, sectoral tariffs undermine US competitiveness and access to a diverse range of sources in the biopharmaceutical supply chain.

American biopharmaceutical companies have invested significantly in developing diversified, resilient, and cost-effective global supply chains. Data from USCBC’s most recent annual membership survey indicates that 43 percent of respondent companies across different industries reported shifts in their suppliers or sourcing strategies, with many pursuing new supply chain configurations aimed at strengthening supply chain resilience in the United States. In the pharmaceutical industry, the United States sources approximately 48% of its active pharmaceutical ingredients (APIs) from India, 22% from Europe, and 13% from China, while 10% is produced domestically. In 2022, the Atlantic Council reported that China accounted for only 6%of overall US pharmaceutical imports and 17% of API imports.