Andrew Silver
5 min read
By Andrew Silver
SHANGHAI (Reuters) -Drug research and development firms in China including WuXi AppTec and WuXi Biologics are changing project plans, stockpiling supplies and discussing testing locally, said sources with knowledge of the matter, as they seek to mitigate the impact of U.S.-China trade tensions.
China's sprawling pharmaceutical research and manufacturing sector serves global drug giants such as Pfizer and AstraZeneca with a low-cost development model that often uses imported clinical samples, equipment, chemicals and other materials to conduct work.
Fears of delay in access to U.S. supply chains and raised import tariffs are spurring biotech and pharmaceutical companies to avoid, pause or consider delaying the start of projects, according to three sources.
They are also discussing testing U.S. clinical samples in the U.S., instead of sending them to China for further research, a move that could increase costs, and requesting additional supplies for backup, three other sources said.
The six sources who spoke to Reuters are director or executive-level employees involved in various aspects of the industry in China including research and development, manufacturing and supply chains.
All but two agreed to speak only on condition of anonymity because of concerns about effects on fundraising plans or they were not authorised to speak to media. The developments have not been reported previously.
U.S. and Chinese officials said last week they had agreed on a framework to put a May trade truce back on track and remove China's export restrictions on rare earths, but offered little sign of a durable resolution to longstanding trade differences that have affected products ranging from semiconductors and jet engines to medical equipment and pharmaceuticals.
"What kind of long-term policy it could be, you know, what kind of tariff would it be in half a year, in one year... nobody knows. And that's the problem. That's what makes everybody worry and nervous," said Chen Gong, co-founder of NeuExcell Therapeutics, a biotech with its main operations in Suzhou.
He said the U.S.-China trade tensions had made him more cautious about investing in a clinical trial and the company would delay its start if it did not have sufficient funding.
Reliance on U.S. imports has come into particular focus as trade tensions escalate. In 2024, the U.S. exported diagnostic and laboratory reagents to China valued at about $1.4 billion and prepared culture media for the development or maintenance of microorganisms worth about $125 million, U.N. Comtrade data showed.
