China on Tuesday signaled that it was willing to move ahead of the previous year for trade with President Trump by hitting the top of American biotechnology companies.
China's Ministry of Commerce has said that San Diego company Illumina will ban the import of gene mapping products into China. Illumina is one of the world's leading producers of gene sequencing machines, counting China with 7% of sales.
Beijing also said it took action against dozens of other companies from the US as part of a volley of a lawsuit against Washington in retaliation for another tariff.
Chinese officials have selected 15 companies, including drone maker Skydio, for punitive trade measures to “protect national security and interests.” He also said it would add 10 more American companies to what is called “unreliable entity lists,” preventing them from doing business in China.
Both blacklists have become increasingly tactics for Beijing when they hit in Washington in their escalating trade war. However, in the past, Beijing has taken a more narrow action, targeting defense companies related to arms sales with Taiwan and companies that are barely present in China.
Now, Beijing went further, banning Illumina from doing business in China, violating market trading rules and accusing Chinese companies of discriminating against them. Beijing blacklisted the company last month along with PVH, the clothing manufacturer behind Calvin Klein and Tommy Hilfiger.
Illumina has evaluated Beijing's actions “to fully understand the impact it has on its operations in China,” but said it will continue to serve its Chinese customers.
“We respect and comply with China's laws and regulations and are committed to operating in accordance with the latest guidelines from the Commerce Department,” an Illumina spokesperson said in a statement.
Until now, China has been reluctant to take retaliatory swipes that affect American companies for fear of smoking foreign investors. Even after targeting Illumina, Chinese officials have tried to preempt concerns.
China is only targeting “a small number of foreign companies that risk China's national security in accordance with the law,” the Commerce Department said in a statement, adding that it “we welcome businesses from around the world to invest and launch in China.”
Actions against businesses were part of a broader response adopted minutes after President Trump's latest tariffs. Retaliation from Beijing included tariffs on food imported from the US.
“For China, the ultimate scenario will be a complete reduction in trade hostility with the US,” said Joe Mazur, an analyst at research firm Trivium. “It won't happen, so the only thing they can do now is to set an example for a few companies.”
China and the US seem to be heading for more trade clashes, despite Chinese scholars and former diplomats traveling to Washington for recent weeks to begin conversations for a deal.
Beijing may now be more encouraging to take further punitive actions against Chinese American companies, Mazur said.
“When sending a message,” he said, “You're putting other American companies on alert for their status in China.”
Zixu Wang and Li you contributed to the research.
