COVID-19: China Medical Supply Chains and Broader Trade Issues

Changes from October 8, 2020 to December 23, 2020

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COVID-19: China Medical Supply Chains and
~~October 8~~December 23, 2020 , 2020
Broader Trade Issues
Karen M. Sutter,
The outbreak of Coronavirus Disease 2019 (COVID-19), first in China, and then The outbreak of Coronavirus Disease 2019 (COVID-19), first in China, and then
Coordinator
globally, including in the United States, globally, including in the United States, ~~is drawing~~has drawn attention to the ways in which the attention to the ways in which the
Specialist in Asian Trade Specialist in Asian Trade
U.S. economy depends on manufacturing and supply chains based in China. This report U.S. economy depends on manufacturing and supply chains based in China. This report
and Finance and Finance
aims to assess current developments and identify immediate and longer range China aims to assess current developments and identify immediate and longer range China

trade issues for Congress. trade issues for Congress.
Andres B. Schwarzenberg
Analyst in International Analyst in International
An area of particular concern to Congress An area of particular concern to Congress ishas been U.S. shortages in medical supplies— U.S. shortages in medical supplies—
Trade and Finance Trade and Finance
including personal protective equipment (PPE) and pharmaceuticals—as the United including personal protective equipment (PPE) and pharmaceuticals—as the United

States States ~~steps~~stepped up efforts to contain up efforts to contain the COVID-19 COVID-19 pandemic with limited domestic with limited domestic ~~stockpiles and~~
Michael D. Sutherland
stockpiles and insufficient U.S. industrial capacity. Because of China’s role as a global insufficient U.S. industrial capacity. Because of China’s role as a global ~~supplier of PPE,~~
Analyst in International Analyst in International
supplier of PPE, medical devices, antibiotics, and active pharmaceutical ingredients, medical devices, antibiotics, and active pharmaceutical ingredients, ~~reduced exports~~
Trade and Finance Trade and Finance
reduced exports from China from China ~~have~~ led to shortages of critical medical supplies in the United led to shortages of critical medical supplies in the United ~~States.~~

States. Exacerbating the situation, in early February 2020, the Chinese government Exacerbating the situation, in early February 2020, the Chinese government ~~nationalized~~

nationalized control of the production and distribution of medical supplies in China—directing all control of the production and distribution of medical supplies in China—directing all
production for domestic use—and directed the bureaucracy and Chinese industry to secure supplies from the production for domestic use—and directed the bureaucracy and Chinese industry to secure supplies from the
global market. Once past the initial peak of its COVID-19 outbreak, the Chinese government appears to have global market. Once past the initial peak of its COVID-19 outbreak, the Chinese government appears to have
prioritized certain countries and selectively released some medical supplies for overseas delivery. prioritized certain countries and selectively released some medical supplies for overseas delivery.
Congress has enacted legislation to better understand and address U.S. medical supply chain dependencies, Congress has enacted legislation to better understand and address U.S. medical supply chain dependencies,
including P.L. 116-136, The Coronavirus Aid, Relief, and Economic Security (CARES) Act, that includes several including P.L. 116-136, The Coronavirus Aid, Relief, and Economic Security (CARES) Act, that includes several
provisions toprovisions to:
 expand drug shortage reporting requirements;  expand drug shortage reporting requirements;
 require certain drug manufacturers to draw up risk management plans;  require certain drug manufacturers to draw up risk management plans;
 require the U.S. Food and Drug Administration (FDA) to maintain a public list of medical devices  require the U.S. Food and Drug Administration (FDA) to maintain a public list of medical devices
that are determined to be in shortage; and that are determined to be in shortage; and
 direct the National Academies of Science, Engineering, and Medicine to conduct a study of  direct the National Academies of Science, Engineering, and Medicine to conduct a study of
pharmaceutical supply chain security. pharmaceutical supply chain security.
Other potential considerations for Congress include whether and how to further incentivize additional production Other potential considerations for Congress include whether and how to further incentivize additional production
of health supplies, diversify production, address other supply chain dependencies (e.g., microelectronics), fill of health supplies, diversify production, address other supply chain dependencies (e.g., microelectronics), fill
information and data gaps, and promote U.S. leadership on global health and trade issues. information and data gaps, and promote U.S. leadership on global health and trade issues.
The crisis that The crisis that ~~merged~~emerged for the U.S. economy for the U.S. economy iswas defined, in large part, by a collapse of critical supply, as well as defined, in large part, by a collapse of critical supply, as well as a a
sharp downturn in demand, first in China and now in the United States and globally. As China’s manufacturing sharp downturn in demand, first in China and now in the United States and globally. As China’s manufacturing
sector sector ~~recovers~~has recovered, while the United States and other major global markets are , while the United States and other major global markets are still grappling with grappling with the COVID-COVID-1919 pandemic, some fear , some fear
China could overwhelm overseas markets, as it ramps up export-led growthChina could overwhelm overseas markets, as it ramps up export-led growth ~~to compensate for the sharp downturn~~
~~of exports in the first quarter of 2020, secure hard currency, and boost economic growth. China may also seek~~. China is also seeking to to
make gains in strategic sectors—such as telecommunications, microelectronics, and semiconductors—in which make gains in strategic sectors—such as telecommunications, microelectronics, and semiconductors—in which
the government undertook extraordinary measures to sustain research and development and manufacturing during the government undertook extraordinary measures to sustain research and development and manufacturing during
the COVID-19 outbreak in China. the COVID-19 outbreak in China.

Congressional Research Service Congressional Research Service

COVID-19: China Medical Supply Chains and Broader Trade Issues

Overview
The outbreak of Coronavirus Disease 2019 (COVID-19), first in the People’s Republic of China The outbreak of Coronavirus Disease 2019 (COVID-19), first in the People’s Republic of China
(PRC or China), and now globally, including in the United States, (PRC or China), and now globally, including in the United States, ~~is drawing~~has drawn attention to the attention to the
ways in which the United States and other economies depend on critical manufacturing and ways in which the United States and other economies depend on critical manufacturing and
global value chains that rely on production based in China. Congress global value chains that rely on production based in China. Congress ishas been particularly concerned particularly concerned
about these dependencies and has passed legislation to better understand and address them. An about these dependencies and has passed legislation to better understand and address them. An
area of particular concern to Congress in the current environment area of particular concern to Congress in the current environment ishas been U.S. shortages of medical U.S. shortages of medical
supplies—including personal protective equipment (PPE) and pharmaceuticals—as the United supplies—including personal protective equipment (PPE) and pharmaceuticals—as the United
States steps up efforts to contain States steps up efforts to contain the COVID-19 COVID-19 pandemic with limited domestic stockpiles and insufficient with limited domestic stockpiles and insufficient
U.S. industrial capacity. Because of China’s role as a global supplier of PPE, medical devices, U.S. industrial capacity. Because of China’s role as a global supplier of PPE, medical devices,
antibiotics, and active pharmaceutical ingredients (API), reduced exports from China antibiotics, and active pharmaceutical ingredients (API), reduced exports from China ~~have~~ led to led to
shortages of critical medical supplies in the United States.1 shortages of critical medical supplies in the United States.1
Starting in early February 2020, U.S. health care experts began warning of a likely global spread Starting in early February 2020, U.S. health care experts began warning of a likely global spread
of COVID-19, and early reports of U.S. medical supply shortages began to emerge. At the same of COVID-19, and early reports of U.S. medical supply shortages began to emerge. At the same
time, the Chinese government nationalized control of the production and distribution of medical time, the Chinese government nationalized control of the production and distribution of medical
supplies in China, directing all production for domestic use.2 The Chinese government also supplies in China, directing all production for domestic use.2 The Chinese government also
directed the national bureaucracy, local governments, and Chinese industry to secure supplies directed the national bureaucracy, local governments, and Chinese industry to secure supplies
from the global market.3 This effort likely exacerbated medical supply shortages in the United from the global market.3 This effort likely exacerbated medical supply shortages in the United
States and other countries, particularly in the absence of domestic emergency measures that might States and other countries, particularly in the absence of domestic emergency measures that might
have locked in domestic contracts, facilitated an earlier start to alternative points of production, have locked in domestic contracts, facilitated an earlier start to alternative points of production,
and restricted exports of key medical supplies. As China’s manufacturing sector recovers while and restricted exports of key medical supplies. As China’s manufacturing sector recovers while
the United States and other countries are the United States and other countries are still grappling with COVID-19, the Chinese government grappling with COVID-19, the Chinese government ~~may~~
~~prioritize~~appears to have prioritized certain countries for overseas delivery of medical supplies. Those decisions appear to certain countries for overseas delivery of medical supplies. Those decisions appear to be
have been driven, at least in part, by political calculationsdriven, at least in part, by political calculations~~, as it has done recently with many countries~~
~~around the world~~.4 .4

1 Finbarr Bermingham and Su-Lin Tan, “Coronavirus: China’s mask-making juggernaut cranks into gear, sparking 1 Finbarr Bermingham and Su-Lin Tan, “Coronavirus: China’s mask-making juggernaut cranks into gear, sparking
fears of over-reliance on world’s workshop,” fears of over-reliance on world’s workshop,” South China Morning Post, March 12, 2020, , March 12, 2020,
https://www.scmp.com/economy/global-economy/article/3074821/coronavirus-chinas-mask-making-juggernaut-https://www.scmp.com/economy/global-economy/article/3074821/coronavirus-chinas-mask-making-juggernaut-
cranks-gear; U.S. Food and Drug Administration, “Coronavirus (COVID-19) Supply Chain Update,” Press release, cranks-gear; U.S. Food and Drug Administration, “Coronavirus (COVID-19) Supply Chain Update,” Press release,
February 27, 2020, https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-supply-chain-update. February 27, 2020, https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-supply-chain-update.
2 Zhang Pinghui and Zhou Xin, “Coronavirus: China Shifts Responsibility Over Medical Supplies Amid Mask 2 Zhang Pinghui and Zhou Xin, “Coronavirus: China Shifts Responsibility Over Medical Supplies Amid Mask
Shortage, Rising Death Toll,” Shortage, Rising Death Toll,” South China Morning Post, February 3, 2020, updated on February 14, 2020,, February 3, 2020, updated on February 14, 2020,
https://www.scmp.com/economy/china-economy/article/3048744/coronavirus-mask-shortage-prompts-beijing-tweak-https://www.scmp.com/economy/china-economy/article/3048744/coronavirus-mask-shortage-prompts-beijing-tweak-
authority; Finbarr Bermingham and Su-Lin Tan, “Coronavirus: China’s Mask Making Juggernaut Cranks Into Gear, authority; Finbarr Bermingham and Su-Lin Tan, “Coronavirus: China’s Mask Making Juggernaut Cranks Into Gear,
Sparking Fears of Overreliance on World’s Workshop,” Sparking Fears of Overreliance on World’s Workshop,” South China Morning Post, March 12, 2020, , March 12, 2020,
https://www.scmp.com/economy/global-economy/article/3074821/coronavirus-chinas-mask-making-juggernaut-https://www.scmp.com/economy/global-economy/article/3074821/coronavirus-chinas-mask-making-juggernaut-
cranks-gear; Engen Tham, Cheng Leng, and Zhang Yan, “Exclusive: Unilever, 3M on List of Firms Eligible for China cranks-gear; Engen Tham, Cheng Leng, and Zhang Yan, “Exclusive: Unilever, 3M on List of Firms Eligible for China
Loans to Ease Coronavirus Crisis—Sources,” Loans to Ease Coronavirus Crisis—Sources,” Reuters, February 19, 2020, https://www.reuters.com/article/us-china-, February 19, 2020, https://www.reuters.com/article/us-china-
health-lending-exclusive-idUSKBN20D0SQ; Yang Jian, “GM, Wuling Venture Begins Output of Machines to Make health-lending-exclusive-idUSKBN20D0SQ; Yang Jian, “GM, Wuling Venture Begins Output of Machines to Make
Face Masks, Face Masks, Automotive News, February 20, 2020, https://www.autonews.com/china/gm-wuling-venture-begins-, February 20, 2020, https://www.autonews.com/china/gm-wuling-venture-begins-
output-machines-make-face-masks; and Luffy Liu, “700 Tech Companies in China Have Begun Making Masks,” EE output-machines-make-face-masks; and Luffy Liu, “700 Tech Companies in China Have Begun Making Masks,” EE
Times, February 13, 2020, https://www.eetimes.com/700-tech-companies-in-china-have-begun-making-masks/. Times, February 13, 2020, https://www.eetimes.com/700-tech-companies-in-china-have-begun-making-masks/.
3 “Circular3 “Circular on Further Facilitating the Import and Export of Technology During the Period of Epidemic Prevention and on Further Facilitating the Import and Export of Technology During the Period of Epidemic Prevention and
Control,” PRC Ministry of Commerce, February 4, 2020, Control,” PRC Ministry of Commerce, February 4, 2020,
http://english.mofcom.gov.cn/article/newsrelease/significantnews/202002/20200202934774.shtml; and “Circular on http://english.mofcom.gov.cn/article/newsrelease/significantnews/202002/20200202934774.shtml; and “Circular on
Actively Expanding Imports to Combat Against Novel Coronavirus Epidemic,” PRC Ministry of Commerce, February Actively Expanding Imports to Combat Against Novel Coronavirus Epidemic,” PRC Ministry of Commerce, February
6, 2020, http://english.mofcom.gov.cn/article/newsrelease/significantnews/202002/20200202. 6, 2020, http://english.mofcom.gov.cn/article/newsrelease/significantnews/202002/20200202.
4 Li Yan, “Xi Says China to Send More Medical Experts to Italy,” 4 Li Yan, “Xi Says China to Send More Medical Experts to Italy,” Xinhua, March 17, 2020, , March 17, 2020,
http://www.ecns.cn/m/news/politics/2020-03-17/detail-ifzunmih1236562.shtml934157.shtml, and “’Mask Diplomacy’ http://www.ecns.cn/m/news/politics/2020-03-17/detail-ifzunmih1236562.shtml934157.shtml, and “’Mask Diplomacy’
From Beijing to Change Narrative About COVID-19,” SupChina, March 23, 2020, Congressional Research Service Congressional Research Service
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COVID-19: China Medical Supply Chains and Broader Trade Issues

COVID-19 was identified in China in December 2019 and peaked in late January 2020. In COVID-19 was identified in China in December 2019 and peaked in late January 2020. In
response, China shut down a large part of its economy in an effort to contain the outbreak. A key response, China shut down a large part of its economy in an effort to contain the outbreak. A key
factor in the sharp economic slowdown in China was the dramatic downturn of both demand and factor in the sharp economic slowdown in China was the dramatic downturn of both demand and
supply after Chinese officials imposed restrictions in the third week of January on movement of supply after Chinese officials imposed restrictions in the third week of January on movement of
people and goods in and out of localities across China. people and goods in and out of localities across China. ~~Since~~When the COVID-19 outbreak in China the COVID-19 outbreak in China
~~has~~ eased, the Chinese government’s efforts to restart business activities eased, the Chinese government’s efforts to restart business activities ~~has been~~were slow and slow and
uneven across sectors and locations. Companiesuneven across sectors and locations. Companies ~~have~~ sought to meet new government sought to meet new government
requirements for virus containment and faced worker and supply shortages as interregional requirements for virus containment and faced worker and supply shortages as interregional
logistics logistics ~~have~~ remained somewhat constrained.5 Resumption of bilateral trade between the United remained somewhat constrained.5 Resumption of bilateral trade between the United
States and China States and China ~~will likely be~~was uneven due to persistent bottlenecks in inputs, the location of uneven due to persistent bottlenecks in inputs, the location of
container shipments, and logjams in current shipments. U.S. companies typically maintain container shipments, and logjams in current shipments. U.S. companies typically maintain
anywhere from two to ten weeks of inventory, and transportation time for trans-Pacific container anywhere from two to ten weeks of inventory, and transportation time for trans-Pacific container
shipments is typically three weeks. With this timeframe in mind, initial shortages that U.S. firms shipments is typically three weeks. With this timeframe in mind, initial shortages that U.S. firms
faced of deliveries of microelectronics, auto parts, and health and medical products intensified faced of deliveries of microelectronics, auto parts, and health and medical products intensified
once inventory was depleted. once inventory was depleted. ~~Depending on the trajectory of the virus, there could be~~ There were additional additional
shortages in a wide range of imports that transit via container ship (e.g., processed raw materials, shortages in a wide range of imports that transit via container ship (e.g., processed raw materials,
intermediate industrial goods, and finished consumer products). intermediate industrial goods, and finished consumer products).
As China’s economic activities As China’s economic activities ~~resume,~~have resumed, many other countries around the world are other countries around the world are still taking an economic taking an economic
~~hit. As in China, restrictions~~hit. Restrictions around the world on the movement of people and business around the world on the movement of people and business ~~operations~~
~~could prolong sharp new~~operations have prolonged slowdowns in demand, transportation, and logistics worldwide, further slowdowns in demand, transportation, and logistics worldwide, further
dragging down prospects for global trade recovery. Suppressed global demand will likely further dragging down prospects for global trade recovery. Suppressed global demand will likely further
complicate efforts to orchestrate a complicate efforts to orchestrate a full rebound in economic activity in China (or the world). In rebound in economic activity in China (or the world). In
sectors where China maintains excess capacity, such as steel, some fear China could overwhelm sectors where China maintains excess capacity, such as steel, some fear China could overwhelm
overseas markets as it ramps up export-led growth to compensate for the sharp economic overseas markets as it ramps up export-led growth to compensate for the sharp economic
downturn in the first quarter of 2020. downturn in the first quarter of 2020.
China’s exports increased by over 20% in November 2020, over November 2019, led by exports of PPE, consumer electronics, and other consumer goods. Congress faces ~~Congress faces current~~ choices that will influence the longer-range U.S. trade trajectory vis-a-vis choices that will influence the longer-range U.S. trade trajectory vis-a-vis
China. Since the imposition of Section 301 tariffs on U.S. imports from China and China’s China. Since the imposition of Section 301 tariffs on U.S. imports from China and China’s
retaliatory tariffs beginning in 2018, some Members have raised questions about the dependence retaliatory tariffs beginning in 2018, some Members have raised questions about the dependence
of U.S. supply chains on China for critical products. There are also concerns some have raised of U.S. supply chains on China for critical products. There are also concerns some have raised
about the potential ramifications of these dependencies, particularly in times of crisis or PRC about the potential ramifications of these dependencies, particularly in times of crisis or PRC
nationalization of industry. nationalization of industry. ~~Current demand~~Demand pressures during the COVID-19 pandemic could pressures during the COVID-19 pandemic could
increase U.S. reliance on certain medical supplies from Chinaincrease U.S. reliance on certain medical supplies from China~~, at least in the short term~~ (provided (provided
that the Chinese government is willing to export these supplies to the United States). At the same that the Chinese government is willing to export these supplies to the United States). At the same
time, these pressures time, these pressures ~~are~~have also also been incentivizing diversification efforts as governments and firms re-incentivizing diversification efforts as governments and firms re-
evaluate the risks of basing substantial portions of their supply chains in China. evaluate the risks of basing substantial portions of their supply chains in China.
U.S.-China Trade and the Impact of COVID-19
As the United States’ third-largest trading partner in 2019, bilateral trade with China is important As the United States’ third-largest trading partner in 2019, bilateral trade with China is important
to the U.S. economy, and the recent sharp downturn in activity affects a wide range of U.S. to the U.S. economy, and the recent sharp downturn in activity affects a wide range of U.S.
industries. Total U.S. trade with the world (the sum of exports and imports of goods and services) industries. Total U.S. trade with the world (the sum of exports and imports of goods and services)

~~From Beijing to Change Narrative About COVID-19,” SupChina, March 23, 2020,~~
https://supchina.com/2020/03/23/mask-diplomacy-from-beijing-to-change-narrative-about-covid-19/. https://supchina.com/2020/03/23/mask-diplomacy-from-beijing-to-change-narrative-about-covid-19/.
5 Norihiko Sirouzu and Yilei Sun, “As China’s ‘Detroit’ Reopens, World’s Automakers Worry About Disruptions,” 5 Norihiko Sirouzu and Yilei Sun, “As China’s ‘Detroit’ Reopens, World’s Automakers Worry About Disruptions,”
Reuters, March 8, 2020. , March 8, 2020.
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link to page 8 link to page 8 COVID-19: China Medical Supply Chains and Broader Trade Issues

was $5.6 trillion in 2019, equivalent to 26% of U.S. gross domestic product (GDP); China was $5.6 trillion in 2019, equivalent to 26% of U.S. gross domestic product (GDP); China
accounts for 11% of U.S. trade.6 Key facts about the relationship include the following:7 accounts for 11% of U.S. trade.6 Key facts about the relationship include the following:7
 China’s, total merchandise trade with the United States in 2019 amounted to  China’s, total merchandise trade with the United States in 2019 amounted to
$558.9 billion; $558.9 billion;
 China is the United States’ third largest export market for goods. U.S. goods  China is the United States’ third largest export market for goods. U.S. goods
exports to China in 2019 were valued at $106.6 billion in 2019; exports to China in 2019 were valued at $106.6 billion in 2019;
 China is the top source of U.S. imports. U.S. goods imports from China reached  China is the top source of U.S. imports. U.S. goods imports from China reached
$452.2 billion in 2019; $452.2 billion in 2019;
 U.S. services exports to China in 2019 were valued at $56.7 billion (mostly travel  U.S. services exports to China in 2019 were valued at $56.7 billion (mostly travel
and transport); and transport);
 U.S. services imports from China in 2019 were valued at $18 billion (about half  U.S. services imports from China in 2019 were valued at $18 billion (about half
of this amount was travel and transport); of this amount was travel and transport); ~~and~~
 U.S. foreign direct investment (FDI) stock in China in 2018 reached $116.5  U.S. foreign direct investment (FDI) stock in China in 2018 reached $116.5
billion while China’s FDI stock in the United States reached $60.2 billion in billion while China’s FDI stock in the United States reached $60.2 billion in
20182018.;
 Top U.S. exports to China include semiconductor chips, devices, parts and  Top U.S. exports to China include semiconductor chips, devices, parts and
manufacturing machines; agriculture; aircraft, turbojets, turbo propellers, and gas manufacturing machines; agriculture; aircraft, turbojets, turbo propellers, and gas
turbines; optical and medical equipment; autos; plastics; and pharmaceutical turbines; optical and medical equipment; autos; plastics; and pharmaceutical
products products (Figure 1).
; and  Top U.S. imports from China include microelectronics (computers and cell  Top U.S. imports from China include microelectronics (computers and cell
phones) and appliances, furniture, bedding and lighting; toys, games and sports phones) and appliances, furniture, bedding and lighting; toys, games and sports
equipment; plastics; knitted and non-knitted apparel, textile fabric, linens, and equipment; plastics; knitted and non-knitted apparel, textile fabric, linens, and
footwear; auto parts; articles of iron and steel; medical and surgical instruments; footwear; auto parts; articles of iron and steel; medical and surgical instruments;
and, organic chemicals (including active pharmaceutical ingredients and and, organic chemicals (including active pharmaceutical ingredients and
antibiotics). antibiotics).

6 CRS calculations based on data from the U.S. Department of Commerce, Bureau of Economic Analysis, “Gross 6 CRS calculations based on data from the U.S. Department of Commerce, Bureau of Economic Analysis, “Gross
Domestic Product, Fourth Quarter and Year 2019 (Second Estimate),” and “U.S. International Trade in Goods and Domestic Product, Fourth Quarter and Year 2019 (Second Estimate),” and “U.S. International Trade in Goods and
Services, January 2020.” Total U.S.-China trade amounted to $635.3 billion in 2019. Services, January 2020.” Total U.S.-China trade amounted to $635.3 billion in 2019.
7 The following data is sourced from the U.S. Department of Commerce, Bureau of Economic Analysis’ International 7 The following data is sourced from the U.S. Department of Commerce, Bureau of Economic Analysis’ International
Transactions. Transactions.
Congressional Research Service Congressional Research Service
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COVID-19: China Medical Supply Chains and Broader Trade Issues

Figure 1. U.S.-China Trade in 2019

Source: Congressional Research Service (CRS) with data from Global Trade Atlas. Congressional Research Service (CRS) with data from Global Trade Atlas.
Note: Dashed portion of the bar depicts a subset of the product category. Dashed portion of the bar depicts a subset of the product category.
China First Quarter (Q1) 2020 Slowdown Effects on U.S. Industries
Beginning in late January, the outbreak of COVID-19 in China had a direct economic impact on Beginning in late January, the outbreak of COVID-19 in China had a direct economic impact on
U.S. firms that operate in China, export to or sell goods and services directly in China, or depend U.S. firms that operate in China, export to or sell goods and services directly in China, or depend
on Chinese goods and services for their operations in the United States and abroad. Some analysts on Chinese goods and services for their operations in the United States and abroad. Some analysts
estimate that China experienced a sharp drop in economic growth by as much as 9% in Q1 2020 estimate that China experienced a sharp drop in economic growth by as much as 9% in Q1 2020
and a 17.2% drop in exports in January-February 2020, compared to the same period in 2019.8 and a 17.2% drop in exports in January-February 2020, compared to the same period in 2019.8

8 Ryan Woo, Se Young Lee, David Stanway, and Andrew Galbraith, “Goldman Sees China’s Economy Shrinking 9 8 Ryan Woo, Se Young Lee, David Stanway, and Andrew Galbraith, “Goldman Sees China’s Economy Shrinking 9
Percent in First Quarter Amid Coronavirus Outbreak,” Percent in First Quarter Amid Coronavirus Outbreak,” Reuters, March 16, 2020, https://www.reuters.com/article/us-, March 16, 2020, https://www.reuters.com/article/us-
health-coronavirus-china-toll/goldman-sees-chinas-economy-shrinking-9-in-first-quarter-amid-coronavirus-outbreak-health-coronavirus-china-toll/goldman-sees-chinas-economy-shrinking-9-in-first-quarter-amid-coronavirus-outbreak-
idUSKBN21340T. idUSKBN21340T.
Congressional Research Service Congressional Research Service
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COVID-19: China Medical Supply Chains and Broader Trade Issues

China’s economy is globally connected through trade, investment, and tourism. The economic China’s economy is globally connected through trade, investment, and tourism. The economic
slowdown and global spread of COVID-19, combined with global travel and transportation slowdown and global spread of COVID-19, combined with global travel and transportation
restrictions and other effects, caused worldwide economic fallout. Indicators in key industries, restrictions and other effects, caused worldwide economic fallout. Indicators in key industries,
~~include~~included: :
 China recorded a sharp downturn in microelectronics production and sales and  China recorded a sharp downturn in microelectronics production and sales and
the United States could experience a similar drop due to a potential gap in the United States could experience a similar drop due to a potential gap in
availability. availability. Almost half the value of U.S. imports from China in 2019 was
mobile phones, computers and related parts. .
 Foxconn, a Taiwan firm that produces the iPhone for Apple in China, received  Foxconn, a Taiwan firm that produces the iPhone for Apple in China, received
formal government permission to reopen its facilities in mid-February, but faced formal government permission to reopen its facilities in mid-February, but faced
challenges because of quarantine and transportation restrictions. Foxconnchallenges because of quarantine and transportation restrictions. Foxconn~~’s plan~~
~~to offer~~ said it paid $1,000 to each returning worker $1,000 to each returning worker ~~suggests potential lingering~~to address potential concerns concerns
~~about the risk of infection or other labor constraints~~about returning to work. The company also may have . The company also may have
faced supply constraints of key microelectronics inputs.9 Other companies that faced supply constraints of key microelectronics inputs.9 Other companies that
use Foxconn for contract manufacturing in China include Amazon, Cisco, Dell, use Foxconn for contract manufacturing in China include Amazon, Cisco, Dell,
Google, Hewlett Packard, Nintendo, and Sony, as well as Chinese firms Huawei Google, Hewlett Packard, Nintendo, and Sony, as well as Chinese firms Huawei
and Xiaomi.10 and Xiaomi.10
 The U.S. auto industry and manufacturers in South Korea, Japan, and Germany  The U.S. auto industry and manufacturers in South Korea, Japan, and Germany
quickly faced manufacturing bottlenecks because of the lack of availability of quickly faced manufacturing bottlenecks because of the lack of availability of
auto parts supplies from China. The spread of COVID-19 to other major auto auto parts supplies from China. The spread of COVID-19 to other major auto
manufacturing markets, including the United States, Germany, Japan and South manufacturing markets, including the United States, Germany, Japan and South
Korea imposed additional constraints on auto manufacturing and sales. Korea imposed additional constraints on auto manufacturing and sales. China
exported $9.6 billion in auto parts to the United States in 2019.
 U.S. manufacturing faced potential shortages of intermediate inputs for  U.S. manufacturing faced potential shortages of intermediate inputs for
steelmaking and heavy manufacturing, such as refined manganese metal, steelmaking and heavy manufacturing, such as refined manganese metal,
ferrosilicon, and ferrovanadium. Manganese and ferrovanadium are steel ferrosilicon, and ferrovanadium. Manganese and ferrovanadium are steel
strengtheners that depend on China-based processing. While manganese is mined strengtheners that depend on China-based processing. While manganese is mined
around the world, China controls 97% of manganese processing. Ferrosilicon is around the world, China controls 97% of manganese processing. Ferrosilicon is
used to extract oxygen from liquid steel, and is mostly produced in China.11 used to extract oxygen from liquid steel, and is mostly produced in China.11
China exported almost $10 billion in iron and steel products to the United
States in 2019.
 U.S. retailers, tourism, and service providers that rely on the Chinese consumer  U.S. retailers, tourism, and service providers that rely on the Chinese consumer
base base ~~have also taken~~also took a hit in China. Many closed or significantly curtailed a hit in China. Many closed or significantly curtailed
operations. U.S. retailers reduced operating hours or shuttered stores in response operations. U.S. retailers reduced operating hours or shuttered stores in response
to to the COVID-19COVID-19 pandemic.12 For example, Starbucks closed about half its 4,200 retail outlets .12 For example, Starbucks closed about half its 4,200 retail outlets
in China between late January and late February.13 Retailers and tourism service in China between late January and late February.13 Retailers and tourism service
providers around the world have seen significantly reduced revenue as providers around the world have seen significantly reduced revenue as fewer Chinese citizens travel abroad China’s outbound tourism spending in ~~fewer~~

9 “Apple Supplier Foxconn Expects Coronavirus-Hit Labor Shortage in China to Ease,” 9 “Apple Supplier Foxconn Expects Coronavirus-Hit Labor Shortage in China to Ease,” The Wall Street Journal, March , March
3, 2020. 3, 2020.
10 Duncan Riley, “Apple and Others May Have Avoided Supply Shortages as some Foxconn Plants Reopen in China,” 10 Duncan Riley, “Apple and Others May Have Avoided Supply Shortages as some Foxconn Plants Reopen in China,”
Silicon Angle, February 11, 2020. , February 11, 2020.
11 Alistair MacDonald, “Steelmakers Rely Heavily on China,” 11 Alistair MacDonald, “Steelmakers Rely Heavily on China,” The Wall Street Journal, March 6, 2020. , March 6, 2020.
12 Samantha McDonald, “Columbia, Burberry and 12 Other Fashion Firms Are Closing Stores Due to Coronavirus,” 12 Samantha McDonald, “Columbia, Burberry and 12 Other Fashion Firms Are Closing Stores Due to Coronavirus,”
Footwear News, February 27, 2020. , February 27, 2020.
13 Hayley Peterson, “Starbucks Reopens Most Stores in China, Citing ‘Early Signs of Recovery,’ From Coronavirus,” 13 Hayley Peterson, “Starbucks Reopens Most Stores in China, Citing ‘Early Signs of Recovery,’ From Coronavirus,”
Business Insider, February 27, 2020. , February 27, 2020.
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~~Chinese citizens travel abroad~~ ~~China’s outbound tourism spending in~~ 2018 was
$277 billion, of which an estimated $36 billion was in the United States.14 .14
Transportation, Logistics and Broader Considerations
Measures to contain the COVID-19 outbreak significantly curtailed global transportation links, Measures to contain the COVID-19 outbreak significantly curtailed global transportation links,
preventing the transport of many products and manufacturing inputs. Passenger air traffic has preventing the transport of many products and manufacturing inputs. Passenger air traffic has
slowed significantly, taking offline significant air cargo capacity for microelectronics and other slowed significantly, taking offline significant air cargo capacity for microelectronics and other
products that ship by air. Container shipments products that ship by air. Container shipments ~~are also~~also have been constrained by constrained by ~~the current~~a backlog and backlog and
dependence on domestic trucking and rail transportation, as well as on the ability of countries to dependence on domestic trucking and rail transportation, as well as on the ability of countries to
staff port operations. staff port operations.
U.S. airlines started suspending flights to China in late January 2020 and have suspended other U.S. airlines started suspending flights to China in late January 2020 and have suspended other
routes as COVID-19 has spread globally. United Airlines announced steep flight cuts and said in routes as COVID-19 has spread globally. United Airlines announced steep flight cuts and said in
early March 2020 that ticket bookings were down 70% for Asia-Pacific flights, noting that this early March 2020 that ticket bookings were down 70% for Asia-Pacific flights, noting that this
downturn was magnified by a surge in flight cancellations. The company noted that revenue in downturn was magnified by a surge in flight cancellations. The company noted that revenue in
April and May could drop as much as 70%.15 While Federal Express (FedEx) and United Parcel April and May could drop as much as 70%.15 While Federal Express (FedEx) and United Parcel
Service (UPS) announced in early March that they continued to run flights in and out of affected Service (UPS) announced in early March that they continued to run flights in and out of affected
countries, they warned that limitations on travel could delay some shipments, although freight countries, they warned that limitations on travel could delay some shipments, although freight
carriers are now starting to repurpose passenger flights for cargocarriers are now starting to repurpose passenger flights for cargo ~~which could help~~, helping to expand expand
capacity.16 Quarantine of aircrew and restrictions on the ground in China with regard to labor, capacity.16 Quarantine of aircrew and restrictions on the ground in China with regard to labor,
production, supply and logistics likely significantly curtailed shipments. On March 26, 2020, the production, supply and logistics likely significantly curtailed shipments. On March 26, 2020, the
Civil Aviation Administration of China (CAAC) restricted all airlines running passenger flights in Civil Aviation Administration of China (CAAC) restricted all airlines running passenger flights in
and out of China to one flight per week, further constraining air freight capacity.17 In September and out of China to one flight per week, further constraining air freight capacity.17 In September
2020, CAAC announced the resumption of direct flights to Beijing from eight countries including 2020, CAAC announced the resumption of direct flights to Beijing from eight countries including
Cambodia, Canada, Denmark, Greece, Sweden, and Thailand. Additionally, domestic passenger Cambodia, Canada, Denmark, Greece, Sweden, and Thailand. Additionally, domestic passenger
volumes in China appear to have reached 90% of pre-pandemic levels.18 Further recovery in air volumes in China appear to have reached 90% of pre-pandemic levels.18 Further recovery in air
travel could lead to increased air freight capacity for shipments to and from China.19 travel could lead to increased air freight capacity for shipments to and from China.19
Container shipping from China faced serious logjams because of shortages of workers and Container shipping from China faced serious logjams because of shortages of workers and
trucking constraints. These logjams affected both U.S. imports to and exports from China. The trucking constraints. These logjams affected both U.S. imports to and exports from China. The
Port of Los Angeles announced shipment cuts by 25% that were scheduled from China between Port of Los Angeles announced shipment cuts by 25% that were scheduled from China between
February and April 2020. One in nine Southern California jobs is tied to the ports, including February and April 2020. One in nine Southern California jobs is tied to the ports, including
people who work on the docks, drive trucks, and move boxes in warehouses, according to the people who work on the docks, drive trucks, and move boxes in warehouses, according to the
Executive Director of the Port of Los Angeles.20 In MarchExecutive Director of the Port of Los Angeles.20 In March 2020, the Port Authority of New York and , the Port Authority of New York and
New Jersey requested $1.9 billion in federal aid to offset a forecasted 30% year-on-year drop New Jersey requested $1.9 billion in federal aid to offset a forecasted 30% year-on-year drop in

14 United Nations World Tourism Organization, “Exports from International Tourism Hit USD 1.7 Trillion,” June 6, 14 United Nations World Tourism Organization, “Exports from International Tourism Hit USD 1.7 Trillion,” June 6,
2019, https://www.unwto.org/global/press-release/2019-06-06/exports-international-tourism-hit-usd-17-trillion; U.S. 2019, https://www.unwto.org/global/press-release/2019-06-06/exports-international-tourism-hit-usd-17-trillion; U.S.
International Trade Administration National Travel and Tourism Office, “Fast Facts: United States Travel and Tourism International Trade Administration National Travel and Tourism Office, “Fast Facts: United States Travel and Tourism
Industry 2018,” October 2019, https://travel.trade.gov/outreachpages/download_data_table/Fast_Facts_2018.pdf. Industry 2018,” October 2019, https://travel.trade.gov/outreachpages/download_data_table/Fast_Facts_2018.pdf.
15 Dawn Gilbertson, “Coronavirus Travel Fallout: American, Delta Cutting Flights as Demand Sinks, Joining United 15 Dawn Gilbertson, “Coronavirus Travel Fallout: American, Delta Cutting Flights as Demand Sinks, Joining United
and Other,” and Other,” USA Today, March 10, 2020. , March 10, 2020.
16 “FedEx, UPS Warn of Delivery Delays, JPMorgan Tests Virus Contingency Plan,” 16 “FedEx, UPS Warn of Delivery Delays, JPMorgan Tests Virus Contingency Plan,” PYMNTS.com, March 3, 2020. , March 3, 2020.
17 Ministry of Foreign Affairs of the People’s Republic of China, “CAAC to Further Reduce International Passenger 17 Ministry of Foreign Affairs of the People’s Republic of China, “CAAC to Further Reduce International Passenger
Flights,” press release, March 27, 2020, Flights,” press release, March 27, 2020,
https://www.fmprc.gov.cn/mfa_eng/topics_665678/kjgzbdfyyq/t1762623.shtml. https://www.fmprc.gov.cn/mfa_eng/topics_665678/kjgzbdfyyq/t1762623.shtml.
18 Reuters, “Cheap seats give Chinese airlines a much-needed bounce,” September 15, 2020. 18 Reuters, “Cheap seats give Chinese airlines a much-needed bounce,” September 15, 2020.
19 Reuters, “China will gradually resume direct international flights to Beijing,” September 2, 2020. 19 Reuters, “China will gradually resume direct international flights to Beijing,” September 2, 2020.
20 Margot Roosevelt, “Truckers, Dockworkers Suffer as Coronavirus Chokes L.A., Long Beach Ports Cargo,20 Margot Roosevelt, “Truckers, Dockworkers Suffer as Coronavirus Chokes L.A., Long Beach Ports Cargo,” Los
Angeles Times, March 7, 2020. , March 7, 2020.
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COVID-19: China Medical Supply Chains and Broader Trade Issues

in cargo volumes, and cargo volumes, and ~~in July~~ requested $3 billion requested $3 billion the following July to offset revenue losses stemming from a sharp to offset revenue losses stemming from a sharp
decline in passenger volumes.21 decline in passenger volumes.21
~~In the immediate term, shipping~~Shipping and logistical constraints slowed U.S. exports to Asia. U.S. and logistical constraints slowed U.S. exports to Asia. U.S.
exporters of meat, poultry, hay, oranges and other produce reported in March 2020 that exporters of meat, poultry, hay, oranges and other produce reported in March 2020 that
refrigerated containers refrigerated containers ~~are~~were in short supply and cold storage facilities were overflowing with in short supply and cold storage facilities were overflowing with
inventory.22 U.S. and global manufacturing—including production that recently shifted out of inventory.22 U.S. and global manufacturing—including production that recently shifted out of
China to other parts of Asia and to Mexico—took time to recover from disruptions in Chinese China to other parts of Asia and to Mexico—took time to recover from disruptions in Chinese
supply. Vietnam, Taiwan, Malaysia, South Korea, Japan, Thailand, and Singapore all have strong supply. Vietnam, Taiwan, Malaysia, South Korea, Japan, Thailand, and Singapore all have strong
supply chain links with China and reported Q1 supply shortages.23 supply chain links with China and reported Q1 supply shortages.23
Even as China’s production resumed, these Asian countries grappled with their own COVID-19 Even as China’s production resumed, these Asian countries grappled with their own COVID-19
outbreaks, further complicating recovery. The situation was exacerbated by spread of COVID-19 outbreaks, further complicating recovery. The situation was exacerbated by spread of COVID-19
in other important manufacturing markets such as South Korea, Italy, Germany, and Mexico. in other important manufacturing markets such as South Korea, Italy, Germany, and Mexico.
Disruptions in Chinese supply chains were initially expected to have a limited macroeconomic Disruptions in Chinese supply chains were initially expected to have a limited macroeconomic
effect on developed markets in the short term, but as the outbreak spread globally and Chinese effect on developed markets in the short term, but as the outbreak spread globally and Chinese
firms and logistics operations struggled to return to full capacity, a wide range of U.S. imports firms and logistics operations struggled to return to full capacity, a wide range of U.S. imports
from China, including raw materials, intermediate industrial inputs, and consumer products faced from China, including raw materials, intermediate industrial inputs, and consumer products faced
severe supply constraints. U.S. firms with operations in China or that depend on production in severe supply constraints. U.S. firms with operations in China or that depend on production in
China have begun to consider China have begun to consider some diversification away from China and may face further pressure to diversification away from China and may face further pressure to
establish new supply chains. The head of the EU Chamber of Commerce in China said in late establish new supply chains. The head of the EU Chamber of Commerce in China said in late
February 2020 that the disruption from February 2020 that the disruption from the COVID-19 COVID-19 pandemic had driven home the need for foreign had driven home the need for foreign
companies to diversify away from China.24 In April 2020, the Japanese government earmarked companies to diversify away from China.24 In April 2020, the Japanese government earmarked
$2.2 billion of a broader economic stimulus package to help companies shift production out of $2.2 billion of a broader economic stimulus package to help companies shift production out of
China and to production sites in either Japan or Southeast Asia. In JulyChina and to production sites in either Japan or Southeast Asia. In July 2020, , Japan’s Ministry of Japan’s Ministry of
Economy, Trade, and Industry announced that 87 firms had agreed to shift production out of Economy, Trade, and Industry announced that 87 firms had agreed to shift production out of
China and would receive funding, and in September 2020, added India and Bangladesh to its list China and would receive funding, and in September 2020, added India and Bangladesh to its list
of eligible alternative production sites.25 In August 2020, Australia, Japan, and India, announced a of eligible alternative production sites.25 In August 2020, Australia, Japan, and India, announced a
collaboration to incentivize companies to diversify supply chains from China for economic and collaboration to incentivize companies to diversify supply chains from China for economic and
~~geopolitical reasons.26~~
geopolitical reasons.26 Since July 2020, the Chinese government has been reporting instances of the SARS-CoV-2 virus entering China through the packaging of imported frozen seafood and meat from more than 90
21 Port Authority of New York and New Jersey, “Port Authority Urgently Calls for Congress to Act on Request for $3 21 Port Authority of New York and New Jersey, “Port Authority Urgently Calls for Congress to Act on Request for $3
Billion in Federal Relief Following Precipitous Decline in Passenger Volumes Caused by COVID-19 Pandemic,” press Billion in Federal Relief Following Precipitous Decline in Passenger Volumes Caused by COVID-19 Pandemic,” press
release, July 29, 2020; Lee Hong Liang, “Port Authority of New York and New Jersey seeks $1.9bn bailout amid release, July 29, 2020; Lee Hong Liang, “Port Authority of New York and New Jersey seeks $1.9bn bailout amid
COVID-19,” COVID-19,” Seatrade Maritime News, March 25, 2020; Port Authority of New York and New Jersey, , March 25, 2020; Port Authority of New York and New Jersey, Letter to
Members of the New York and New Jersey Congressional Delegations, letter, March 19, 2020, , letter, March 19, 2020,
https://www.politico.com/states/f/?id=00000170-fadd-d9d1-a3f3-fbdd91ed0000. https://www.politico.com/states/f/?id=00000170-fadd-d9d1-a3f3-fbdd91ed0000.
22 Jacob Bunge, “Meat Stockpiles Surge as Coronavirus Epidemic Curbs Exports,” 22 Jacob Bunge, “Meat Stockpiles Surge as Coronavirus Epidemic Curbs Exports,” The Wall Street Journal, March 2, , March 2,
2020. 2020.
23 Trinh Nguyen, “The Economic Fallout of the Coronavirus in Southeast Asia,” 23 Trinh Nguyen, “The Economic Fallout of the Coronavirus in Southeast Asia,” Carnegie Endowment for
International Peace, February 13, 2020. , February 13, 2020.
24 “China virus outbreak threatens global drug supplies: European business group,” 24 “China virus outbreak threatens global drug supplies: European business group,” Reuters, February 17, 2020. , February 17, 2020.
25 Isabel Reynolds and Emi Urabe, “Japan to Fund Firms to Shift Production Out of China,” 25 Isabel Reynolds and Emi Urabe, “Japan to Fund Firms to Shift Production Out of China,” Bloomberg, April 8, 2020; , April 8, 2020;
“Japan reveals 87 projects eligible for ‘China exit ‘subsidies,” “Japan reveals 87 projects eligible for ‘China exit ‘subsidies,” Nikkei Asian Review, July 17, 2020. , July 17, 2020.
26 Ministry of Economy, Trade, and Industry of the Government of Japan, “Australia-India-Japan Economic Ministers’ 26 Ministry of Economy, Trade, and Industry of the Government of Japan, “Australia-India-Japan Economic Ministers’
Joint Statement on Supply Chain Resilience,” September 1, 2020, Joint Statement on Supply Chain Resilience,” September 1, 2020,
~~https://www.meti.go.jp/press/2020/09/20200901008/20200901008-1.pdf~~; Kiran Sharma, “Japan, India, and Australia ; Kiran Sharma, “Japan, India, and Australia
aim to steer supply chains around China,” aim to steer supply chains around China,” Nikkei Asian Review, September 1, 2020. September 1, 2020.
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~~Prospects for U.S. Exports~~
~~Within this context, U.S. firms’ resumption of exports to China have depended on the resumption~~
~~of global port operations and China’s economic recovery. While U.S. exports potentially would~~
~~benefit from recent tariff liberalization, U.S. exports to China have been slow and uneven in their~~
~~recovery~~countries.27 The U.S. Centers for Disease Control and Prevention and the World Health Organization have not fully dismissed this possibility, but have indicated that it is extremely unlikely, raising questions about why the Chinese government might be choosing to highlight the issue.28 The Chinese government has sought to demonstrate that it has successfully suppressed the virus in China and may see benefit in publicizing that new COVID-19 outbreaks in China are tied to imports. Chinese state media have covered the COVID-19 risk assessments related to foreign cold chains—a temperature controlled supply chain often used for certain food and pharmaceuticals—in support of a broader narrative that aims to challenge other hypotheses by suggesting instead that the initial COVID-19 outbreak in Wuhan may have been tied to imported seafood. The timing of China’s actions aligns with a new government focus on domestic food security and may aim to improve the government’s control over and ability to moderate imports of seafood and meat.29 China’s new government measures involve ad hoc import restrictions, virtual spot-checks of overseas factories and food suppliers, and ramped up testing and inspection requirements. These measures are slowing imports and raising domestic health concerns about foreign seafood and meat.30 The use of virtual spot checks and corporate interviews and the timing of such measures suggest that the Chinese government also might be using inspections to gain insights into foreign-controlled cold chain storage and distribution expertise and proprietary capabilities in preparation for China’s efforts to expand in this area, including the Chinese government’s plans to distribute Chinese vaccines globally. In December 2020, Alibaba’s logistics arm, Cainiao, announced a partnership with Ethiopian Airlines to operate a global cold chain network out of the Chinese southeastern city of Shenzhen that would be capable of distributing temperature-sensitive medicines globally.31 Three Chinese state-tied companies are producing vaccines and negotiating to distribute these vaccines overseas: 1) CanSino Biologics, Inc., a company tied to China’s Academy of Military Medical Science and the Wuhan Institute of Virology32; 2) Sinovac Biotech, Ltd., a company tied to Beijing University Medical College, the Chinese Academy of Medical Sciences, the National Institute for the Control of Pharmaceutical and Biological Products, and the National Institute for Viral Disease Control and Prevention33 (the 27 “TIMELINE—China’s Battle with Coronavirus on Frozen Food and Packaging,” Reuters, December 4, 2020, https://www.reuters.com/article/health-coronavirus-china-food/timeline-chinas-battle-with-coronavirus-on-frozen-food-and-packaging-idUSL1N2IK0K9. 28 Jon Emont, Phred Dvorak, and Liyan Qi, “China Wants to Screen You for Coronavirus—and Your Frozen Fish,” The Wall Street Journal, October 16, 2020, https://www.wsj.com/articles/china-wants-to-screen-you-for-coronavirusand-your-frozen-fish-11602841654. 29 See CRS In Focus IF11684, China’s 14th Five-Year Plan: A First Look, by Karen M. Sutter and Michael D. Sutherland. 30 Hallie Gu and Dominique Patton, “Steak Out: China’s Coronavirus Testing Chokes Beef Trade,” Reuters, November 27, 2020, https://www.reuters.com/article/us-health-coronavirus-china-beef/steak-out-chinas-coronavirus-testing-chokes-beef-trade-idUSKBN2870JN and GT Staff Reporters, “Chinese Consumers, Markets, Importers, Wary of Imported Food Amid Surge in COVID-19 Infections,” Global Times, November 29, 2020, https://www.globaltimes.cn/content/1208407.shtml. 31 Rita Liao, “Alibaba and Ethiopian Airlines to Launch Cold Chain Exporting China’s COVID Vaccines,” TechCrunch, December 3, 2020, https://techcrunch.com/2020/12/03/alibaba-ethiopian-airlines-to-ship-covid-vaccines/. 32 CanSino Biologics, Inc. 2019 Annual Report, https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0408/2020040800836.pdf. 33 Company website at http://www.sinovac.com/?optionid=454. Congressional Research Service 8 COVID-19: China Medical Supply Chains and Broader Trade Issues company has been penalized for high profile pharmaceutical corruption cases in the past)34; and 3) China National Biotechnology Group, also known as Sinopharm, a state company that has two different vaccines in development and is also invested in Germany’s BioN-Tech through one of its main shareholder’s Shanghai Fosun (Fosun Pharma is the co-owner of Sinopharm Industrial Investment, the parent company of Sinopharm).35 Chinese state-tied company, Shanghai Fosun Pharmaceutical (Group) Co., Ltd., (also known as Fosun Pharma) has a strategic alliance with U.S company Pfizer Inc.’s COVID-19 vaccine German company partner, BioN-Tech. The agreement includes an initial purchase of $50 million of BioN-Tech’s shares with the promise of an additional $85 million in investment. Fosun has the commercialization rights to BioN-Tech’s BNT 162 vaccine in China.36 Chinese media outlet Caixin reported in mid-December 2020 that Fosun Pharma will import 7.2 million doses of the Pfizer BioN-Tech vaccine in the first half of 2021.37 Prospects for U.S. Exports U.S. firms’ resumption of exports to China has depended on the resumption of global port operations and China’s economic recovery. U.S. export recovery to China has been slow and uneven. As part of the phase one trade deal that the United States and China signed in mid-. As part of the phase one trade deal that the United States and China signed in mid-
January 2020 to resolve some issues the United States raised under Section 301, the United States January 2020 to resolve some issues the United States raised under Section 301, the United States
and China agreed, effective February 14, 2020, to cut by 50% the tariffs they imposed in and China agreed, effective February 14, 2020, to cut by 50% the tariffs they imposed in
September 2019. China announced a tariff exemption process for 700 tariff lines, including some September 2019. China announced a tariff exemption process for 700 tariff lines, including some
agriculture, medical supplies, raw materials, and industrial inputs. agriculture, medical supplies, raw materials, and industrial inputs.
With China’s recovery, the U.S. government could press China to make up for lost time on U.S. With China’s recovery, the U.S. government could press China to make up for lost time on U.S.
purchases. purchases. The COVID-19 COVID-19 pandemic has made it difficult for both sides to meet these targets, however, given has made it difficult for both sides to meet these targets, however, given
the economic fallout in both countries. China’s efforts to diversify import sources for key the economic fallout in both countries. China’s efforts to diversify import sources for key
goods—such as energy and agriculture—have potentially undercut China’s capacity to meet its goods—such as energy and agriculture—have potentially undercut China’s capacity to meet its
U.S. commitments.U.S. commitments.38 China imported 53.18 million tons of crude oil and replenished its strategic China imported 53.18 million tons of crude oil and replenished its strategic
petroleum reserves from non-U.S. sources during the March 2020 collapse in global oil prices.petroleum reserves from non-U.S. sources during the March 2020 collapse in global oil prices.27
39 The sustained outbreak of African Swine Flu in China has fueled an uptick in China’s pork The sustained outbreak of African Swine Flu in China has fueled an uptick in China’s pork
imports from the United States, but overall agricultural purchases remain below previous years imports from the United States, but overall agricultural purchases remain below previous years
and still fall short of negotiated targets. As part of the phase one trade deal, China committed to and still fall short of negotiated targets. As part of the phase one trade deal, China committed to
purchase at least $200 billion above a 2017 baseline amount of U.S. agriculture ($32 billion), purchase at least $200 billion above a 2017 baseline amount of U.S. agriculture ($32 billion),
~~energy ($52.4 billion), manufacturing goods ($77.7 billion), and services ($37.9~~ energy ($52.4 billion), manufacturing goods ($77.7 billion), and services ($37.9 34 Eva Dou, “History of Bribery Hangs Over Chinese Vaccine Company,” The Washington Post, December 9, 2020. 35 Chris Devonshire-Ellis, “China’s COVID-19 Vaccine Development and Availability,” China Briefing, Dezan Shira and Associates, December 3, 2020, https://www.china-briefing.com/news/chinas-covid-19-vaccine-development-and-availability/. 36 “BioN-Tech Announces Full Year 2019 Financial Results and Corporate Update,” March 31, 2020, https://investors.biontech.de/node/7356/pdf. 37 Jia Tianqiong and Denise Jia, “Exclusive: Fosun to Import 7.2 Million Doses of BioN-Tech-Pfizer Vaccine,” Caixin, December 12, 2020, https://www.caixinglobal.com/2020-12-12/exclusive-fosun-to-import-72-million-doses-of-biontech-pfizer-vaccine-101638506.html. 38 See CRS In Focus IF11667, China’s Economy in 2020: Navigating Headwinds, by Karen M. Sutter and Michael D. Sutherland. 39 Clyde Russell, “Column: China’s record crude oil, copper imports are more history lesson than predictor,” Reuters, July 14, 2020. Congressional Research Service 9 COVID-19: China Medical Supply Chains and Broader Trade Issues billion) between billion) between
January 1, 2020 and December 31, 2021.January 1, 2020 and December 31, 2021.2840 Regarding agriculture, in November 2019, China’s Regarding agriculture, in November 2019, China’s
National Development and Reform Commission (NDRC) announced detailed rules for the National Development and Reform Commission (NDRC) announced detailed rules for the
application and allocation of grain and cotton import tariff-rate quotas for 2020 that specify application and allocation of grain and cotton import tariff-rate quotas for 2020 that specify
imports for wheat (9.636 million tons, 90% state-owned trade), corn (7.2 million tons, 60% state-imports for wheat (9.636 million tons, 90% state-owned trade), corn (7.2 million tons, 60% state-
owned trade), rice (5.32 million tons, 50% state trade), and cotton (894,000 tons, 33% state-owned trade), rice (5.32 million tons, 50% state trade), and cotton (894,000 tons, 33% state-
owned trade).owned trade).2941 These tariff rate quotas appear to remain unchanged for 2021.42 NDRC included in these rules a requirement that companies applying for tariff- NDRC included in these rules a requirement that companies applying for tariff-
rate quotas must have a “positive record” in China’s corporate social credit system.rate quotas must have a “positive record” in China’s corporate social credit system.3043 This This
requirement allows the Chinese government to restrict or impose terms on certain U.S. cotton requirement allows the Chinese government to restrict or impose terms on certain U.S. cotton
exporters. China could use this requirement to create counter pressure in response to recent U.S. exporters. China could use this requirement to create counter pressure in response to recent U.S.
~~congressional action~~congressional and executive branch actions to block U.S. imports of textiles and apparel that contain cotton from to block U.S. imports of textiles and apparel that contain cotton from
China’s Xinjiang region due to concerns over forced labor there.China’s Xinjiang region due to concerns over forced labor there. 3144 With falling oil prices, China With falling oil prices, China
would arguably have to buy a significant larger volume of goods to reach its purchase obligations would arguably have to buy a significant larger volume of goods to reach its purchase obligations
that that are benchmarked by dollar value. Force Majeure Provisions The crisis also called into question China’s ability to fully implement the U.S.-China phase one trade deal signed in January 2020. The agreement has a force majeure provision—which allows parties to opt out of contractual obligations without legal penalty because of developments beyond their control—that could give China flexibility in implementing its commitments.45 The deal was finalized in December 2019 and signed in mid-January 2020, when Chinese officials reportedly knew about the severity of the COVID-19 outbreak in Wuhan, which may raise questions about the rationale and timing of the decision to include the force majeure provision. A factor further complicating the potential for resumption and expansion of U.S. exports is Chinese companies’ invocation of force majeure certifications. For example, China National Petroleum Company (CNPC) used the outbreak of COVID-19 to declare force majeure in cancelling some liquefied natural gas (LNG) imports, a move followed by a downturn in overall oil and gas demand. The Ministry of Commerce has since provided certifications to Chinese companies that need to declare force majeure.46 Chinese companies and courts rely on an interpretation of force 40~~are benchmarked by dollar value.~~

~~27 Clyde Russell, “Column: China’s record crude oil, copper imports are more history lesson than predictor,” Reuters,~~
~~July 14, 2020.~~
28 Office of the United States Trade Representative, “Economic and Trade Agreement Between the Government of the Office of the United States Trade Representative, “Economic and Trade Agreement Between the Government of the
United States of America and the Government of the People’s Republic of China,” January 15, 2020. United States of America and the Government of the People’s Republic of China,” January 15, 2020.
2941 National Development and Reform Commission of the People’s Republic of China, National Development and Reform Commission of the People’s Republic of China, ~~“关于 2020 年粮食棉花进口关~~
~~税配额申请和分配细则的公告 2019 年第 9 号~~“关于2020年粮食棉花进口关税配额申请和分配细则的公告 2019年第9号 (Announcement Regarding Application and Distribution Rules for (Announcement Regarding Application and Distribution Rules for
Import Tariff Rate Quotas for Grain and Cotton)” September 29, 2019, Import Tariff Rate Quotas for Grain and Cotton)” September 29, 2019,
https://www.ndrc.gov.cn/xxgk/zcfb/gg/201909/t20190930_1181887.html.https://www.ndrc.gov.cn/xxgk/zcfb/gg/201909/t20190930_1181887.html.
~~30 CRS In Focus IF11342, China’s Corporate Social Credit System, by Michael D. Sutherland.~~
~~31 Austin Ramzy, “U.S. Lawmakers Propose Tough Limits on Imports from Xinjiang,” The New York Times, March 11,~~
~~2020.~~
~~Congressional Research Service~~
8

~~link to page 56~~ ~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~Force Majeure Provisions~~
~~The crisis also called into question China’s ability to implement the U.S.-China phase one trade~~
~~deal signed in January 2020. The agreement has a force majeure provision—which allows parties~~
~~to opt out of contractual obligations without legal penalty because of developments beyond their~~
~~control—that could give China flexibility in implementing its commitments.32 The deal was~~
~~finalized in December 2019 and signed in mid-January 2020, when Chinese officials reportedly~~
~~knew about the severity of the COVID-19 outbreak in Wuhan, which raises questions about the~~
~~rationale and timing of the decision to include the force majeure provision. A factor further~~
~~complicating the potential for resumption and expansion of U.S. exports is Chinese companies’~~
~~invocation of force majeure certifications. For example, China National Petroleum Company~~
~~(CNPC) used the outbreak of COVID-19 to declare force majeure in cancelling some liquefied~~
~~natural gas (LNG) imports, a move followed by a downturn in overall oil and gas demand. The~~
~~Ministry of Commerce has since provided free certifications to Chinese companies that need to~~
declare force majeure.33 Chinese companies and courts rely on an interpretation of force majeure
42 United Nations Food and Agriculture Organisation, “China (mainland) sets 2021 low tariff import quotas,” September 18, 2020, http://www.fao.org/giews/food-prices/food-policies/detail/en/c/1308381/. 43 CRS In Focus IF11342, China’s Corporate Social Credit System, by Michael D. Sutherland. 44 U,S. Customs and Border Protection, “CBP Issues Detention Order on Cotton Products Made by Xinjiang Production and Construction Corps Using Prison Labor,” press release, December 2, 2020, https://www.cbp.gov/newsroom/national-media-release/cbp-issues-detention-order-cotton-products-made-xinjiang-production; United States Commission on International Religious Freedom, “USCIRF Welcomes House Passage of Uyghur Forced Labor Prevention Act,” press release, September 23, 2020, https://www.uscirf.gov/news-room/releases-statements/uscirf-welcomes-house-passage-uyghur-forced-labor-prevention-act. 45 Office of the United States Trade Representative, “Economic and Trade Agreement Between the Government of the United states of America and the Government of the People’s Republic of China,” January 15, 2020, Article 6.2. 46 Zhou Xin, “Coronavirus: Doubts Raised Over Whether Chinese Companies Can Use Force Majeure to Counter Risks,” South China Morning Post, February 25, 2020, https://www.scmp.com/economy/china-economy/article/3052277/coronavirus-doubts-raised-over-whether-chinese-companies-can. Congressional Research Service 10 link to page 60 link to page 16 link to page 16 COVID-19: China Medical Supply Chains and Broader Trade Issues majeure that is different from the standard legal interpretation in the United States, which allows both that is different from the standard legal interpretation in the United States, which allows both
parties to cancel contract terms and revert to a pre-contract baseline. In China, parties to cancel contract terms and revert to a pre-contract baseline. In China, force majeure is is
used to cancel an obligation by the party invoking the provision while the other party may still be used to cancel an obligation by the party invoking the provision while the other party may still be
obligated to perform and honor contract terms. For example, if a payment is blocked or forgiven obligated to perform and honor contract terms. For example, if a payment is blocked or forgiven
by the Chinese government, the other party may still be expected to perform according to the by the Chinese government, the other party may still be expected to perform according to the
contract terms without the foreign party being reimbursed for any additional costs incurred. contract terms without the foreign party being reimbursed for any additional costs incurred.
Moreover, Chinese courts are unlikely to allow foreign firms to prosecute Chinese firms that do Moreover, Chinese courts are unlikely to allow foreign firms to prosecute Chinese firms that do
not perform according to their contracts.not perform according to their contracts.3447
U.S. Reliance on China for Health Care and Medical
Products
In the midst of the pandemic, Congress In the midst of the pandemic, Congress ~~is expressing~~has expressed a strong interest in responding to U.S. a strong interest in responding to U.S.
shortages of medical supplies—including PPE and pharmaceuticals—as the United States steps shortages of medical supplies—including PPE and pharmaceuticals—as the United States steps
up efforts to contain and counterup efforts to contain and counter the COVID-19 COVID-19 pandemic with limited domestic stockpiles and constraints on with limited domestic stockpiles and constraints on
U.S. industrial capacity. Because of China’s role as a major U.S. and global supplier of medical U.S. industrial capacity. Because of China’s role as a major U.S. and global supplier of medical
PPE, medical devices, antibiotics, and active pharmaceutical ingredients PPE, medical devices, antibiotics, and active pharmaceutical ingredients (Appendix A), reduced , reduced
exports from China exports from China ~~have~~ led to shortages of critical medical supplies in the United States.led to shortages of critical medical supplies in the United States.3548 While While
some analysts and industry groups have pointed to tariffs as a disincentive to U.S. imports of some analysts and industry groups have pointed to tariffs as a disincentive to U.S. imports of
health and medical products, supply shortages due to the sharp spike in demand, as well as the health and medical products, supply shortages due to the sharp spike in demand, as well as the
nationalization and diversion of supply to China, appear to nationalization and diversion of supply to China, appear to be have been stronger drivers. According to stronger drivers. According to
China Customs data, in 2019 China exported $9.8 billion in China Customs data, in 2019 China exported $9.8 billion in medical supplies and $7.4 billion in ~~medical supplies and $7.4 billion in~~

~~32 Office of the United States Trade Representative, “Economic and Trade Agreement Between the Government of the~~
~~United states of America and the Government of the People’s Republic of China,” January 15, 2020, Article 6.2.~~
~~33 Zhou Xin, “Coronavirus: Doubts Raised Over Whether Chinese Companies Can Use Force Majeure to Counter~~
~~Risks,” South China Morning Post, February 25, 2020, https://www.scmp.com/economy/china-~~
~~economy/article/3052277/coronavirus-doubts-raised-over-whether-chinese-companies-can.~~
~~34 Dan Harris, “Force Majeure in the Time of Coronavirus,” China Law Blog, Harris Bricken, February 27, 2020,~~
~~https://www.chinalawblog.com/2020/02/force-majeure-in-the-time-of-coronavirus.html.~~
~~35 Finbarr Bermingham and Su-Lin Tan, “Coronavirus: China’s mas-making juggernaut cranks into gear, sparking fears~~
~~of over-reliance on world’s workshop,” South China Morning Post, March 12, 2020,~~
~~https://www.scmp.com/economy/global-economy/article/3074821/coronavirus-chinas-mask-making-juggernaut-~~
~~cranks-gear; U.S. Food and Drug Administration, “Coronavirus (COVID-19) Supply Chain Update,” Press release,~~
~~February 27, 2020, https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-supply-chain-update.~~
~~Congressional Research Service~~
9

~~link to page 14 link to page 15~~

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

organic chemicals—a figure that includes active pharmaceutical ingredients and antibiotics—to organic chemicals—a figure that includes active pharmaceutical ingredients and antibiotics—to
the United States. While there are no internationally agreed guidelines and standards for the United States. While there are no internationally agreed guidelines and standards for
classifying these products, U.S. imports of pharmaceuticals, medical equipment and products, and classifying these products, U.S. imports of pharmaceuticals, medical equipment and products, and
related supplies are estimated to have been approximately $20.7 billion (or 9.2% of U.S. imports), related supplies are estimated to have been approximately $20.7 billion (or 9.2% of U.S. imports),
according to CRS calculations using official U.S. data (according to CRS calculations using official U.S. data (~~See~~See Figure 2 andand Table 1). This number . This number
likely understates the extent to which the United States relies on China for pharmaceuticals and likely understates the extent to which the United States relies on China for pharmaceuticals and
medical equipment, products, and supplies. Some foreign products may contain Chinese inputs or medical equipment, products, and supplies. Some foreign products may contain Chinese inputs or
components, which may or may not have been substantially transformed in other countries. components, which may or may not have been substantially transformed in other countries.
However, they may not always be classified as Chinese in origin when imported into the United However, they may not always be classified as Chinese in origin when imported into the United
States. This is due, in part, to the “substantial transformation” test—used by U.S. Customs and States. This is due, in part, to the “substantial transformation” test—used by U.S. Customs and
Border Protection (CBP) to determine a product’s country of origin for trade purposes—which Border Protection (CBP) to determine a product’s country of origin for trade purposes—which
some consider to be complex, fact-specific, and subject to interpretation on a case-by-case basis some consider to be complex, fact-specific, and subject to interpretation on a case-by-case basis
that can be inconsistent and subjective.that can be inconsistent and subjective.3649 Additionally, there have been reported cases of Chinese- Additionally, there have been reported cases of Chinese-
origin products being declared as non-Chinese in origin upon their importation into the United origin products being declared as non-Chinese in origin upon their importation into the United
States (e.g., firms in other countries importing products from China and relabeling them for States (e.g., firms in other countries importing products from China and relabeling them for
export to the United States to avoid tariffs).export to the United States to avoid tariffs).3750 This number also likely understates U.S. API This number also likely understates U.S. API
~~imports from China because U.S. direct and indirect imports of API from China may not be~~
~~classified for such manufacturing use when imported into the United States.~~
~~Figure 2. U.S. Imports of Pharmaceuticals and Medical Equipment, Products, and~~
~~Supplies in 2019~~

Source: CRS using the World Customs Organization’s “HS Classification Reference for COVID-19 Medical
~~Supplies;” Gary Clyde and Jeffrey J. Schott’s “List of Pharmaceutical and Medical Device Products by Harmonized~~
~~System (HS) Code” in Local Content Requirements: A Global Problem; and Chad Bown’s “Trump’s Trade Policy Is~~

~~36 See, for example, 19 FR 141.~~
37imports from China because U.S. 47 Dan Harris, “Force Majeure in the Time of Coronavirus,” China Law Blog, Harris Bricken, February 27, 2020, https://www.chinalawblog.com/2020/02/force-majeure-in-the-time-of-coronavirus.html. 48 Finbarr Bermingham and Su-Lin Tan, “Coronavirus: China’s mas-making juggernaut cranks into gear, sparking fears of over-reliance on world’s workshop,” South China Morning Post, March 12, 2020, https://www.scmp.com/economy/global-economy/article/3074821/coronavirus-chinas-mask-making-juggernaut-cranks-gear; U.S. Food and Drug Administration, “Coronavirus (COVID-19) Supply Chain Update,” Press release, February 27, 2020, https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-supply-chain-update. 49 See, for example, 19 FR 141. 50 See, for example, U.S. Department of Justice, “Importers to Pay more than $5.2 Million to Resolve Allegations they Congressional Research Service 11 COVID-19: China Medical Supply Chains and Broader Trade Issues direct and indirect imports of API from China may not be classified for such manufacturing use when imported into the United States. Figure 2. U.S. Imports of Pharmaceuticals and Medical Equipment, Products, and Supplies in 2019 Source: CRS using the World Customs Organization’s “HS Classification Reference for COVID-19 Medical Supplies;” Gary Clyde and Jeffrey J. Schott’s “List of Pharmaceutical and Medical Device Products by Harmonized System (HS) Code” in Local Content Requirements: A Global Problem; and Chad Bown’s “Trump’s Trade Policy Is ~~See, for example, U.S. Department of Justice, “Importers to Pay more than $5.2 Million to Resolve Allegations they~~
~~Evaded Customs Duties in Violation of the False Claims Act,” U.S. Attorney’s Office, Western District of Texas, April~~
~~14, 2020; Daniel Ikenson, “Customs fraud is thriving thanks to Trump's trade war,” The Hill, June 12, 2019; Reuters~~
~~Staff, “Vietnam to crack down on Chinese goods relabeled to beat U.S. tariffs,” Reuters, June 10, 2019; and Susan~~
~~Berfield, “The Honey Launderers: Uncovering the Largest Food Fraud in U.S. History,” Bloomberg, September 20,~~
~~2013.~~
~~Congressional Research Service~~
10

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

Hampering the U.S. Fight Against COVID-19.” Data sourced from the U.S. International Trade Commission’s Hampering the U.S. Fight Against COVID-19.” Data sourced from the U.S. International Trade Commission’s
DataWeb and Global Trade Atlas. DataWeb and Global Trade Atlas.
Notes: The shares presented here cover product categories at the HTS six-digit level. China’s 9.2% share of The shares presented here cover product categories at the HTS six-digit level. China’s 9.2% share of
U.S. imports likely understates the extent to which the United States relies on China for pharmaceuticals and U.S. imports likely understates the extent to which the United States relies on China for pharmaceuticals and
medical equipment, products, and supplies because of how these imports are classified. medical equipment, products, and supplies because of how these imports are classified.
Table 1. Select U.S. Imports from China in 2019
Value (U.S. Dollars) and Share of U.S. Imports (%) Value (U.S. Dollars) and Share of U.S. Imports (%)
Share of
U.S.
HTS
Value
Imports
Number
Description
(US$)
(%)
30
Pharmaceutical Products
1,560,469,274
1.2
3005.90 3005.90
Medical Wadding, Gauze, Bandages, and Similar Articles Medical Wadding, Gauze, Bandages, and Similar Articles
314,187,928 314,187,928
49.8 49.8
3001.90 3001.90
Heparin and Its Salts Heparin and Its Salts
189,703,230 189,703,230
43.1 43.1
3005.10 3005.10
Adhesive Dressing Articles Adhesive Dressing Articles
179,153,921 179,153,921
28.8 28.8
3006.50 3006.50
First-Aid Boxes and Kits First-Aid Boxes and Kits
27,482,506 27,482,506
72.4 72.4
Evaded Customs Duties in Violation of the False Claims Act,” U.S. Attorney’s Office, Western District of Texas, April 14, 2020; Daniel Ikenson, “Customs fraud is thriving thanks to Trump’s trade war,” The Hill, June 12, 2019; Reuters Staff, “Vietnam to crack down on Chinese goods relabeled to beat U.S. tariffs,” Reuters, June 10, 2019; and Susan Berfield, “The Honey Launderers: Uncovering the Largest Food Fraud in U.S. History,” Bloomberg, September 20, 2013. Congressional Research Service 12 COVID-19: China Medical Supply Chains and Broader Trade Issues Share of U.S. HTS Value Imports Number Description (US$) (%) 3006.70 3006.70
Gel Preparations (Lubricants) for Operations or Gel Preparations (Lubricants) for Operations or
7,487,524 7,487,524
20.8 20.8
Physical Exams Physical Exams
3002.11 3002.11
Malaria Diagnostic Test Kits Malaria Diagnostic Test Kits
914,555 914,555
57.7 57.7

2941
Antibiotics
307,137,836
35.9
2941.30 2941.30
Tetracyclines and Derivatives Tetracyclines and Derivatives
93,302,575 93,302,575
90.1 90.1
2941.10 2941.10
Penicil in and Derivatives Penicil in and Derivatives
59,093,397 59,093,397
51.8 51.8
2941.50 2941.50
Erythromycin and Derivatives Erythromycin and Derivatives
4,659,438 4,659,438
23.5 23.5
2941.20 2941.20
Streptomycins and Derivatives Streptomycins and Derivatives
4,453,931 4,453,931
30.1 30.1
2941.40 2941.40
Chloramphenicol and Derivatives Chloramphenicol and Derivatives
921,074 921,074
93.2 93.2
2941.90 2941.90
Other Antibiotics (NESOI) Other Antibiotics (NESOI)
144,707,421 144,707,421
24.0 24.0

9018
Medical Instruments, Appliances, and Parts (Including
1,700,501,270
6.2
Electro-Medical and Sight-Testing)
9018.19 9018.19
Electro-Diagnostic Equipment and other Apparatus For Electro-Diagnostic Equipment and other Apparatus For
368,723,243 368,723,243
9.7 9.7
Functional Exploratory Examination or Checking Functional Exploratory Examination or Checking
Physiological Parameters (Including Parts and Physiological Parameters (Including Parts and
Accessories) Accessories)
9018.31 9018.31
Syringes (Including Parts and Accessories) Syringes (Including Parts and Accessories)
106,902,008 106,902,008
14.4 14.4
9018.12 9018.12
Ultrasonic Scanning Apparatus Ultrasonic Scanning Apparatus
78,806,780 78,806,780
19.9 19.9
9018.20 9018.20
Ultraviolet or Infrared Ray Apparatus (Including Parts Ultraviolet or Infrared Ray Apparatus (Including Parts
11,493,518 11,493,518
14.6 14.6
and Accessories) and Accessories)

9019
Mechano-Therapy and Respiration Apparatus,
1,386,955,875
32.5
Including Parts and Accessories
9019.10.20 9019.10.20
Mechano-Therapy Appliances and Massage Apparatus Mechano-Therapy Appliances and Massage Apparatus
918,922,381 918,922,381
58.5 58.5
~~Congressional Research Service~~
11

~~link to page 17~~ ~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~Share of~~
~~U.S.~~
~~HTS~~
~~Value~~
~~Imports~~
~~Number~~
~~Description~~
~~(US$)~~
~~(%)~~
9019.20.00 9019.20.00
Medical Ventilators and Other Artificial Respiration Medical Ventilators and Other Artificial Respiration
449,688,296 449,688,296
17.0 17.0
Equipment Equipment
9019.10.60 9019.10.60
Select Psychological Aptitude Testing Equipment Select Psychological Aptitude Testing Equipment
12,155,935 12,155,935
29.8 29.8
9019.10.40 9019.10.40
Electrical Psychological Aptitude Testing Equipment Electrical Psychological Aptitude Testing Equipment
6,189,263 6,189,263
57.9 57.9

9020
Breathing Appliances and Gas Masks Having
10,002,578
4.0
Mechanical Parts or Replacement Filters, Including
Parts and Accessories
9020.00.60 9020.00.60
Breathing Appliances and Gas Masks Breathing Appliances and Gas Masks
5,448,928 5,448,928
3.1 3.1
9020.00.90 9020.00.90
Parts and Accessories of Breathing Appliances and Gas Parts and Accessories of Breathing Appliances and Gas
4,124,104 4,124,104
7.2 7.2
Masks Masks

9021
Orthopedic and Other Appliances to Compensate for
930,437,769
6.8
a Defect, Including Parts and Accessories
Congressional Research Service 13 link to page 18 COVID-19: China Medical Supply Chains and Broader Trade Issues Share of U.S. HTS Value Imports Number Description (US$) (%) 9021.10 9021.10
Orthopedic of Fracture Appliances Orthopedic of Fracture Appliances
323,279,299 323,279,299
13.1 13.1

9022
X-Ray Apparatus and Parts
492,398,140
11.0
9022.12 9022.12
Computed Tomography (CT) Apparatus Computed Tomography (CT) Apparatus
49,051,037 49,051,037
7.2 7.2
Source: CRS with data from the U.S. International Trade Commission’s DataWeb. CRS with data from the U.S. International Trade Commission’s DataWeb.
While the United States depends on China for low-end PPE and API, the United States depends While the United States depends on China for low-end PPE and API, the United States depends
more on Europe and select Asian countries for high-end medical products. The United States is a more on Europe and select Asian countries for high-end medical products. The United States is a
global leader in advanced medical equipment and pharmaceutical innovation—areas where China global leader in advanced medical equipment and pharmaceutical innovation—areas where China
is seeking is seeking to gain ground ground inthrough its industrial its industrial ~~policie~~spolicies (Figure 3). ~~(Figure 3).~~
~~Congressional Research Service~~
12

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

Figure 3. U.S. Import and Exports of Select Medical Products in 2019

Source: CRS using data from the U.S. International Trade Commission’s DataWeb and Global Trade Atlas. CRS using data from the U.S. International Trade Commission’s DataWeb and Global Trade Atlas.
Congressional Research Service 14 link to page 20 link to page 22 COVID-19: China Medical Supply Chains and Broader Trade Issues China Nationalizes Medical Production and Supply
In early February 2020, the Chinese government nationalized control of the production and In early February 2020, the Chinese government nationalized control of the production and
dissemination of medical supplies in China. Concerned about shortages and its ability to contain dissemination of medical supplies in China. Concerned about shortages and its ability to contain
COVID-19, the Chinese government transferred authority over the production and distribution of COVID-19, the Chinese government transferred authority over the production and distribution of
medical supplies from the Ministry of Information Industry and Technology (MIIT) to the NDRC, medical supplies from the Ministry of Information Industry and Technology (MIIT) to the NDRC,
China’s powerful central economic planning ministry. NDRC commandeered medical China’s powerful central economic planning ministry. NDRC commandeered medical
manufacturing and logistics down to the factory level and manufacturing and logistics down to the factory level and ~~has been directing~~directed the production and the production and
distribution of all medical-related production, including U.S. companies’ production lines in distribution of all medical-related production, including U.S. companies’ production lines in
China, for domestic use.China, for domestic use.3851 In response to government directives, foreign firms with significant In response to government directives, foreign firms with significant
production capacity in China, including 3M, Foxconn, and General Motors, shifted significant production capacity in China, including 3M, Foxconn, and General Motors, shifted significant
elements of their operations to manufacturing medical PPE.elements of their operations to manufacturing medical PPE.3952 By late February 2020, China had ~~By late February 2020, China had~~

~~38 Zhang Pinghui and Zhou Xin, “Coronavirus: China Shifts Responsibility Over Medical Supplies Amid Mask~~
~~Shortage, Rising Death Toll,” South China Morning Post, February 3, 2020, updated on February 14, 2020,~~
~~https://www.scmp.com/economy/china-economy/article/3048744/coronavirus-mask-shortage-prompts-beijing-tweak-~~
~~authority.~~
~~39 “Exclusive: Unilever, 3M, on list of firms eligible for China loans to ease coronavirus crisis – sources,” Reuters,~~
~~Congressional Research Service~~
13

~~link to page 19 link to page 20 link to page 19~~ ~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

ramped up face mask production—both basic surgical masks and N95 masks—from a baseline of ramped up face mask production—both basic surgical masks and N95 masks—from a baseline of
20 million a day to over 100 million a day. 20 million a day to over 100 million a day.
China’s nationalization efforts, while understandable as part of its efforts to address an internal China’s nationalization efforts, while understandable as part of its efforts to address an internal
health crisis, may have denied the United States and other countries that depend on open and free health crisis, may have denied the United States and other countries that depend on open and free
markets for their health care supply chains timely access to critical medical supplies (Seemarkets for their health care supply chains timely access to critical medical supplies (See Table 2
and Table 3)..4053 On February 3, 2020, China’s Ministry of Commerce directed its bureaucracy, On February 3, 2020, China’s Ministry of Commerce directed its bureaucracy,
local governments and industry to secure critical technology, medical supplies, and medical-local governments and industry to secure critical technology, medical supplies, and medical-
related raw material inputs from the global market,related raw material inputs from the global market,4154 a situation that likely further exacerbated a situation that likely further exacerbated
supply shortages in the United States and other markets. To ensure sufficient domestic supplies to supply shortages in the United States and other markets. To ensure sufficient domestic supplies to
counter COVID-19, China’s Ministry of Commerce (MOFCOM) also called on its regional counter COVID-19, China’s Ministry of Commerce (MOFCOM) also called on its regional
offices in China and overseas to work with PRC industry associations to prioritize securing offices in China and overseas to work with PRC industry associations to prioritize securing
supplies from global sources and importing these products. The Ministry of Commerce provided supplies from global sources and importing these products. The Ministry of Commerce provided
a list of 51 medical suppliers and distributors in 14 countries and regions to target in quickly a list of 51 medical suppliers and distributors in 14 countries and regions to target in quickly
assuring supply. The Ministry also prioritized food security and the need to increase meat assuring supply. The Ministry also prioritized food security and the need to increase meat
~~imports.42 China’s trade data shows that these policies led to steep increases in China’s imports of~~
~~essential PPE and medical supplies, including the raw materials needed to make products such as~~
~~N95 masks. The policies also contributed to sharp decreases in China’s exports of these critical~~
~~medical products to the world. (See Table 2.)~~
~~On March 29, 2020, the Australian government imposed new temporary restrictions on all foreign~~
~~investment proposals in Australia out of concern that strategic investors—particularly those of~~
~~Chinese origin—might target distressed assets. This comes after authorities discovered two~~
~~instances of Chinese property developers in Australia purchasing large volumes of medical~~
~~supplies (and precious metals) for shipment to China.43 Risland—a wholly owned subsidiary of~~
~~one of China’s largest property developers, Country Garden Holdings—reportedly shipped 82~~
~~tons of medical supplies from Australia to China on February 24, 2020. The shipment included~~

51 Zhang Pinghui and Zhou Xin, “Coronavirus: China Shifts Responsibility Over Medical Supplies Amid Mask Shortage, Rising Death Toll,” South China Morning Post, February 3, 2020, updated on February 14, 2020, https://www.scmp.com/economy/china-economy/article/3048744/coronavirus-mask-shortage-prompts-beijing-tweak-authority. 52 “Exclusive: Unilever, 3M, on list of firms eligible for China loans to ease coronavirus crisis–sources,” Reuters, February 13, 2020, https://www.reuters.com/article/us-china-health-lending-exclusive-idUSKBN20D0SQ; Yang Jian, February 13, 2020, https://www.reuters.com/article/us-china-health-lending-exclusive-idUSKBN20D0SQ; Yang Jian,
“GM, Wuling venture begins output of machines to make face masks,” “GM, Wuling venture begins output of machines to make face masks,” Automotive News China, February 20, 2020, , February 20, 2020,
https://www.autonews.com/china/gm-wuling-venture-begins-output-machines-make-face-masks.https://www.autonews.com/china/gm-wuling-venture-begins-output-machines-make-face-masks.
40 53 Zhang Pinghui and Zhou Xin, “Coronavirus: China Shifts Responsibility Over Medical Supplies Amid Mask Zhang Pinghui and Zhou Xin, “Coronavirus: China Shifts Responsibility Over Medical Supplies Amid Mask
Shortage, Rising Death Toll,” Shortage, Rising Death Toll,” South China Morning Post, February 3, 2020, updated on February 14, 2020, , February 3, 2020, updated on February 14, 2020,
https://www.scmp.com/economy/china-economy/article/3048744/coronavirus-mask-shortage-prompts-beijing-tweak-https://www.scmp.com/economy/china-economy/article/3048744/coronavirus-mask-shortage-prompts-beijing-tweak-
authority; Finbarr Bermingham and Su-Lin Tan, “Coronavirus: China’s Mask Making Juggernaut Cranks Into Gear, authority; Finbarr Bermingham and Su-Lin Tan, “Coronavirus: China’s Mask Making Juggernaut Cranks Into Gear,
Sparking Fears of Overreliance on World’s Workshop,” Sparking Fears of Overreliance on World’s Workshop,” South China Morning Post, March 12, 2020, , March 12, 2020,
https://www.scmp.com/economy/global-economy/article/3074821/coronavirus-chinas-mask-making-juggernaut-https://www.scmp.com/economy/global-economy/article/3074821/coronavirus-chinas-mask-making-juggernaut-
cranks-gear; Engen Tham, Cheng Leng, and Zhang Yan, “Exclusive: Unilever, 3M on List of Firms Eligible for China cranks-gear; Engen Tham, Cheng Leng, and Zhang Yan, “Exclusive: Unilever, 3M on List of Firms Eligible for China
Loans to Ease Coronavirus Crisis—Sources,” Loans to Ease Coronavirus Crisis—Sources,” Reuters, February 19, 2020, https://www.reuters.com/article/us-china-, February 19, 2020, https://www.reuters.com/article/us-china-
health-lending-exclusive-idUSKBN20D0SQ; Yang Jian, “GM, Wuling Venture Begins Output of Machines to Make health-lending-exclusive-idUSKBN20D0SQ; Yang Jian, “GM, Wuling Venture Begins Output of Machines to Make
Face Masks, Face Masks, Automotive News, February 20, 2020, https://www.autonews.com/china/gm-wuling-venture-begins-, February 20, 2020, https://www.autonews.com/china/gm-wuling-venture-begins-
output-machines-make-face-masks; and Luffy Liu, “700 Tech Companies in China Have Begun Making Masks,” EE output-machines-make-face-masks; and Luffy Liu, “700 Tech Companies in China Have Begun Making Masks,” EE
Times, February 13, 2020, https://www.eetimes.com/700-tech-companies-in-china-have-begun-making-masks/. Times, February 13, 2020, https://www.eetimes.com/700-tech-companies-in-china-have-begun-making-masks/.
4154 Ministry of Commerce of the People’s Republic of China, “Circular Ministry of Commerce of the People’s Republic of China, “Circular on Further Facilitating the Import and Export of on Further Facilitating the Import and Export of
Technology During the Period of Epidemic Prevention and Control,” February 4, 2020, Technology During the Period of Epidemic Prevention and Control,” February 4, 2020,
http://english.mofcom.gov.cn/article/newsrelease/significantnews/202002/20200202934774.shtml; and Ministry of http://english.mofcom.gov.cn/article/newsrelease/significantnews/202002/20200202934774.shtml; and Ministry of
Commerce of the People’s Republic of China, “Circular on Actively Expanding Imports to Combat Against Novel Commerce of the People’s Republic of China, “Circular on Actively Expanding Imports to Combat Against Novel
Coronavirus Epidemic,” February 6, 2020, Coronavirus Epidemic,” February 6, 2020,
http://english.mofcom.gov.cn/article/newsrelease/significantnews/202002/20200202934157.shtml. http://english.mofcom.gov.cn/article/newsrelease/significantnews/202002/20200202934157.shtml.
~~42 Ministry of Commerce of the People’s Republic of China, “General Office of the Ministry of Commerce Issued the~~
~~Circular on Actively Expanding Imports to Combat against Novel Coronavirus Epidemic,” press release, February 6,~~
~~2020.~~
~~43 Phillip Coorey, “China Spree Sparks FIRB Crackdown,” Financial Review, March 29, 2020,~~
~~https://www.afr.com/politics/federal/china-spree-sparks-firb-crackdown-20200329-p54exo.~~
~~Congressional Research Service~~
14

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~100,000 medical gowns and 900,000 pairs of gloves.44~~Congressional Research Service 15 link to page 20 COVID-19: China Medical Supply Chains and Broader Trade Issues imports.55 China’s trade data shows that these policies led to steep increases in China’s imports of essential PPE and medical supplies, including the raw materials needed to make products such as N95 masks. The policies also contributed to sharp decreases in China’s exports of these critical medical products to the world. (See Table 2.) On March 29, 2020, the Australian government imposed new temporary restrictions on all foreign investment proposals in Australia out of concern that strategic investors—particularly those of Chinese origin—might target distressed assets. This came after authorities discovered two instances of Chinese property developers in Australia purchasing large volumes of medical supplies (and precious metals) for shipment to China.56 Risland—a wholly owned subsidiary of one of China’s largest property developers, Country Garden Holdings—reportedly shipped 82 tons of medical supplies from Australia to China on February 24, 2020. The shipment included 100,000 medical gowns and 900,000 pairs of gloves.57 Greenland Australia—a subsidiary of Greenland Australia—a subsidiary of
another large Chinese property developer backed by the Chinese government, Greenland another large Chinese property developer backed by the Chinese government, Greenland
Group—implemented instructions from the Chinese government to secure bulk supplies of Group—implemented instructions from the Chinese government to secure bulk supplies of
medical items from the global market. Greenland reportedly sourced from Australia and other medical items from the global market. Greenland reportedly sourced from Australia and other
countries, 3 million protective masks, 700,000 hazmat suits, and 500,000 pairs of gloves for countries, 3 million protective masks, 700,000 hazmat suits, and 500,000 pairs of gloves for
export to China over several weeks in January and February 2020.export to China over several weeks in January and February 2020.4558
Table 2. Change in China’s Exports and Imports of Select Medical Products
~~YTD 2019 (~~January-FebruaryJanuary-February~~) vs. YTD 2020 (~~ 2019 vs. January-FebruaryJanuary-February) 2020
World
United States
Exports ~~Imports Exports~~ Imports Exports Imports
HS
% %
% %
% %
% %
Code
Description
Change Change
Change Change
Change Change
Change Change
6210.10 6210.10
Garments, Made-Up of Fabrics of Felts and Garments, Made-Up of Fabrics of Felts and
-13 -13
40,582 40,582
-21 -21
297,288 297,288
Nonwovens (Including Disposable Hospital Gowns Nonwovens (Including Disposable Hospital Gowns
and Lab Coats) and Lab Coats)
6307.90* 6307.90*
Made-Up Textile Articles* Made-Up Textile Articles*
-16 -16
2,176 2,176
-19 -19
1,615 1,615
2939.80 2939.80
Alkaloids Alkaloids
13 13
1,019 1,019
-18 -18
- -
4015.11 4015.11
Surgical and Medical Gloves Surgical and Medical Gloves
4 4
210 210
-8 -8
93 93
3002.14 3002.14
Immunological Products Immunological Products
-30 -30
197 197
121,302 121,302
626 626
3808.94 3808.94
Disinfectants Disinfectants
46 46
192 192
35 35
155 155
6210.30 6210.30
Women Women'’s or Girls' Protective Garments s or Girls' Protective Garments
-35 -35
188 188
-48 -48
-75 -75
9004.90 9004.90
Spectacles and Goggles Spectacles and Goggles
-20 -20
185 185
-12 -12
164 164
55 Ministry of Commerce of the People’s Republic of China, “General Office of the Ministry of Commerce Issued the Circular on Actively Expanding Imports to Combat against Novel Coronavirus Epidemic,” press release, February 6, 2020. 56 Phillip Coorey, “China Spree Sparks FIRB Crackdown,” Financial Review, March 29, 2020, https://www.afr.com/politics/federal/china-spree-sparks-firb-crackdown-20200329-p54exo. 57 Kate McKlymont, “Second Developer Flew 82 Tonnes of Medical Supplies to China,” The Sydney Morning Herald, March 26, 2020, https://www.smh.com.au/national/second-developer-flies-82-tonnes-of-medical-supplies-to-china-20200326-p54e8n.html. 58 Kate McKlymont, “Second Developer Flew 82 Tonnes of Medical Supplies to China,” The Sydney Morning Herald, March 26, 2020, https://www.smh.com.au/national/second-developer-flies-82-tonnes-of-medical-supplies-to-china-20200326-p54e8n.html. Congressional Research Service 16 COVID-19: China Medical Supply Chains and Broader Trade Issues World United States Exports Imports Exports Imports HS % % % % Code Description Change Change Change Change 9019.20 9019.20
Medical Ventilators and Respiration Apparatus Medical Ventilators and Respiration Apparatus
-20 -20
174 174
-35 -35
209 209
2936.26 2936.26
Vitamin B12 and Its Derivatives Vitamin B12 and Its Derivatives
-6 -6
113 113
-21 -21
-33 -33
6506.10 6506.10
Safety Headgear Safety Headgear
-15 -15
106 106
-19 -19
277 277
4015.19 4015.19
Gloves Gloves
-13 -13
77 77
-35 -35
514 514
8419.20 8419.20
Medical, Surgical or Laboratory Sterilizers Medical, Surgical or Laboratory Sterilizers
-34 -34
66 66
-70 -70
317 317
3926.20 3926.20
Gloves, Mittens, and Mitts of Plastics Gloves, Mittens, and Mitts of Plastics
-15 -15
66 66
-13 -13
74 74
9025.19 9025.19
Thermometers and Pyrometers Thermometers and Pyrometers
-12 -12
65 65
-16 -16
15 15
9020.00 9020.00
Breathing Appliances and Gas Masks Having Breathing Appliances and Gas Masks Having
-23 -23
34 34
27 27
5 5
Mechanical Parts or Replaceable Filters Mechanical Parts or Replaceable Filters
3005.90 3005.90
Wadding, Gauze, Bandage, and Similar Articles for Wadding, Gauze, Bandage, and Similar Articles for
-12 -12
27 27
-8 -8
131 131
Medical, Surgical Purposes Medical, Surgical Purposes
3004.20 3004.20
Medicaments Containing Antibiotics Medicaments Containing Antibiotics
-11 -11
23 23
-18 -18
69 69

~~44 Kate McKlymont, “Second Developer Flew 82 Tonnes of Medical Supplies to China,” The Sydney Morning Herald,~~
~~March 26, 2020, https://www.smh.com.au/national/second-developer-flies-82-tonnes-of-medical-supplies-to-china-~~
~~20200326-p54e8n.html.~~
~~45 Kate McKlymont, “Second Developer Flew 82 Tonnes of Medical Supplies to China,” The Sydney Morning Herald,~~
~~March 26, 2020, https://www.smh.com.au/national/second-developer-flies-82-tonnes-of-medical-supplies-to-china-~~
~~20200326-p54e8n.html.~~
~~Congressional Research Service~~
15

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~World~~
~~United States~~
~~Exports Imports Exports Imports~~
HS
%
%
%
%
~~Code~~
~~Description~~
~~Change~~
~~Change~~
~~Change~~
~~Change~~
4818.90 4818.90
Bed Sheets and Similar Household or Hospital Bed Sheets and Similar Household or Hospital
-12 -12
21 21
-7 -7
-26 -26
Articles of Paper Articles of Paper
6505.00 6505.00
Hats and Other Headgear of Textile Fabric Hats and Other Headgear of Textile Fabric
-22 -22
16 16
-24 -24
-8 -8
3702.10 3702.10
X-Ray Film in Rolls X-Ray Film in Rolls
-43 -43
15 15
- -
50 50
9022.90 9022.90
X-Ray Generators, High Tension Generators, X-Ray Generators, High Tension Generators,
-11 -11
15 15
-17 -17
12 12
Control Panels and Desks, Screens, Examination Or Control Panels and Desks, Screens, Examination Or
Treatment Tables, Chairs Treatment Tables, Chairs
3402.20 3402.20
Surface-Active Preparations, Washing Surface-Active Preparations, Washing ~~Preparations,~~
-18 -18
8 8
-21 -21
-18 -18
Preparations, and Cleaning Preparations and Cleaning Preparations
9022.30 9022.30
X-Ray Tubes X-Ray Tubes
-17 -17
5 5
115 115
-6 -6
6116.10 6116.10
Gloves Gloves
-16 -16
-11 -11
-21 -21
-86 -86
2936.27 2936.27
Vitamin C Vitamin C
-39 -39
-16 -16
-37 -37
-95 -95
9025.11 9025.11
Thermometers and Pyrometers Thermometers and Pyrometers
-31 -31
-22 -22
-10 -10
299 299
6216.00 6216.00
Gloves, Mittens, and Mitts Gloves, Mittens, and Mitts
-27 -27
-22 -22
-30 -30
25 25
6210.40 6210.40
Men's Or Boys' Protective Garments Men's Or Boys' Protective Garments
-25 -25
-23 -23
-28 -28
-63 -63
9018.31 9018.31
Syringes Syringes
-21 -21
-28 -28
-50 -50
-18 -18
2847.00 2847.00
Hydrogen Peroxide Hydrogen Peroxide
-86 -86
-29 -29
-100 -100
4 4
2941.10 2941.10
Penicil in and Derivatives Penicil in and Derivatives
-24 -24
-34 -34
-17 -17
- -
3004.42 3004.42
Medicaments Containing Pseudoephedrine Medicaments Containing Pseudoephedrine
-61 -61
- -
- -
- -
3003.60 3003.60
Medicaments Containing Antimalarial Active Medicaments Containing Antimalarial Active
-98 -98
- -
- -
- -
Principles Principles
Source: CRS analysis, with data from China Customs and Global Trade Atlas (March 31, 2020). CRS analysis, with data from China Customs and Global Trade Atlas (March 31, 2020).
Notes: *N95 and other protective masks have historically been classified under tariff subheading 6307.99.9889, *N95 and other protective masks have historically been classified under tariff subheading 6307.99.9889,
which includes other miscellaneous textile article made from similar materials. which includes other miscellaneous textile article made from similar materials.

Congressional Research Service 17 COVID-19: China Medical Supply Chains and Broader Trade Issues Table 3. U.S. Imports from China in 2019: COVID-19 Related Medical Supplies
2019 Value (U.S. Dollars), Value (U.S. Dollars), 2019 Share of U.S. Imports (%), and Change from Share of U.S. Imports (%), and Change from ~~Previous Year~~2018 (%) (%)
Share
of U.S.
Change
HS
China'’s
Imports
2019/18
Category
Product Description
Number
Rank
Value (US$)
(%)
(%)
I. COVID-19 Test I. COVID-19 Test
COVID-19 test kits (diagnostic COVID-19 test kits (diagnostic
3822.00 3822.00
7 7
212,319,127 212,319,127
5.4 5.4
2.7 2.7
Kits/Instruments Kits/Instruments
reagents based on polymerase chain reagents based on polymerase chain
and Apparatus and Apparatus
reaction nucleic acid test) reaction nucleic acid test)
Used in Diagnostic Used in Diagnostic
Tests Tests
COVID-19 test kits (diagnostic COVID-19 test kits (diagnostic
3002.15 3002.15
16 16
21,754,253 21,754,253
0.1 0.1
-59.4 -59.4
reagents based on immunological reagents based on immunological
reactions) reactions)
~~Congressional Research Service~~
16

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~Share~~
~~of U.S.~~
~~Change~~
HS
~~China's~~
~~Imports~~
~~2019/18~~
~~Category~~
~~Product Description~~
~~Number~~
~~Rank~~
~~Value (US$)~~
~~(%)~~
~~(%)~~
COVID-19 diagnostic test COVID-19 diagnostic test
9027.80 9027.80
3 3
155,359,874 155,359,874
9.5 9.5
-1.4 -1.4
instruments and apparatus instruments and apparatus
(instruments used in clinical (instruments used in clinical
laboratories for In Vitro Diagnosis) laboratories for In Vitro Diagnosis)

II. Protective II. Protective
Face and Eye Protection
Garments Garments
Textile face-masks, without a Textile face-masks, without a
6307.90 6307.90
1 1
3,171,956,472 3,171,956,472
71.7 71.7
6.5 6.5
replaceable filter or mechanical replaceable filter or mechanical
parts, including surgical masks and parts, including surgical masks and
disposable face-masks made of disposable face-masks made of
non-woven textiles. non-woven textiles.
Gas masks with mechanical parts Gas masks with mechanical parts
9020.00 9020.00
7 7
10,002,578 10,002,578
4.0 4.0
26.3 26.3
or replaceable filters for or replaceable filters for
protection against biological protection against biological
agents. Also includes such masks agents. Also includes such masks
incorporating eye protection or incorporating eye protection or
facial shields. facial shields.
Protective spectacles and goggles Protective spectacles and goggles
9004.90 9004.90
1 1
503,787,243 503,787,243
54.8 54.8
6.8 6.8

Gloves
Plastic gloves Plastic gloves
3926.20 3926.20
1 1
863,056,388 863,056,388
77.2 77.2
-24.3 -24.3
Surgical rubber gloves Surgical rubber gloves
4015.11 4015.11
6 6
1,081,073 1,081,073
0.3 0.3
9.6 9.6
Other rubber gloves Other rubber gloves
4015.19 4015.19
3 3
252,443,610 252,443,610
11.0 11.0
-5.6 -5.6
Knitted or crocheted gloves Knitted or crocheted gloves
6116.10 6116.10
1 1
363,733,689 363,733,689
53.6 53.6
11.2 11.2
which have been impregnated or which have been impregnated or
covered with plastics or rubber covered with plastics or rubber
Textile gloves that are not knitted Textile gloves that are not knitted
6216.00 6216.00
1 1
195,084,793 195,084,793
54.7 54.7
1.9 1.9
or crocheted or crocheted

Other
Disposable hair nets Disposable hair nets
6505.00 6505.00
1 1
934,958,363 934,958,363
51.9 51.9
-21.3 -21.3
Protective garments for Protective garments for
6210.10 6210.10
1 1
440,561,626 440,561,626
54.3 54.3
-0.7 -0.7
surgical/medical use made up of surgical/medical use made up of
felt or nonwovens felt or nonwovens
Other protective garments of Other protective garments of
6210.20 6210.20
1 1
27,688,815 27,688,815
64.2 64.2
15.4 15.4
textiles of rubberized textile textiles of rubberized textile
fabrics or woven fabrics fabrics or woven fabrics
Other protective garments of Other protective garments of
6210.30 6210.30
1 1
55,082,976 55,082,976
55.5 55.5
37.3 37.3
textiles of rubberized textile textiles of rubberized textile
fabrics or woven fabrics fabrics or woven fabrics
Other protective garments of Other protective garments of
6210.40 6210.40
1 1
323,357,757 323,357,757
44.8 44.8
5.0 5.0
textiles of rubberized textile textiles of rubberized textile
fabrics or woven fabrics fabrics or woven fabrics
Congressional Research Service 18 COVID-19: China Medical Supply Chains and Broader Trade Issues Share of U.S. Change HS China’s Imports 2019/18 Category Product Description Number Rank Value (US$) (%) (%) Other protective garments of Other protective garments of
6210.50 6210.50
1 1
202,474,607 202,474,607
45.4 45.4
8.8 8.8
textiles of rubberized textile textiles of rubberized textile
fabrics or woven fabrics fabrics or woven fabrics
III. III.
Liquid fil ed thermometer for direct Liquid fil ed thermometer for direct
9025.11 9025.11
1 1
15,364,796 15,364,796
81.0 81.0
20.6 20.6
Thermometers Thermometers
reading reading
Other thermometers Other thermometers
9025.19 9025.19
1 1
217,189,968 217,189,968
36.2 36.2
-25.5 -25.5
IV. Disinfectants Alcohol solution Alcohol solution
2207.10 2207.10
23 23
25,420 25,420
0.0 0.0
154.2 154.2
~~Congressional Research Service~~
17

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~Share~~
~~of U.S.~~
~~Change~~
HS
~~China's~~
~~Imports~~
~~2019/18~~
~~Category~~
~~Product Description~~
~~Number~~
~~Rank~~
~~Value (US$)~~
~~(%)~~
~~(%)~~
~~IV. Disinfectants~~and Sterilization Products
Alcohol solution Alcohol solution
2208.90 2208.90
2 2
40,916,542 40,916,542
2.1 2.1
-20.5 -20.5
~~and Sterilization~~
~~Products~~
Hand sanitizer Hand sanitizer
3824.99 3824.99
2 2
365,615,644 365,615,644
15.3 15.3
-16.7 -16.7
Hand sanitizer Hand sanitizer
3402.20 3402.20
3 3
39,757,125 39,757,125
7.6 7.6
-33.6 -33.6
Medical, surgical or laboratory Medical, surgical or laboratory
8419.20 8419.20
13 13
1,854,603 1,854,603
1.0 1.0
22.7 22.7
sterilizers sterilizers
Hydrogen peroxide Hydrogen peroxide
2847.00 2847.00
15 15
10,089 10,089
0.0 0.0
-61.6 -61.6
Hydrogen peroxide presented as a Hydrogen peroxide presented as a
3004.90 3004.90
15 15
475,162,117 475,162,117
0.8 0.8
19.5 19.5
medicament medicament
Other chemical disinfectants Other chemical disinfectants
3808.94 3808.94
2 2
8,841,055 8,841,055
10.3 10.3
132.5 132.5
V. Other Medical V. Other Medical
Computed tomography (CT) Computed tomography (CT)
9022.12 9022.12
4 4
49,051,037 49,051,037
7.2 7.2
-54.8 -54.8
Devices Devices
scanners scanners
Extracorporeal membrane Extracorporeal membrane
9018.90 9018.90
5 5
758,088,695 758,088,695
5.8 5.8
14.6 14.6
oxygenation oxygenation
Medical ventilators and other oxygen Medical ventilators and other oxygen
9019.20 9019.20
2 2
449,688,296 449,688,296
17.0 17.0
-2.9 -2.9
therapy apparatus therapy apparatus
Patient monitoring devices Patient monitoring devices
9018.19 9018.19
4 4
368,723,243 368,723,243
9.7 9.7
-10.1 -10.1
VI. Medical VI. Medical
Wadding, gauze, bandages, cotton Wadding, gauze, bandages, cotton
3005.90 3005.90
1 1
314,187,928 314,187,928
49.8 49.8
10.6 10.6
Consumables Consumables
sticks and similar articles sticks and similar articles
Syringes, with or without needles Syringes, with or without needles
9018.31 9018.31
2 2
106,902,008 106,902,008
14.4 14.4
6.3 6.3
Tubular metal needles and needles for Tubular metal needles and needles for
9018.32 9018.32
8 8
22,465,545 22,465,545
2.9 2.9
11.6 11.6
sutures sutures
Needles, catheters, cannulae, and the Needles, catheters, cannulae, and the
9018.39 9018.39
6 6
229,655,282 229,655,282
3.7 3.7
7.0 7.0
like like
Intubation kits Intubation kits
9018.90 9018.90
5 5
758,088,695 758,088,695
5.8 5.8
14.6 14.6
Paper bed sheets Paper bed sheets
4818.90 4818.90
1 1
356,642,980 356,642,980
74.9 74.9
9.9 9.9
Source: CRS using the World Customs Organization’s “HS Classification Reference for COVID-19 Medical Supplies” and CRS using the World Customs Organization’s “HS Classification Reference for COVID-19 Medical Supplies” and
data from Global Trade Atlas. data from Global Trade Atlas.
Notes: The international Harmonized System (HS) for classifying goods is a six-digit code system, and The international Harmonized System (HS) for classifying goods is a six-digit code system, and
classification at the eight and ten-digit levels varies by country. The figures presented here may overestimate the classification at the eight and ten-digit levels varies by country. The figures presented here may overestimate the
actual value of U.S. imports of medical products, as it is not always possible to identify specific, individual actual value of U.S. imports of medical products, as it is not always possible to identify specific, individual
products even at the most disaggregated level. products even at the most disaggregated level.
Congressional Research Service 19 COVID-19: China Medical Supply Chains and Broader Trade Issues Implications of China’s Export Constraints: U.S. Shortages and
Policy Response
As the United States ramped up efforts to contain the spread of COVID-19, reduced production As the United States ramped up efforts to contain the spread of COVID-19, reduced production
and exports of pharmaceuticals and PPE from China exacerbated shortages of critical medical and exports of pharmaceuticals and PPE from China exacerbated shortages of critical medical
supplies. Minnesota-based 3M, a large-scale manufacturer of N95 respirators, for example, told supplies. Minnesota-based 3M, a large-scale manufacturer of N95 respirators, for example, told
The New York Times in spring 2020 that all masks manufactured at its Shanghai factory were sold to meet that all masks manufactured at its Shanghai factory were sold to meet
China’s domestic demand; other mask manufacturers, such as Canada’s Medicom, stated that the China’s domestic demand; other mask manufacturers, such as Canada’s Medicom, stated that the
Chinese government Chinese government ~~has~~had not yet authorized them to export PPE. not yet authorized them to export PPE.4659 China’s Ministry of China’s Ministry of Commerce claimed it was~~Commerce~~

~~46 Keith Bradsher and Liz Alderman, “The World Needs Masks. China Makes Them—But Has Been Hoarding Them,”~~
~~Congressional Research Service~~
18

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~has claimed it is~~ not imposing export restrictions on medical supplies, not imposing export restrictions on medical supplies,4760 but this statement may but this statement may
not apply to the not apply to the ~~current~~ situation situation asin which all of China’s domestic production all of China’s domestic production is was controlled by the controlled by the
government and geared toward domestic consumption. government and geared toward domestic consumption.
Subsequently, China’s imposition of new export quality checks for PPE, particularly masks— Subsequently, China’s imposition of new export quality checks for PPE, particularly masks—
implemented by China’s National Medical Products Administration (NMPA)—further slowed implemented by China’s National Medical Products Administration (NMPA)—further slowed
exports. On March 30, 2020, China’s Ministry of Commerce (MOFCOM) announced new exports. On March 30, 2020, China’s Ministry of Commerce (MOFCOM) announced new
qualifications for medical supply exports.qualifications for medical supply exports.4861 It announced that all medical supplies related to It announced that all medical supplies related to
COVID-19 would need to obtain qualifications from China’s National Medical Products COVID-19 would need to obtain qualifications from China’s National Medical Products
Administration (NMPA). These new requirements Administration (NMPA). These new requirements ~~appear~~appeared aimed at addressing faulty PPE that aimed at addressing faulty PPE that
several foreign government buyers found in large PPE shipments from China. By requiring new several foreign government buyers found in large PPE shipments from China. By requiring new
certification processes, the measures also appear to have slowed legitimate exports. Even certification processes, the measures also appear to have slowed legitimate exports. Even
companies producing in China for export that already had FDA approval had to meet these new companies producing in China for export that already had FDA approval had to meet these new
PRC requirements.PRC requirements.4962 Related to MOFCOM’s announcement, on March 30, 2020, NMPA issued Related to MOFCOM’s announcement, on March 30, 2020, NMPA issued
Regulatory Requirements and Standards for Coronavirus Testing Reagents and Protective
Products. These new requirements regulatedThese new requirements regulated ~~COVID-19~~ COVID-19 testing reagents as Class III medical testing reagents as Class III medical
equipment (highest risk level) and regulated medical-use masks and protective gear as Class II equipment (highest risk level) and regulated medical-use masks and protective gear as Class II
medical equipment, requiring producers to obtain licenses from provincial-level regulators prior medical equipment, requiring producers to obtain licenses from provincial-level regulators prior
to production. The NMPA classified regular masks and protective goggles as Class I medical to production. The NMPA classified regular masks and protective goggles as Class I medical
equipment, requiring producers to file with local authorities. The NMPA also released registration equipment, requiring producers to file with local authorities. The NMPA also released registration
information for seven COVID-19 products (testing kits, ventilators, medical protective wears, information for seven COVID-19 products (testing kits, ventilators, medical protective wears,
medical protective masks, medical surgical masks, single-use masks, and infrared thermometers-medical protective masks, medical surgical masks, single-use masks, and infrared thermometers-
detectors).detectors).5063
In addition to these new registration and inspection requirements, some U.S. legal experts In addition to these new registration and inspection requirements, some U.S. legal experts
observed that China may have used informal measures, such as administrative guidance, to observed that China may have used informal measures, such as administrative guidance, to
prioritize exports to certain countries ahead of the United States.prioritize exports to certain countries ahead of the United States.5164 This may have been politically This may have been politically
motivated, as China orchestrated publicized PPE deliveries to countries such as Serbia and Italy, motivated, as China orchestrated publicized PPE deliveries to countries such as Serbia and Italy,
which have signed on to China’s One Belt, One Roadwhich have signed on to China’s One Belt, One Road ~~Initiative~~ initiative and whom China sees as 59 Keith Bradsher and Liz Alderman, “The World Needs Masks. China Makes Them—But Has Been Hoarding Them,” ~~and whom China sees as~~
~~important partners for investment and trade initiatives in Europe.52 China organized a range of~~
~~government-to-government medical supply agreements around the world that sought to~~
~~emphasize the importance of relations with China and the government’s goodwill, but ran into~~
~~problems with many governments due to faulty PPE. In April and May 2020, Canada’s public~~
~~health authority reported extensive problems with KN95 respirator masks from China that were~~
~~counterfeit or otherwise failed to meet federal COVID-19 standards for medical use.53 Several~~

The New York Times, March 16, 2020, https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html. , March 16, 2020, https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html.
4760 “China Imposes No Export Ban on Masks: Commerce Official,” “China Imposes No Export Ban on Masks: Commerce Official,” Xinhua, March 5, 2020, , March 5, 2020,
http://english.www.gov.cn/statecouncil/ministries/202003/05/content_WS5e60c25dc6d0c201c2cbda0b.html. http://english.www.gov.cn/statecouncil/ministries/202003/05/content_WS5e60c25dc6d0c201c2cbda0b.html.
4861 State Council of the People’s Republic of China, “National Medical Product Administration Announcement No. 5 on State Council of the People’s Republic of China, “National Medical Product Administration Announcement No. 5 on
the Orderly Export of Medical Products (国家药品监督管理局公告 2020 年第 5 号关于有序开展医疗物资出口的the Orderly Export of Medical Products (国家药品监督管理局公告 2020 年第 5 号关于有序开展医疗物资出口的
公告), March 31, 2020, http://www.gov.cn/zhengce/zhengceku/2020-04/01/content_5497878.htm.公告), March 31, 2020, http://www.gov.cn/zhengce/zhengceku/2020-04/01/content_5497878.htm.
49 62 Kate O’Keefe, Liza Lin, and Eva Xiao, “China’s Export Restrictions Strand Medical Goods U.S. Needs to Fight Kate O’Keefe, Liza Lin, and Eva Xiao, “China’s Export Restrictions Strand Medical Goods U.S. Needs to Fight
Coronavirus, State Department Says,” Coronavirus, State Department Says,” The Wall Street Journal, April 16, 2020. April 16, 2020.
5063 China’s National Medical Products Administration, http://www.nmpa.gov.cn/WS04/CL2590/complete. China’s National Medical Products Administration, http://www.nmpa.gov.cn/WS04/CL2590/complete.
5164 “Navigating PPE Purchases from China,” Webinar with Harris Bricken Law Firm, April 23, 2020. “Navigating PPE Purchases from China,” Webinar with Harris Bricken Law Firm, April 23, 2020.
~~52 Eleanor Albert, “How a Pandemic Drew China and Serbia Closer,” The Diplomat, March 27, 2020; Xinhua, “Iron-~~
~~clad China-Serbia friendship stronger in COVID-19 fight,” April 2, 2020; Reuters, “China sends medical supplies,~~
~~experts to help Italy battle coronavirus,” March 13, 2020; Alicia Chen and Vanessa Molter, “Mask Diplomacy: Chinese~~
~~Narratives in the COVID Era,” Stanford Freeman Spogli Institute for International Studies, June 16, 2020.~~
~~53 Jim Bronskill, “Federal Government Rejects 8 Million N95 Masks from a Single Distributor,” The Canadian Press,~~
~~Congressional Research Service~~
19

~~link to page 25~~

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

Congressional Research Service 20 link to page 27 COVID-19: China Medical Supply Chains and Broader Trade Issues important partners for investment and trade initiatives in Europe.65 China organized a range of government-to-government medical supply agreements around the world that sought to emphasize the importance of relations with China and the government’s goodwill, but ran into problems with many governments due to faulty PPE. In April and May 2020, Canada’s public health authority reported extensive problems with KN95 respirator masks from China that were counterfeit or otherwise failed to meet federal COVID-19 standards for medical use.66 Several European countries, including the Netherlands and Spain, reported faulty masks and COVID-19 European countries, including the Netherlands and Spain, reported faulty masks and COVID-19
test kits.test kits.5467 Chinese propaganda efforts tied to the delivery of PPE were criticized in western Chinese propaganda efforts tied to the delivery of PPE were criticized in western
media and by European Union officials as trying to capitalize on the crisis to try and divide media and by European Union officials as trying to capitalize on the crisis to try and divide
Europe. Chinese media frequently conflated Chinese government-organized and publicized Europe. Chinese media frequently conflated Chinese government-organized and publicized
shipments of PPE that had been procured and paid for by foreign governments as aid.shipments of PPE that had been procured and paid for by foreign governments as aid.5568
China’s exports of COVID-19-related PPE experienced a sharp uptick between March and June China’s exports of COVID-19-related PPE experienced a sharp uptick between March and June
2020, before tapering off in July with a particularly pronounced increase in N95 masks 2020, before tapering off in July with a particularly pronounced increase in N95 masks and other made-up textiles that that
peaked earlier than other products. China appears to have prioritized Europe in its export of N95 peaked earlier than other products. China appears to have prioritized Europe in its export of N95
masks, a trend that is reflected both in overall increases and shifts in market share as a percentage masks, a trend that is reflected both in overall increases and shifts in market share as a percentage
of total imports. China’s market share as a percentage of EU imports of N95 of total imports. China’s market share as a percentage of EU imports of N95 masks rose by 15 percentage points in March and October 2020, compared to the same period in 2019, while its share of U.S. imports declined by 13 percentage points. (See Table 4.)~~masks rose by 16%,~~
~~while its share of U.S. imports declined by 15%.~~ China’s market share for N95 masks in Japan, China’s market share for N95 masks in Japan,
Australia, and South Korea also declined somewhat. Australia, and South Korea also declined somewhat. ~~(See Table 4).~~
~~Figure 4. China’s Export of Select Covid-19-Related Products: Jan.-July 2020~~

Source: CRS with data from China Customs. Categories based on 6-digit product codes outlined by the World
~~Customs Organization in “HS Classification Reference for Covid-19 Medical Supplies,” ed. 2, as updated April 30,~~
~~2020.~~
Notes: Changes in the value of trade are determined by both the quantity of trade and the price of the good.
~~Many of these products experienced an increase in both price and quantity, during the March-July 2020 period.~~
~~In defining these product groups, CRS has attempted to capture the most common HS categorizations for these~~
~~items, however, some trade of these items may have been exported under additional HS codes not reflected~~
~~here, and, conversely, the product groups are not exclusive to Covid-19-related gear and may include other~~
~~similar trade. EU-27 includes the 27 member states of the European Union, excluding the United Kingdom. U.A.E.~~
~~is the United Arab Emirates.~~

65 Eleanor Albert, “How a Pandemic Drew China and Serbia Closer,” The Diplomat, March 27, 2020; Xinhua, “Iron-clad China-Serbia friendship stronger in COVID-19 fight,” April 2, 2020; Reuters, “China sends medical supplies, experts to help Italy battle coronavirus,” March 13, 2020; Alicia Chen and Vanessa Molter, “Mask Diplomacy: Chinese Narratives in the COVID Era,” Stanford Freeman Spogli Institute for International Studies, June 16, 2020. 66 Jim Bronskill, “Federal Government Rejects 8 Million N95 Masks from a Single Distributor,” The Canadian Press, May 8, 2020; Evan Dyer, “Canadian-Approved N95 Masks Targeted by Chinese Counterfeiters,” CBC News, May 14, May 8, 2020; Evan Dyer, “Canadian-Approved N95 Masks Targeted by Chinese Counterfeiters,” CBC News, May 14,
2020, and Stephen Chase, “Canada Says One Million Face Masks from China Failed to Meet Federal Standards,” The 2020, and Stephen Chase, “Canada Says One Million Face Masks from China Failed to Meet Federal Standards,” The
Globe and Mail, April 24, 2020. Globe and Mail, April 24, 2020.
5467 Elena Sanchez Nicolas, “EU Fighting Faulty Medical Supplies,” Elena Sanchez Nicolas, “EU Fighting Faulty Medical Supplies,” EU Observer, April 2, 2020. , April 2, 2020.
5568 Charlie Campbell, “China’s ‘Mask Diplomacy’ is Faltering. But the U.S. Isn’t Doing Any Better,” Charlie Campbell, “China’s ‘Mask Diplomacy’ is Faltering. But the U.S. Isn’t Doing Any Better,” Time, April 3, April 3,
2020, and EU HRVP Josep Borrell, “The Coronavirus Pandemic and the New World it is Creating,” Official Website 2020, and EU HRVP Josep Borrell, “The Coronavirus Pandemic and the New World it is Creating,” Official Website
of the European Union, March 24, 2020. of the European Union, March 24, 2020.
Congressional Research Service Congressional Research Service
20

~~link to page 25~~

21 COVID-19: China Medical Supply Chains and Broader Trade Issues

~~a. HS 630790 is a higher-level classification that includes N95 masks and the Chinese standard KN95 masks~~
~~among other types of “Made-Up Textile Articles [not classified elsewhere].”~~
~~b. Other Face and Eye PPE is defined as HS 392690, 481890, 900490, and 902000.~~
~~c. Gowns and Other PPE are defined as HS 392620, 401590, 481850, 621010, 621040, 621050, and 650500.~~
~~d. PPE Gloves are defined as HS 392620, 401511, 401519, 611610, and 621600.~~
~~e. Covid-19 Test Kits and Instructions are defined as HS 300215, 382100, 382200, and 902780.~~
~~Figure 5. China’s Exports of Select Covid-19-Related Products:~~
~~Comparison of March-July 2019 and March-July~~Figure 4. China’s Export of Select Covid-19-Related Products: January-October 2020 Source: CRS with data from China Customs. Categories based on 6-digit product codes outlined by the World Customs Organization in “HS Classification Reference for Covid-19 Medical Supplies,” ed. 2, as updated April 30, 2020. Notes: Changes in the value of trade are determined by both the quantity of trade and the price of the good. Many of these products experienced an increase in both price and quantity, during the March-July 2020 period. In defining these product groups, CRS has attempted to capture the most common HS categorizations for these items, however, some trade of these items may have been exported under additional HS codes not reflected here, and, conversely, the product groups are not exclusive to Covid-19-related gear and may include other similar trade. EU-27 includes the 27 member states of the European Union, excluding the United Kingdom. U.A.E. is the United Arab Emirates. Congressional Research Service 22 link to page 29 COVID-19: China Medical Supply Chains and Broader Trade Issues Figure 5. China’s Exports of Select Covid-19-Related Products: Comparison of March-October 2019 and March-October 2020 2020

Source: CRS withCRS with data fromdata from China Customs. Categories based on 6-digit product codes outlined by the World China Customs. Categories based on 6-digit product codes outlined by the World
Customs Organization in “HS Classification Reference for Covid-19 Medical Supplies,” ed. 2, as updated April 30, Customs Organization in “HS Classification Reference for Covid-19 Medical Supplies,” ed. 2, as updated April 30,
2020. 2020.
Notes: Changes in the value of trade are determined by both the quantity of trade and the price of the good. Changes in the value of trade are determined by both the quantity of trade and the price of the good.
Many of these products experienced an increase in both price and quantity, during the 2020 period. For Many of these products experienced an increase in both price and quantity, during the 2020 period. For
definitions of the product categories and other caveats, see the notes of Table 4. definitions of the product categories and other caveats, see the notes of Table 4.
Table 4. Top Partners: Value of China’s Exports of Select Covid-19-Related ~~Medical~~
Medical Goods
Comparison of the March- Comparison of the March-~~July Period in~~October 2019 and 2019 and March-October 2020 2020

USD, Millions
% Change
Market Share (%)
Mar.-
Oct. Mar.-Oct. Mar.-Oct. Mar.-Oct. Mar.-Oct. ~~Mar.-July Mar.-July~~
~~Mar.-July~~
~~July~~
~~Mar.-July~~
Top Partners
2019
2020
2019
2019
~~2019~~2020
N95 Respirator Masks and Other Made-Up Textiles (HS 630790)a
EU-27 EU-27
$ $~~409.7~~
~~$13,439.4~~
~~3180.2%~~
~~18.3%~~
~~34.6~~644.2 $16,020.4 2,386.8% 17.5% 32.4% %
United States United States
$ $~~917.0~~
~~$9,910.2~~
~~980.7%~~
~~40.9%~~
~~25.5%~~
~~Japan~~
~~$199.5~~
~~$2,925.5~~
~~1366.7%~~
~~8.9%~~
~~7.5%~~
~~United~~
~~$105.5~~
~~$2,555.6~~
~~2321.8%~~
~~4.7%~~
~~6.6%~~
~~Kingdom~~
~~Congressional Research Service~~
21

~~link to page 25 link to page 25~~ ~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~USD, Millions~~
~~% Change~~
~~Market Share (%)~~
~~Mar.-~~
~~Mar.-July Mar.-July~~
~~Mar.-July~~
~~July~~
~~Mar.-July~~
~~Top Partners~~
~~2019~~
~~2020~~
~~2019~~
~~2019~~
~~2019~~
~~Canada~~
~~$60.8~~
~~$1,223.1~~
~~1912.3%~~
~~2.7%~~
~~3.2%~~
~~Singapore~~
~~$13.6~~
~~$636.7~~
~~4565.6%~~
~~0.6%~~
~~1.6%~~
~~Australia~~
~~$55.8~~
~~$628.4~~
~~1026.6%~~
~~2.5%~~
~~1.6%~~
~~Russia~~
~~$17.5~~
~~$615.1~~
~~3416.4%~~
~~0.8%~~
~~1.6%~~
~~South Korea~~
~~$65.3~~
~~$579.9~~
~~788.0%~~
~~2.9%~~
~~1.5%~~
~~Mexico~~
~~$19.3~~
~~$401.6~~
~~1983.5%~~
~~0.9%~~
~~1.0%~~
~~All Other~~
~~$379.1~~
~~$5,929.7~~
~~1464.1%~~
~~16.9%~~
~~15.3%~~
~~World~~
~~$2,243.1~~
~~$38,845.2~~
~~1631.8~~1,504.3 $13,726.6 812.5% 40.8% 27.7% United Kingdom $175.5 $3,868.3 2,104.7%% 4.8% 7.8% Japan $348.0 $3,732.2 972.6% 9.4% 7.5% Canada $98.6 $1,638.9 1,562.0% 2.7% 3.3% Australia $94.5 $805.3 751.8% 2.6% 1.6% Russia $29.1 $719.0 2,374.4% 0.8% 1.5% Singapore $22.6 $714.8 3,059.7% 0.6% 1.4% South Korea $104.7 $704.5 573.1% 2.8% 1.4% Congressional Research Service 23 link to page 29 link to page 29 link to page 29 COVID-19: China Medical Supply Chains and Broader Trade Issues USD, Millions % Change Market Share (%) Mar.-Oct. Mar.-Oct. Mar.-Oct. Mar.-Oct. Mar.-Oct. Top Partners 2019 2020 2019 2019 2020 Mexico $30.3 $496.2 1,536.9% 0.8% 1.0% All Other $633.5 $7,092.5 1,019.7% 17.2% 14.3% World $3,685.2 $49,518.8 1,243.7% 100.0% 100.0% Other Face and Eye Personal Protection Equipment (excluding N95 masks)b United States $2,828.6 $3,573.0 26.3% 26.8% 25.7% EU-27 $1,697.8 $1,965.0 15.7% 16.1% 14.1% United Kingdom $404.5 $1,043.4 158.0% 3.8% 7.5% Japan $695.7 $846.0 21.6% 6.6% 6.1% Hong Kong $707.4 $578.4 -18.2% 6.7% 4.2% Australia $250.8 $470.3 87.5% 2.4% 3.4% South Korea $288.3 $417.1 44.7% 2.7% 3.0% Vietnam $279.8 $415.0 48.3% 2.7% 3.0% Singapore $215.8 $378.3 75.3% 2.0% 2.7% Canada $277.3 $351.9 26.9% 2.6% 2.5% All Other $2,912.6 $3,881.9 33.3% 27.6% 27.9% World $10,558.5 $13,920.4 31.8%
~~100.0%~~
~~100.0%~~
Other Face and Eye Personal Protection Equipment (excluding ~~N95~~
~~masks)b~~
~~United States~~
~~$1,750.9~~
~~$2,121.9~~
~~21.2%~~
~~27.0%~~
~~26.0%~~
~~EU-27~~
~~$1,065.2~~
~~$1,215.0~~
~~14.1%~~
~~16.4%~~
~~14.9%~~
~~United~~
~~$248.9~~
~~$538.4~~
~~116.3%~~
~~3.8%~~
~~6.6%~~
~~Kingdom~~
~~Japan~~
~~$424.3~~
~~$525.6~~
~~23.9%~~
~~6.6%~~
~~6.4%~~
~~Australia~~
~~$147.4~~
~~$323.9~~
~~119.8%~~
~~2.3%~~
~~4.0%~~
~~Hong Kong~~
~~$415.8~~
~~$313.0~~
~~-24.7%~~
~~6.4%~~
~~3.8%~~
~~South Korea~~
~~$176.1~~
~~$264.3~~
~~50.1%~~
~~2.7%~~
~~3.2%~~
~~Singapore~~
~~$127.4~~
~~$251.3~~
~~97.3%~~
~~2.0%~~
~~3.1%~~
~~Vietnam~~
~~$172.6~~
~~$236.9~~
~~37.3%~~
~~2.7%~~
~~2.9%~~
~~Canada~~
~~$174.0~~
~~$214.6~~
~~23.3%~~
~~2.7%~~
~~2.6%~~
~~All Other~~
~~$1,775.3~~
~~$2,164.4~~
~~21.9%~~
~~27.4%~~
~~26.5%~~
~~World~~
~~$6,477.9~~
~~$8,169.3~~
~~26.1~~% %
100.0% 100.0%
100.0% 100.0%
Gowns and Other Personal Protection Garmentsc
United States United States
$1,071.4 $1,071.4
$2,955.3 $2,955.3
175.8% 175.8%
30.0% 30.0%
27.4% 27.4%
EU-27 EU-27
$962.9 $962.9
$2,773.6 $2,773.6
188.0% 188.0%
26.9% 26.9%
25.7% 25.7%
United United
Kingdom $168.3 $168.3
$1,120.5 $1,120.5
565.7% 565.7%
4.7% 4.7%
10.4% 10.4%
~~Kingdom~~
Canada Canada
$113.0 $113.0
$593.9 $593.9
425.6% 425.6%
3.2% 3.2%
5.5% 5.5%
Japan Japan
$215.9 $215.9
$550.3 $550.3
154.9% 154.9%
6.0% 6.0%
5.1% 5.1%
Russia Russia
$94.3 $94.3
$511.5 $511.5
442.7% 442.7%
2.6% 2.6%
4.7% 4.7%
Australia Australia
$79.1 $79.1
$264.0 $264.0
233.6% 233.6%
2.2% 2.2%
2.4% 2.4%
Philippines Philippines
$17.2 $17.2
$139.4 $139.4
709.7% 709.7%
0.5% 0.5%
1.3% 1.3%
~~U.A.E~~United Arab
$21.4 $21.4
$124.9 $124.9
482.9% 482.9%
0.6% 0.6%
1.2% 1.2%
Emirates Saudi Arabia Saudi Arabia
$42.9 $42.9
$107.8 $107.8
151.2% 151.2%
1.2% 1.2%
1.0% 1.0%
~~Congressional Research Service~~
22

~~link to page 25 link to page 25~~ ~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~USD, Millions~~
~~% Change~~
~~Market Share (%)~~
~~Mar.-~~
~~Mar.-July Mar.-July~~
~~Mar.-July~~
~~July~~
~~Mar.-July~~
~~Top Partners~~
~~2019~~
~~2020~~
~~2019~~
~~2019~~
~~2019~~
All Other All Other
$787.9 $787.9
$1,657.7 $1,657.7
110.4% 110.4%
22.0% 22.0%
15.4% 15.4%
World World
$3,574.5 $3,574.5
$10,798.9 $10,798.9
202.1% 202.1%
100.0% 100.0%
100.0% 100.0%
Gloves: Personal Protection Equipmentd
United States United States
$ $~~626.1~~
~~$1,309.9~~
~~109.2%~~
~~32.3%~~
~~33.0%~~
~~EU-27~~
~~$407.4~~
~~$899.9~~
~~120.9%~~
~~21.0%~~
~~22.6%~~
~~United~~
~~$70.6~~
~~$410.2~~
~~481.4%~~
~~3.6%~~
~~10.3%~~
~~Kingdom~~
~~Japan~~
~~$161.4~~
~~$259.6~~
~~60.9%~~
~~8.3%~~
~~6.5%~~
~~Canada~~
~~$64.5~~
~~$183.0~~
~~183.9%~~
~~3.3%~~
~~4.6%~~
~~Russia~~
~~$40.8~~
~~$85.2~~
~~108.7%~~
~~2.1%~~
~~2.1%~~
~~Australia~~
~~$34.1~~
~~$72.6~~
~~112.7%~~
~~1.8%~~
~~1.8%~~
~~U.A.E.~~
~~$22.1~~
~~$67.7~~
~~206.2%~~
~~1.1%~~
~~1.7%~~
~~Brazil~~
~~$41.0~~
~~$45.5~~
~~10.8%~~
~~2.1%~~
~~1.1%~~
~~South Korea~~
~~$35.5~~
~~$43.6~~
~~22.9%~~
~~1.8%~~
~~1.1%~~
~~All Other~~
~~$432.6~~
~~$598.5~~
~~38.3%~~
~~22.3%~~
~~15.1%~~
~~World~~
~~$1,936.2~~
~~$3,975.6~~
~~105.3%~~
~~100.0%~~
~~100.0%~~
~~Covid-19 Test Kits and Instrumentse~~
~~EU-27~~
~~$131.9~~
~~$606.5~~
~~360.0%~~
~~23.2%~~
~~22.2%~~
~~United States~~
~~$130.2~~
~~$377.9~~
~~190.2%~~
~~22.9%~~
~~13.8%~~
~~Hong Kong~~
~~$70.4~~
~~$370.2~~
~~426.0%~~
~~12.4%~~
~~13.5%~~
~~Brazil~~
~~$7.7~~
~~$178.6~~
~~2231.2%~~
~~1.4%~~
~~6.5%~~
~~Indonesia~~
~~$8.9~~
~~$89.6~~
~~902.1%~~
~~1.6%~~
~~3.3%~~
~~Philippines~~
~~$4.4~~
~~$87.4~~
~~1889.4%~~
~~0.8%~~
~~3.2%~~
~~Russia~~
~~$4.9~~
~~$82.7~~
~~1578.8%~~
~~0.9%~~
~~3.0%~~
~~Ecuador~~
~~$2.4~~
~~$60.7~~
~~2441.4%~~
~~0.4%~~
~~2.2%~~
~~United~~
~~$6.6~~
~~$52.0~~
~~688.3%~~
~~1.2%~~
~~1.9%~~
~~Kingdom~~
~~Peru~~
~~$2.6~~
~~$49.3~~
~~1819.4%~~
~~0.5%~~
~~1.8%~~
~~All Others~~
~~$199.0~~
~~$782.6~~
~~293.3%~~
~~35.0%~~
~~28.6%~~
~~World~~
~~$568.9~~
~~$2,737.4~~
~~381.2~~1,025.8 $2,638.9 157.3% 32.0% 34.6% EU-27 $681.1 $1,495.8 119.6% 21.3% 19.6% United Kingdom $116.0 $928.7 700.4% 3.6% 12.2% Congressional Research Service 24 link to page 30 COVID-19: China Medical Supply Chains and Broader Trade Issues USD, Millions % Change Market Share (%) Mar.-Oct. Mar.-Oct. Mar.-Oct. Mar.-Oct. Mar.-Oct. Top Partners 2019 2020 2019 2019 2020 Japan $277.7 $626.7 125.7% 8.7% 8.2% Canada $104.4 $420.9 303.2% 3.3% 5.5% Russia $67.4 $165.1 144.8% 2.1% 2.2% Australia $54.3 $132.5 144.1% 1.7% 1.7% United Arab $37.2 $93.2 150.2% 1.2% 1.2% Emirates Brazil $68.1 $82.7 21.5% 2.1% 1.1% South Korea $62.6 $73.1 16.9% 2.0% 1.0% All Other $706.8 $961.4 36.0% 22.1% 12.6% World $3,201.4 $7,619.0 138.0% 100.0% 100.0% Covid-19 Test Kits and Instrumentse EU-27 $198.3 $876.4 342.0% 22.3% 22.3% United States $201.0 $579.2 188.2% 22.6% 14.8% Hong Kong $112.1 $497.4 343.8% 12.6% 12.7% Brazil $12.9 $193.5 1,394.5% 1.5% 4.9% United Kingdom $12.4 $175.1 1,310.6% 1.4% 4.5% Indonesia $14.9 $130.3 772.6% 1.7% 3.3% Philippines $7.3 $117.4 1,500.5% 0.8% 3.0% Russia $9.5 $99.7 952.1% 1.1% 2.5% Singapore $19.0 $77.7 309.0% 2.1% 2.0% India $44.4 $73.6 65.7% 5.0% 1.9% All Other $255.8 $1,108.0 333.2% 28.8% 28.2% World $887.6 $3,928.2 342.6% %
100.0% 100.0%
100.0% 100.0%
Source: China Customs (downloaded via Trade Data Monitor). Categories based on the 6-digit product codes China Customs (downloaded via Trade Data Monitor). Categories based on the 6-digit product codes
outlined by the World Customs Organization in “HS Classification Reference for Covid-19 Medical Supplies,” ed. outlined by the World Customs Organization in “HS Classification Reference for Covid-19 Medical Supplies,” ed.
2, as updated April 30, 2020. 2, as updated April 30, 2020.
Notes: Changes in the value of trade are determined by both the quantity of trade and the price of the good. Changes in the value of trade are determined by both the quantity of trade and the price of the good.
Many of these products experienced an increase in both price and quantity, during the March-July 2020 period. Many of these products experienced an increase in both price and quantity, during the March-July 2020 period.
~~Congressional Research Service~~
23

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

In defining these product groups, CRS has attempted to capture the most common HS categorizations for these In defining these product groups, CRS has attempted to capture the most common HS categorizations for these
items, however some trade of these items may have been exported under additional HS codes not reflected items, however some trade of these items may have been exported under additional HS codes not reflected
here, and, conversely, the product groups are not exclusive to Covid-19-related gear and may include other here, and, conversely, the product groups are not exclusive to Covid-19-related gear and may include other
similar trade. See footnotes for specific product classifications. similar trade. See footnotes for specific product classifications.
EU-27 includes the 27 member states of the European Union, EU-27 includes the 27 member states of the European Union, excluding the United Kingdom. U.A.E. is the United the United Kingdom. U.A.E. is the United
Arab Emirates. Arab Emirates.
a. HS 630790 is a higher-level classification that includes N95 masks among other types of “Made-Up Textile a. HS 630790 is a higher-level classification that includes N95 masks among other types of “Made-Up Textile
Articles [not classified elsewhere].” Articles [not classified elsewhere].”
b. Other Face and Eye PPE is defined as HS 392690, 481890, 900490, and 902000. b. Other Face and Eye PPE is defined as HS 392690, 481890, 900490, and 902000.
c. Gowns and Other PPE are defined as HS 392620, 401590, 481850, 621010, 621040, 621050, and 650500. c. Gowns and Other PPE are defined as HS 392620, 401590, 481850, 621010, 621040, 621050, and 650500.
d. PPE Gloves are defined as HS 392620, 401511, 401519, 611610, and 621600. d. PPE Gloves are defined as HS 392620, 401511, 401519, 611610, and 621600.
Congressional Research Service 25 COVID-19: China Medical Supply Chains and Broader Trade Issues e. Covid-19 Test Kits and Instructions are defined as HS 300215, 382100, 382200, and 902780. e. Covid-19 Test Kits and Instructions are defined as HS 300215, 382100, 382200, and 902780.
U.S. Shortages
U.S. national and state-level health authorities began reporting shortages of medical supplies— U.S. national and state-level health authorities began reporting shortages of medical supplies—
including PPE such as gowns and face masks—in Februaryincluding PPE such as gowns and face masks—in February 2020. On March 18, . On March 18, 2020, President Trump President Trump
issued Executive Order 13909, issued Executive Order 13909, Prioritizing and Allocating Health and Medical Resources to
Respond to the Spread of COVID–19, which announced the President, which announced the President'’s invocation of the Defense s invocation of the Defense
Production Act of 1950 (DPA) in response to the COVID-19 pandemic.Production Act of 1950 (DPA) in response to the COVID-19 pandemic.5669 The DPA confers broad The DPA confers broad
presidential authorities to mobilize domestic industry in service of the national defense, defined in presidential authorities to mobilize domestic industry in service of the national defense, defined in
statute as various military activities and statute as various military activities and "“homeland security, stockpiling, space, and any directly homeland security, stockpiling, space, and any directly
related activityrelated activity"” (50 U.S.C. §4552), including emergency preparedness activities under the (50 U.S.C. §4552), including emergency preparedness activities under the
Stafford Act, which has been used for public health emergencies.Stafford Act, which has been used for public health emergencies.5770 Among other authorities, Title Among other authorities, Title
I of the DPA allows the President to require persons (including businesses and corporations) to (1) I of the DPA allows the President to require persons (including businesses and corporations) to (1)
prioritize and accept government contracts for materials and services, and (2) allocate or control prioritize and accept government contracts for materials and services, and (2) allocate or control
the general distribution of materials, services, and facilities as necessary to promote the national the general distribution of materials, services, and facilities as necessary to promote the national
defense. The Administration, however, is only publicly providing limited direction to the private defense. The Administration, however, is only publicly providing limited direction to the private
sector under this authority.sector under this authority.58
~~Any potential~~71 The use of the DPA to respond to the COVID-19 pandemic use of the DPA to respond to the COVID-19 pandemic ~~may require~~required some amount some amount
of time to produce adequate supplies, considering the large volumes of products, particularly PPE of time to produce adequate supplies, considering the large volumes of products, particularly PPE
and ventilators, which were in urgent demand. Many U.S. firms are and ventilators, which were in urgent demand. Many U.S. firms are typically hesitant to invest in hesitant to invest in
substantial increases in production, including obtaining the capital equipment and other inputs substantial increases in production, including obtaining the capital equipment and other inputs
required, until they have a guaranteed buyer and price.required, until they have a guaranteed buyer and price.5972 Manufacturing firms, such as General Manufacturing firms, such as General
Motors, Ford Motor Company, and Tesla repurposed factory production for ventilators, butMotors, Ford Motor Company, and Tesla repurposed factory production for ventilators, but, as defense logistics experts projected, these types of efforts took months.73 Additionally, in the United States, PPE and ventilators for use in the health care setting are considered medical devices and require marketing permission from the U.S. Food and Drug Administration (FDA).74 The Trump Administration’s relatively late formal invocation and activation of the DPA, which could have effectively served as an export constraint on U.S.-produced medical supplies, arguably left discretion to U.S. companies to decide whether to fill export or domestic orders first. By 69

56 Executive Order 13909 “Prioritizing and Allocating Health and Medical Resources to Respond to the Spread of Executive Order 13909 “Prioritizing and Allocating Health and Medical Resources to Respond to the Spread of
COVID-19,” 85 COVID-19,” 85 Federal Register 56, March 23, 2020, https://www.govinfo.gov/content/pkg/FR-2020-03-23/pdf/2020- 56, March 23, 2020, https://www.govinfo.gov/content/pkg/FR-2020-03-23/pdf/2020-
06161.pdf; CRS Report R43767, 06161.pdf; CRS Report R43767, The Defense Production Act of 1950: History, Authorities, and Considerations for
Congress, by Michael H. Cecire and Heidi M. Peters; CRS Insight IN11231, , by Michael H. Cecire and Heidi M. Peters; CRS Insight IN11231, The Defense Production Act (DPA) and
COVID-19: Key Authorities and Policy Considerations, by Michael H. Cecire and Heidi M. Peters; CRS Insight , by Michael H. Cecire and Heidi M. Peters; CRS Insight
IN11280, IN11280, COVID-19: Industrial Mobilization and Defense Production Act (DPA) Implementation, by Michael H. , by Michael H.
Cecire and Heidi M. Peters. Cecire and Heidi M. Peters.
5770 CRS Insight IN11231, CRS Insight IN11231, The Defense Production Act (DPA) and COVID-19: Key Authorities and Policy
Considerations, by Michael H. Cecire and Heidi M. Peters , by Michael H. Cecire and Heidi M. Peters
5871 The White House, “Remarks by President Trump, Vice President Pence, and Members of the Coronavirus Task The White House, “Remarks by President Trump, Vice President Pence, and Members of the Coronavirus Task
Force in Press Briefing,” March 22, 2020, https://www.whitehouse.gov/briefings-statements/remarks-president-trump-Force in Press Briefing,” March 22, 2020, https://www.whitehouse.gov/briefings-statements/remarks-president-trump-
vice-president-pence-members-coronavirus-task-force-press-briefing-8/. vice-president-pence-members-coronavirus-task-force-press-briefing-8/.
5972 Lena H. Sun and Rachel Siegel, “As Demand Spikes for Medical Equipment, This Texas Manufacturer is Caught in Lena H. Sun and Rachel Siegel, “As Demand Spikes for Medical Equipment, This Texas Manufacturer is Caught in
the Coronavirus Supply Chain Panic, the Coronavirus Supply Chain Panic, The Washington Post, February 15, 2020, , February 15, 2020,
https://www.washingtonpost.com/https://www.washingtonpost.com/business/2020/02/15/coronavirus-mask-shortage-texas-manufacturing/. 73 Aaron Gregg, Dan Lamothe, and Christian Davenport, “Having Automakers Churn Out Ventilators Won’t be Quick or Easy, Experts Say,” The Washington Post, March 21, 2020. 74 Also see CRS In Focus IF11488, Personal Protective Equipment (PPE) and COVID-19: FDA Regulation and Related Activities, by Agata Bodie and Victoria R. Green. Congressional Research Service 26 link to page 32 COVID-19: China Medical Supply Chains and Broader Trade Issues contrast, ~~business/2020/02/15/coronavirus-mask-shortage-texas-manufacturing/.~~
~~Congressional Research Service~~
24

~~link to page 30~~ ~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~defense logistics experts expected this effort to take months.60 Additionally, in the United States,~~
~~PPE and ventilators for use in the health care setting are considered medical devices and require~~
~~marketing permission from the U.S. Food and Drug Administration (FDA).~~
~~The Trump Administration’s relatively late formal invocation and activation of the DPA, which~~
~~could effectively serve as an export constraint on U.S.-produced medical supplies, arguably left~~
~~discretion to U.S. companies to decide whether to fill export or domestic orders first. By contrast,~~
governments in Taiwan, Thailand, France, and Germany boosted production but restricted governments in Taiwan, Thailand, France, and Germany boosted production but restricted
exports, further curtailing U.S. supply options. In January and February 2020, organizers of U.S. exports, further curtailing U.S. supply options. In January and February 2020, organizers of U.S.
private sector relief efforts reportedly purchased large amounts of U.S. PPE products for airlift to private sector relief efforts reportedly purchased large amounts of U.S. PPE products for airlift to
China, further depleting U.S. supplies.China, further depleting U.S. supplies.6175
Some Members of Congress have called for broader tariff relief or at least new exclusions for Some Members of Congress have called for broader tariff relief or at least new exclusions for
existing tariffs and a moratorium on any new tariffs. Other Members and U.S. domestic producers existing tariffs and a moratorium on any new tariffs. Other Members and U.S. domestic producers
argue that such liberalization could open the U.S. market to a flood of imports during an argue that such liberalization could open the U.S. market to a flood of imports during an
economic downturn.economic downturn.6276 The Office of the United States Trade Representative (USTR) announced The Office of the United States Trade Representative (USTR) announced
on March 6, 2020, that it would lift tariffs imposed under Section 301 authorities on 19 specific on March 6, 2020, that it would lift tariffs imposed under Section 301 authorities on 19 specific
products and 8 10-digit subheadings of medical supply and equipment items from China (See products and 8 10-digit subheadings of medical supply and equipment items from China (See
Table 5)..6377
The USTR announced on March 20, 2020, that, prior to the COVID-19 outbreak, the agency had The USTR announced on March 20, 2020, that, prior to the COVID-19 outbreak, the agency had
been working with the U.S. Department of Health and Human Services “to ensure that critical been working with the U.S. Department of Health and Human Services “to ensure that critical
medicines and other essential medical products were not subject to additional Section 301 tariffs.” medicines and other essential medical products were not subject to additional Section 301 tariffs.”
Consequently, the United States had not imposed tariffs on certain critical products, such as Consequently, the United States had not imposed tariffs on certain critical products, such as
ventilators, oxygen masks, and nebulizers. The USTR indicated thatventilators, oxygen masks, and nebulizers. The USTR indicated that~~, in recent months, it has~~
it had prioritized the review of requests for exclusions on medical care products, resulting in exclusions prioritized the review of requests for exclusions on medical care products, resulting in exclusions
granted on basic medical supplies, including gloves, soaps, facemasks, surgical drapes, and granted on basic medical supplies, including gloves, soaps, facemasks, surgical drapes, and
hospital gowns. hospital gowns.
Since March 2020, the USTR has exempted certain medical products from Section 301 tariffs in Since March 2020, the USTR has exempted certain medical products from Section 301 tariffs in
several rounds of exclusions. CRS could not determine exactly how many of them have been several rounds of exclusions. CRS could not determine exactly how many of them have been
exempted on the basis of COVID-19 concerns, as the USTR does not specify the rationale for exempted on the basis of COVID-19 concerns, as the USTR does not specify the rationale for

~~60 Aaron Gregg, Dan Lamothe, and Christian Davenport, “Having Automakers Churn Out Ventilators Won’t be Quick~~
~~or Easy, Experts Say,” The Washington Post, March 21, 2020.~~
61granting exclusions in its announcements. While CRS can identify some products, there are others with known or potential medical uses—or inputs for the manufacture thereof—that have received exclusions but whose ultimate purpose cannot always be ascertained from HTSUS subheadings or the provided product descriptions (e.g., organic chemicals or textiles for the manufacture of pharmaceuticals or PPE). In addition, at the end of March 2020, the USTR published a Federal Register notice seeking comments to determine if further modifications to the Section 301 tariffs on U.S. imports from China are necessary to respond to the COVID-19 pandemic in the United States. The notice provided no further guidance on the types of products that the USTR considers to be “medical- 75 U.S. Embassy & Consulates in China, “The United States Announces Assistance to the COVID-19,” U.S. Embassy & Consulates in China, “The United States Announces Assistance to the COVID-19,” U.S.
Department of State, press release, February 7, 2020, https://china.usembassy-china.org.cn/the-united-states-, press release, February 7, 2020, https://china.usembassy-china.org.cn/the-united-states-
announces-assistance-to-the-novel-coronavirus/; UPS Foundation, “UPS to Airlift More Than 2 Million Masks and announces-assistance-to-the-novel-coronavirus/; UPS Foundation, “UPS to Airlift More Than 2 Million Masks and
Protective Gear To China,” Protective Gear To China,” UPS Pressroom, press release, January 31, 2020, , press release, January 31, 2020,
https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=PressReleases&id=1580479415168-https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=PressReleases&id=1580479415168-
269&WT.mc_id=UPSCOM_NEWSANDINFO_CORONA_PRESSRELEASE_013120; Direct Relief, “Direct Relief 269&WT.mc_id=UPSCOM_NEWSANDINFO_CORONA_PRESSRELEASE_013120; Direct Relief, “Direct Relief
Rushes Facial Masks to China to Fight Coronavirus Spread,” press release, January 28, 2020, Rushes Facial Masks to China to Fight Coronavirus Spread,” press release, January 28, 2020,
https://www.directrelief.org/2020/01/direct-relief-rushes-facial-masks-to-china-to-fight-coronavirus-spread/; Tad https://www.directrelief.org/2020/01/direct-relief-rushes-facial-masks-to-china-to-fight-coronavirus-spread/; Tad
Walch, “Inside the church’s donation of masks, coveralls and goggles to China over the coronavirus outbreak,” Walch, “Inside the church’s donation of masks, coveralls and goggles to China over the coronavirus outbreak,” Deseret
News, January 29, 2020, https://www.deseret.com/faith/2020/1/29/21113386/coronavirus-china-outbreak-lds-church-, January 29, 2020, https://www.deseret.com/faith/2020/1/29/21113386/coronavirus-china-outbreak-lds-church-
mormon-russell-nelson-donation-chinese-health-wuhan. mormon-russell-nelson-donation-chinese-health-wuhan.
6276 William Mauldin, “U.S. to Allow Some Delays in Tariff Payments,” William Mauldin, “U.S. to Allow Some Delays in Tariff Payments,” The Washington Post, March 26, 2020. , March 26, 2020.
6377 “Notice of Product Exclusions: China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual “Notice of Product Exclusions: China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual
Property, and Innovation,” USTR Notice, U.S. Federal Register, March 10, 2020, Property, and Innovation,” USTR Notice, U.S. Federal Register, March 10, 2020,
https://www.federalregister.gov/documents/2020/03/10/2020-05000/notice-of-product-exclusions-chinas-acts-policies-https://www.federalregister.gov/documents/2020/03/10/2020-05000/notice-of-product-exclusions-chinas-acts-policies-
and-practices-related-to-technology-transfer. Also see https://www.govinfo.gov/content/pkg/FR-2020-03-10/pdf/2020-and-practices-related-to-technology-transfer. Also see https://www.govinfo.gov/content/pkg/FR-2020-03-10/pdf/2020-
05000.pdf and 05000.pdf and
https://ustr.gov/sites/default/files/enforcement/301Investigations/%24300_Billion_Exclusions_Granted_March_2020.phttps://ustr.gov/sites/default/files/enforcement/301Investigations/%24300_Billion_Exclusions_Granted_March_2020.p
df. df.
Congressional Research Service Congressional Research Service
2527 COVID-19: China Medical Supply Chains and Broader Trade Issues care products.” The review of comments was to run parallel to, and was

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~granting exclusions in its announcements. While CRS can identify some products, there are~~
~~others with known or potential medical uses—or inputs for the manufacture thereof—that have~~
~~received exclusions but whose ultimate purpose cannot always be ascertained from HTSUS~~
~~subheadings or the provided product descriptions (e.g., organic chemicals or textiles for the~~
~~manufacture of pharmaceuticals or PPE).~~
~~In addition, at the end of March 2020, the USTR published a Federal Register notice seeking~~
~~comments to determine if further modifications to the Section 301 tariffs on U.S. imports from~~
~~China are necessary to respond to the COVID-19 pandemic in the United States. The notice~~
~~provided no further guidance on the types of products that the USTR considers to be “medical-~~
~~care products.” The review of comments is to run parallel to, and is~~ not to affect, any ongoing not to affect, any ongoing
product exclusion requests still under review. The USTR has not indicated what form the product exclusion requests still under review. The USTR has not indicated what form the
response would take or when it will respond to comments—only that it will review them on a response would take or when it will respond to comments—only that it will review them on a
rolling basis. These comments may already be informing product exclusion decisions, or may rolling basis. These comments may already be informing product exclusion decisions, or may
lead to the establishment of a new formal exclusion process, akin to that used for Lists 3 and 4, lead to the establishment of a new formal exclusion process, akin to that used for Lists 3 and 4,
but strictly for medical products. but strictly for medical products.
The Administration appears reluctant to liberalize non-health The Administration appears reluctant to liberalize non-health -related tariffs, preferring to delay related tariffs, preferring to delay
tariff payments instead.tariff payments instead.6478 In late March 2020, the U.S. Customs and Border Protection sent In late March 2020, the U.S. Customs and Border Protection sent
notices to companies saying that officials will approve some delays in tariff payments to offer notices to companies saying that officials will approve some delays in tariff payments to offer
economic relief due to the severity of COVID-19; they may also be weighing a broader economic relief due to the severity of COVID-19; they may also be weighing a broader
suspension of collecting duties.suspension of collecting duties.6579 Separate from COVID-19, with regard to existing tariff Separate from COVID-19, with regard to existing tariff
exemptions, on March 20, USTR invited industry to submit public comments beginning on April exemptions, on March 20, USTR invited industry to submit public comments beginning on April
20, regarding whether USTR should extend certain tariff exclusions on other products already 20, regarding whether USTR should extend certain tariff exclusions on other products already
granted in June 2019 that expire in June 2020.granted in June 2019 that expire in June 2020.~~66 A~~ 80 USTR undertook selective liberalization but broader liberalization of U.S. tariffs on Chinese broader liberalization of U.S. tariffs on Chinese
goods during the COVID-19 outbreak, could goods during the COVID-19 outbreak, could ~~further~~ expose the U.S. economy to Chinese excess expose the U.S. economy to Chinese excess
industrial capacity at a point of economic downturn in the United States. Chinese firms also could industrial capacity at a point of economic downturn in the United States. Chinese firms also could
capture market share and gain a unique foothold in the U.S. market through market softening and capture market share and gain a unique foothold in the U.S. market through market softening and
if the United States were to relax FDA and other product certifications. if the United States were to relax FDA and other product certifications.
Table 5. ~~Recent~~Select Section 301 Tariff Exclusions on Select U.S. Imports from China
Value (U.S. Dollars) and Share of U.S. Imports (%) in 2019 Value (U.S. Dollars) and Share of U.S. Imports (%) in 2019
China’s
Value of
Value of U.S.
Share of
Total U.S.
Imports
Total U.S.
HTS
Imports
from China
Imports
Number
Description
(US$)
(US$)
(%)
3401.19.0000 3401.19.0000
Soap and Organic Surface-Active Products Soap and Organic Surface-Active Products
164,333,744 164,333,744
106,484,402 106,484,402
64.8 64.8
3926.90.9910* 3926.90.9910*
Laboratory Ware Laboratory Ware
485,245,133 485,245,133
86,823,074 86,823,074
17.9 17.9
4015.19.0510 4015.19.0510
Nitrile and Sterile Gloves Nitrile and Sterile Gloves
147,518,639 147,518,639
12,889,989 12,889,989
8.7 8.7
4015.19.0550 Nitrile and Sterile Gloves 1,363,144,838 200,159,326 14.7 4818.90.0000 Disposable (Paper) Household, Sanitary, or 476,012,068 356,642,980 74.9 Hospital Bed Articles 6210.10.5000 Personal Protective Equipment 795,151,929 426,658,153 53.7 6307.90.6090 Medical Protective Clothing 11,786,110 5,502,995 46.7 6307.90.6800 Medical Protective Clothing 445,250,763 159,699,946 35.9 6307.90.9889* Personal Protective Equipment 3,209,428,978 2,307,838,576 71.9 78
64 Robert E. Lighthizer, “Lighthizer Responds: Medical Trade Tariffs,” Letter to the Editor, Robert E. Lighthizer, “Lighthizer Responds: Medical Trade Tariffs,” Letter to the Editor, The Wall Street Journal, ,
March 21-22, 2020. March 21-22, 2020.
6579 Alex Leary and William Mauldin, “Import Tariffs Will be Halted, Officials Say,” Alex Leary and William Mauldin, “Import Tariffs Will be Halted, Officials Say,” The Wall Street Journal, March , March
28-29, 2020. 28-29, 2020.
6680 “Request for Comments Concerning the Extension of Particular Extensions Granted Under the June 2019 Product “Request for Comments Concerning the Extension of Particular Extensions Granted Under the June 2019 Product
Exclusion Notice From the $34 Billion Action Pursuant to Section 301: China’s Acts, Policies and Practices Related to Exclusion Notice From the $34 Billion Action Pursuant to Section 301: China’s Acts, Policies and Practices Related to
Technology Transfer, Intellectual Property and Innovation,” USTR Notice, U.S. Federal Register, March 20, 2020, Technology Transfer, Intellectual Property and Innovation,” USTR Notice, U.S. Federal Register, March 20, 2020,
https://www.federalregister.gov/documents/2020/03/20/2020-05890/request-for-comments-concerning-the-extension-https://www.federalregister.gov/documents/2020/03/20/2020-05890/request-for-comments-concerning-the-extension-
of-particular-exclusions-granted-under-the-june-2019. of-particular-exclusions-granted-under-the-june-2019.
Congressional Research Service Congressional Research Service
2628

COVID-19: China Medical Supply Chains and Broader Trade Issues

China’s
Value of
Value of U.S.
Share of
Total U.S.
Imports
Total U.S.
HTS
Imports
from China
Imports
Number
Description
(US$)
(US$)
(%)
~~4015.19.0550~~
~~Nitrile and Sterile Gloves~~
~~1,363,144,838~~
~~200,159,326~~
~~14.7~~
~~4818.90.0000~~
~~Disposable (Paper) Household, Sanitary, or~~
~~476,012,068~~
~~356,642,980~~
~~74.9~~
~~Hospital Bed Articles~~
~~6210.10.5000~~
~~Personal Protective Equipment~~
~~795,151,929~~
~~426,658,153~~
~~53.7~~
~~6307.90.6090~~
~~Medical Protective Clothing~~
~~11,786,110~~
~~5,502,995~~
~~46.7~~
~~6307.90.6800~~
~~Medical Protective Clothing~~
~~445,250,763~~
~~159,699,946~~
~~35.9~~
6307.90.9889*
~~Personal Protective Equipment~~
~~3,209,428,978~~
~~2,307,838,576~~
~~71.9~~
9004.90.0000* 9004.90.0000*
Protective Goggles Protective Goggles
919,198,348 919,198,348
503,787,243 503,787,243
54.8 54.8
Source: CRS using information from the Office of the U.S. Trade Representative (85 FR 13970 and 85 FR CRS using information from the Office of the U.S. Trade Representative (85 FR 13970 and 85 FR
15244) and data from the U.S. International Trade Commission’s DataWeb. 15244) and data from the U.S. International Trade Commission’s DataWeb.
Notes: *Only a portion of the HTS ten-digit subheading is covered by the tariff exclusion. For more detail, see *Only a portion of the HTS ten-digit subheading is covered by the tariff exclusion. For more detail, see
85 FR 15244. N95 and other protective masks have historically been classified under tariff subheading 85 FR 15244. N95 and other protective masks have historically been classified under tariff subheading
6307.99.9889, which includes other miscellaneous textile article made from similar materials. 6307.99.9889, which includes other miscellaneous textile article made from similar materials.
In an effort to quickly bring overseas medical supplies into the United States, the Federal In an effort to quickly bring overseas medical supplies into the United States, the Federal
Emergency Management Agency (FEMA) announced on March 29, 2020 that it was arranging Emergency Management Agency (FEMA) announced on March 29, 2020 that it was arranging
an airlift for 22 flights, most from Asia, over the subsequent two weeks. The airlift was for medical airlift for 22 flights, most from Asia, over the subsequent two weeks. The airlift was for medical
supplies that medical distributors already planned to import into the United States, but it supplies that medical distributors already planned to import into the United States, but it
accelerated their delivery arrival time by shipping by air instead of ocean freight.accelerated their delivery arrival time by shipping by air instead of ocean freight.6781 As of May As of May
2020, FEMA said it had coordinated the delivery of more than 97 million respirators, 133.7 2020, FEMA said it had coordinated the delivery of more than 97 million respirators, 133.7
million surgical masks, and 10,600 ventilators, among other critical medical supplies.million surgical masks, and 10,600 ventilators, among other critical medical supplies.68
~~Separate from medical supplies specific to COVID-19, a longer-term disruption of China’s~~
~~pharmaceutical and medical exports could increase the cost of everyday drugs and routine~~
~~medical procedures in the United States. This could happen as it becomes harder to import APIs~~
82 The trade disruptions due to the COVID-19 pandemic highlighted U.S. and broader global dependence on bulk API from China. In addition to medical supplies specific to COVID-19, the disruption of China’s pharmaceutical and medical exports showed the potential impact of China API trade on availability and pricing for common drugs and components for medical devices. According to FDA officials, in 2018, for common drugs and components for medical devices. According to FDA officials, in 2018,
China ranked second among countries that export drugs and biologics to the United States by China ranked second among countries that export drugs and biologics to the United States by
import line (accounting for 13.4% of U.S. imports of those products).import line (accounting for 13.4% of U.S. imports of those products).6983 However, FDA states it is However, FDA states it is
not able to determine the volume of APIs that China is manufacturing, given the complexity of not able to determine the volume of APIs that China is manufacturing, given the complexity of
the supply chain and gaps in what pharmaceutical companies are required to disclose about their the supply chain and gaps in what pharmaceutical companies are required to disclose about their
inputs.inputs.7084 China is also a leading supplier of APIs in global supply chains for painkillers, diabetes China is also a leading supplier of APIs in global supply chains for painkillers, diabetes medicines, and antibiotics, meaning a slowdown in API exports from China could increase cost pressures faced by U.S. drug manufacturers.85 For

6781 Jonathan Swan and Joann Muller, “Inside the Start of the Great Virus Airlift,” Jonathan Swan and Joann Muller, “Inside the Start of the Great Virus Airlift,” Axios, March 29, 2020, , March 29, 2020,
https://www.axios.com/coronavirus-airlift-masks-medical-supplies-1d1913bf-744e-41cf-895c-https://www.axios.com/coronavirus-airlift-masks-medical-supplies-1d1913bf-744e-41cf-895c-
d8934afa2c36.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiossneakpeek&stread8934afa2c36.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiossneakpeek&strea
m=top. m=top.
6882 Federal Emergency Management Agency, “FEMA Releases State-by-State PPE Data,” press release, May 14, 2020. Federal Emergency Management Agency, “FEMA Releases State-by-State PPE Data,” press release, May 14, 2020.
6983 Testimony of FDA Associate Commissioner for Global Policy and Strategy Mark Abdoo, in U.S. China Security and Testimony of FDA Associate Commissioner for Global Policy and Strategy Mark Abdoo, in U.S. China Security and
Economic Review Commission, Economic Review Commission, Exploring the Growing Reliance on China’s Biotech and Pharmaceutical Products, ,
July 31, 2019, https://www.fda.gov/news-events/congressional-testimony/exploring-growing-us-reliance-chinas-July 31, 2019, https://www.fda.gov/news-events/congressional-testimony/exploring-growing-us-reliance-chinas-
biotech-and-pharmaceutical-products-07312019. Information provided by FDA’s Office of Legislation through biotech-and-pharmaceutical-products-07312019. Information provided by FDA’s Office of Legislation through
personal communication with CRS. FDA’s usage of the term “import line” refers to a distinct regulated product within personal communication with CRS. FDA’s usage of the term “import line” refers to a distinct regulated product within
a shipment through customs. a shipment through customs.
7084 FDA, Testimony of Dr. Janet Woodcock, Director the Center for Drug Evaluation and Research, “Securing the U.S. FDA, Testimony of Dr. Janet Woodcock, Director the Center for Drug Evaluation and Research, “Securing the U.S.
~~Congressional Research Service~~
27

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~medicines, and antibiotics, meaning a slowdown in API exports from China could increase cost~~
~~pressures faced by U.S. drug manufacturers.71 For~~ Drug Supply Chain: Oversight of FDA’s Foreign Inspection Program,” December 10, 2019. Also see CRS Report R46507, FDA’s Role in the Medical Product Supply Chain and Considerations During COVID-19, by Victoria R. Green, Agata Bodie, and Kate M. Costin. 85 Stephanie Findlay, Hannah Kuchler, and Sarah Neville, “Drugmakers braced for coronavirus disruption to China supplies,” Financial Times, February 12, 2020, https://www.ft.com/content/8630c51c-4cc0-11ea-95a0-43d18ec715f5; Reuters, “China Virus Outbreak Threatens Global Drug Supplies: European business group,” February 17, 2020, https://www.reuters.com/article/us-china-health-pharma-antibiotics/china-virus-threatens-global-antibiotics-supply-european-business-group-idUSKBN20C08S. Congressional Research Service 29 link to page 35 COVID-19: China Medical Supply Chains and Broader Trade Issues example, China accounts for 52% of U.S. example, China accounts for 52% of U.S.
imports of penicillin, 90% of tetracycline, and 93% of chloramphenicol.imports of penicillin, 90% of tetracycline, and 93% of chloramphenicol.7286 On February 27 On February 27, 2020, FDA , FDA
Commissioner Stephen Hahn announced that a manufacturer of an unspecified human drug Commissioner Stephen Hahn announced that a manufacturer of an unspecified human drug
informed FDA of a shortage the drug’s supply related to a Chinese API manufacturer affected by informed FDA of a shortage the drug’s supply related to a Chinese API manufacturer affected by
COVID-19.COVID-19.7387 Because information disclosed to FDA regarding drug shortages is considered Because information disclosed to FDA regarding drug shortages is considered
proprietary, FDA did not disclose the name of the drug in question, but did note that alternatives proprietary, FDA did not disclose the name of the drug in question, but did note that alternatives
exist for patient use.exist for patient use.7488 According to congressional testimony delivered in October 2019 by Janet According to congressional testimony delivered in October 2019 by Janet
Woodcock, director of the FDA’s Center for Drug Evaluation and Research, the FDA is unable to Woodcock, director of the FDA’s Center for Drug Evaluation and Research, the FDA is unable to
estimate the total volume of all API produced in China. Woodcock also stated in her testimony estimate the total volume of all API produced in China. Woodcock also stated in her testimony
that the FDA was able to identify three drugs on the WHO’s Essential Medicines list whose API that the FDA was able to identify three drugs on the WHO’s Essential Medicines list whose API
manufacturers are based only in China: capreomycin and streptomycin, commonly used to treat manufacturers are based only in China: capreomycin and streptomycin, commonly used to treat
tuberculosis, and sulfadiazine, used to treat chancroid and trachoma.tuberculosis, and sulfadiazine, used to treat chancroid and trachoma.75
~~China’s role as the primary supplier of APIs to global manufacturers of generic pharmaceuticals,~~
~~particularly in India, is likely to increase overall costs of generic pharmaceuticals for consumers~~
~~in the United States in the short-to-medium term. The outbreak of COVID-19 in India could also~~
~~affect the availability of generic pharmaceuticals in the United States. India, which supplies~~
~~approximately 40% of generic pharmaceuticals used in the United States, imports nearly 70% of~~
~~its APIs from China.76 In March 2020, India imposed export restrictions on several drugs whose~~
~~supply chains rely on China, leading to fears of potential global shortages of generic drugs that~~
~~have since escalated after India announced a nationwide 21-day lockdown.77 Additionally, further~~
~~tensions in China-India bilateral trade resulting from the ongoing border conflict between the two~~
~~countries could pose further risk to generic pharmaceutical supply chains.~~
~~Global Trade Restrictions~~
~~Amid concerns about the availability of personal protective equipment (PPE), medical supplies,~~
~~and pharmaceuticals, a growing number of nations applied temporary export controls and other~~
~~restrictions on the overseas sales of these products. While export controls do not necessarily~~

~~Drug Supply Chain: Oversight of FDA’s Foreign Inspection Program,” December 10, 2019.~~
~~71 Stephanie Findlay, Hannah Kuchler, and Sarah Neville, “Drugmakers braced for coronavirus disruption to China~~
~~supplies,” Financial Times, February 12, 2020, https://www.ft.com/content/8630c51c-4cc0-11ea-95a0-43d18ec715f5;~~
~~Reuters, “China Virus Outbreak Threatens Global Drug Supplies: European business group,” February 17, 2020,~~
~~https://www.reuters.com/article/us-china-health-pharma-antibiotics/china-virus-threatens-global-antibiotics-supply-~~
~~european-business-group-idUSKBN20C08S.~~
~~72 CRS calculations using data from the U.S. International Trade Commission’s DataWeb (HTSUS 2941.30 and~~
~~2941.10).~~
7389 China exported 10 million tons of bulk API in 2019, a 9% increase over 2018, according to the China Chamber of Commerce for the Import and Export of Medicine and Health Products. Almost 90% of China’s API exports by volume went to Asia, Europe, and North America, including the United States (7%), Europe (20%), India (8%), Southeast Asia (41%), and Japan (5%). Almost 75% of China’s API exports by value went to these same markets, including the United States (12%), Europe (28%), India (17%), Southeast Asia (10%), and Japan (6%). The difference between China’s API exports by volume and value is particularly noticeable in the case of Southeast Asia where the volume of API exports are high, but the value is low (Figure 6). Chinese API exports remain relatively disaggregated with the top ten Chinese exporters accounting for an estimated 9% of exports in 2019, and the following 43 top exporters accounting for 22% of exports. Chinese industry trade data may not be aggregating data by affiliated firms, which could show higher levels of corporate concentration. Large Chinese API exporters include Sinopharm Group Co., Ltd, Puluo Pharmaceutical, Livzon Pharmaceutical Group, Inc., Zhejiang Huahai Pharmaceutical Co., Ltd., Zhejiang Chemicals Import and Export Corporation, and Zhejiang Jiuzhou Pharmaceutical Co., Ltd.90 Another Chinese state-tied API exporter, Harbin Pharmaceutical Group, Co., in August 2020 successfully bid for the U.S. supplements company GNC Holdings Inc.’s assets in bankruptcy proceedings, providing Harbin Pharmaceutical an extensive distribution and retail presence in the United States.91 GNC said that Harbin 86 CRS calculations using data from the U.S. International Trade Commission’s DataWeb (HTSUS 2941.30 and 2941.10). 87 U.S. Food and Drug Administration, “Coronavirus (COVID-19) Supply Chain Update,” Press release, February 27, U.S. Food and Drug Administration, “Coronavirus (COVID-19) Supply Chain Update,” Press release, February 27,
2020, https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-supply-chain-update. 2020, https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-supply-chain-update.
7488 Food and Drug Administration, “Frequently Asked Questions about Drug Shortages,” last updated July 05, 2018, Food and Drug Administration, “Frequently Asked Questions about Drug Shortages,” last updated July 05, 2018,
https://www.fda.gov/drugs/drug-shortages/frequently-asked-questions-about-drug-shortages#q7; and CDER Office of https://www.fda.gov/drugs/drug-shortages/frequently-asked-questions-about-drug-shortages#q7; and CDER Office of
Compliance Office of Drug Security, Integrity & Recalls, “FDA Compliance Focal Point for Imports & Exports of Compliance Office of Drug Security, Integrity & Recalls, “FDA Compliance Focal Point for Imports & Exports of
CDER Regulated Drugs, https://www.fda.gov/media/91681/download. CDER Regulated Drugs, https://www.fda.gov/media/91681/download.
7589 FDA, Testimony of Dr. Janet Woodcock, Director the Center for Drug Evaluation and Research, “Securing the U.S. FDA, Testimony of Dr. Janet Woodcock, Director the Center for Drug Evaluation and Research, “Securing the U.S.
Drug Supply Chain: Oversight of FDA’s Foreign Inspection Program,” December 10, 2019. Drug Supply Chain: Oversight of FDA’s Foreign Inspection Program,” December 10, 2019.
7690 “China's Export of API Products in 2019,” China Chamber of Commerce for Import and Export of Medicines and Health Products, March 22, 2020, http://www.cccmhpie.org.cn/Pub/9265/176049.shtml; and Daxue Consulting, “The API Industry in China: Producing and Exporting to the Global Market,” July 1, 2020, https://daxueconsulting.com/api-industry-in-china/. 91 Katherine Doherty, “GNC Cancels Auction, Pushes Forward with Sale to Chinese Sponsor,” Bloomberg, September 14, 2020, https://www.bloomberg.com/news/articles/2020-09-14/gnc-cancels-auction-pushes-forward-with-sale-to-chinese-sponsor. Congressional Research Service 30 link to page 36 COVID-19: China Medical Supply Chains and Broader Trade Issues Pharmaceutical’s earlier strategic stake was approved by CFIUS in 2018 but some members of Congress still pressed for CFIUS to review the new transaction because of their concerns.92 Figure 6. China’s API Exports by Volume and Value (2019) Source: CRS with data from the China Chamber of Commerce for the Import and Export of Medicines and Health Products. CRS has assessed China’s API-related exports in HTS Chapters 29 and 30 at the 6-digit tariff, level as reported by China Customs, to better assess specific trends in China’s API exports and to verify the trade data that has been reported by China’s industry association. The CRS assessment comes quite close to Chinese industry reports by trade value. The export market breakdowns using the CRS analysis by value are included below (Figure 7). 92 Katy Stek Ferek, “Rubio Seeks Security Review of Chinese Bid for GNC,” The Wall Street Journal, September 10, 2020, https://www.wsj.com/articles/rubio-seeks-security-review-of-chinese-bid-for-gnc-11599775144. Congressional Research Service 31 COVID-19: China Medical Supply Chains and Broader Trade Issues Figure 7. China’s API Export Destinations Based on Value (2019) Source: CRS with data from China Customs. Notes: (1) Europe includes the 27 members of the European Union, Albania, Andorra, Belarus, Bosnia and Herzegovina, Iceland, Moldova, Monaco, Montenegro, North Macedonia, Norway, Russia, Serbia, Switzerland, Ukraine, and the United Kingdom. (2) Southeast Asia includes Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. China’s role as the primary supplier of APIs to global manufacturers of generic pharmaceuticals, particularly in India, highlights that the U.S. market may be dependent on China API through third markets. Shortages of China’s exports of API to India, for example, would likely increase overall costs of generic pharmaceuticals for consumers in the United States. India, which supplies approximately 40% of generic pharmaceuticals used in the United States, imports nearly 70% of its APIs from China.93 In March 2020, India imposed export restrictions on several drugs whose supply chains rely on China, leading to fears of potential global shortages of generic drugs that have since escalated after India announced a nationwide 21-day lockdown.94 Additionally, further tensions in China-India bilateral trade resulting from any intensification in the ongoing border tensions between the two countries could pose further risk to generic pharmaceutical supply chains. Global Trade Restrictions Amid concerns about the availability of personal protective equipment (PPE), medical supplies, and pharmaceuticals, a growing number of nations applied temporary export controls and other restrictions on the overseas sales of these products. While export controls do not necessarily prohibit export activity, they make export licenses a requirement, which could lead to transactions 93 Yanzhong Huang, “The Coronavirus Outbreak Could Disrupt the U.S. Drug Supply,” Yanzhong Huang, “The Coronavirus Outbreak Could Disrupt the U.S. Drug Supply,” Council on Foreign Relations, ,
March 5, 2020, https://www.cfr.org/in-brief/coronavirus-disrupt-us-drug-supply-shortages-fda; Julianna Tatelbaum, March 5, 2020, https://www.cfr.org/in-brief/coronavirus-disrupt-us-drug-supply-shortages-fda; Julianna Tatelbaum,
“Fears of US drug shortages grow as India locks down to curb the coronavirus,” “Fears of US drug shortages grow as India locks down to curb the coronavirus,” CNBC, March 24, 2020. , March 24, 2020.
7794 Reuters, “Global supplier India curbs drug exports as coronavirus fears grow,” March 3, 2020. Reuters, “Global supplier India curbs drug exports as coronavirus fears grow,” March 3, 2020.
Congressional Research Service Congressional Research Service
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COVID-19: China Medical Supply Chains and Broader Trade Issues

~~prohibit export activity, they make export licenses a requirement, which could lead to transactions~~
being delayed and potentially denied or cancelled. As medical professionals around the world being delayed and potentially denied or cancelled. As medical professionals around the world
scrambled to find gloves, face shields, protective garments, disinfectants, ventilators, and other scrambled to find gloves, face shields, protective garments, disinfectants, ventilators, and other
equipment needed to fight COVID-19, these measures equipment needed to fight COVID-19, these measures ~~are highlighting~~highlighted the risks—and the risks—and
~~exacerbating~~exacerbated the challenges—of relying on complex global supply chains and distribution the challenges—of relying on complex global supply chains and distribution
channels that are not sufficiently diversified.channels that are not sufficiently diversified.7895 World Trade Organization (WTO) rules prohibit World Trade Organization (WTO) rules prohibit
export bans except for rare instances in which a member invokes a measure citing national export bans except for rare instances in which a member invokes a measure citing national
security concerns. In an effort to promote transparency, the WTO security concerns. In an effort to promote transparency, the WTO ~~is publishing~~published a list of temporary a list of temporary
export bans that countries export bans that countries ~~are enacting during~~enact during the COVID-19 COVID-19 pandemic and notify~~and notifying~~ to the WTO. to the WTO.7996 On March On March
30, 2020, the G-20 issued a joint statement that emphasized the importance of keeping markets 30, 2020, the G-20 issued a joint statement that emphasized the importance of keeping markets
open and ensuring the adequate production and fair and equitable distribution of medical products open and ensuring the adequate production and fair and equitable distribution of medical products
to where they are most needed. The statement emphasized that any measures a country might to where they are most needed. The statement emphasized that any measures a country might
adopt to protect health should be targeted, proportionate, transparent, and temporary.adopt to protect health should be targeted, proportionate, transparent, and temporary.8097
So far this year, China and more than 24 other economies, including India and So far this year, China and more than 24 other economies, including India and~~, more recently,~~ the the
European Union,European Union,~~81 have~~98 imposed either limits or formal or imposed either limits or formal or de facto bans on certain exports. bans on certain exports.82
~~Many of the existing and proposed measures could restrict~~99 Many of the measures temporarily restricted access to markets on which the United access to markets on which the United
States depends for certain imports. These States depends for certain imports. These ~~include~~included medical ventilators (for which Singapore and medical ventilators (for which Singapore and
China accounted for 35% and 17%, respectively, of U.S. imports in 2019), breathing and gas China accounted for 35% and 17%, respectively, of U.S. imports in 2019), breathing and gas
masks (France, the United Kingdom, and Italy, 47% combined), CT scanners (Germany, 50%), masks (France, the United Kingdom, and Italy, 47% combined), CT scanners (Germany, 50%),
medical protective equipment of textile materials (China, 72%), digital and infrared thermometers medical protective equipment of textile materials (China, 72%), digital and infrared thermometers
(China, 36%), pharmaceuticals (Ireland, Germany, Switzerland, and Italy, 53% combined), and (China, 36%), pharmaceuticals (Ireland, Germany, Switzerland, and Italy, 53% combined), and
tetracycline and penicillin (China, 90% and 52%, respectively).tetracycline and penicillin (China, 90% and 52%, respectively).83100 Many governments rescinded Many governments rescinded
these temporary measures after the height of the COVID19 outbreak in their countries. China did these temporary measures after the height of the COVID19 outbreak in their countries. China did
not provide notice of its de facto export constraints that redirected supply for domestic use to the not provide notice of its de facto export constraints that redirected supply for domestic use to the
World Trade Organization (WTO), as other countries did.World Trade Organization (WTO), as other countries did.84101
China Customs Delays Release of January-February 2020 Trade Data
~~The Chinese government released top-level import and export figures to the media in early March 2020, but~~
~~China Customs did not release its detailed January-February 2020 monthly trade data, as scheduled on March 19,~~
~~2020 until 11 days later on March 30, 2020. This data is important in providing additional details on trade patterns~~

7895 Bryce Baschuk, “Export Bans on Medical Supplies to Hamper Global Virus Response,” Bryce Baschuk, “Export Bans on Medical Supplies to Hamper Global Virus Response,” Bloomberg, March 18, 2020. , March 18, 2020.
Some public health officials and trade experts have also expressed concern that export controls and other restrictions Some public health officials and trade experts have also expressed concern that export controls and other restrictions
could reduce incentives for companies to ramp up production. See, for example, James Politi, Aime Williams, and could reduce incentives for companies to ramp up production. See, for example, James Politi, Aime Williams, and
Clive Cookson, “US official hits out at hoarding of coronavirus medical supplies,” Clive Cookson, “US official hits out at hoarding of coronavirus medical supplies,” Financial Times,” March 5, 2020. ,” March 5, 2020.
7996 World Trade Organization, “COVID-19 and World Trade,” last updated March 31, 2020, World Trade Organization, “COVID-19 and World Trade,” last updated March 31, 2020,
https://www.wto.org/english/tratop_e/covid19_e/covid19_e.htm. https://www.wto.org/english/tratop_e/covid19_e/covid19_e.htm.
8097 G20 Leaders’ Statement, “Extraordinary G20 Leaders Summit Statement on COVID-19,” March 30, 2020, G20 Leaders’ Statement, “Extraordinary G20 Leaders Summit Statement on COVID-19,” March 30, 2020,
https://g20.org/en/media/Documents/G20_Extraordinary%20G20%20Leaders%E2%80%99%20Summit_Statement_Ehttps://g20.org/en/media/Documents/G20_Extraordinary%20G20%20Leaders%E2%80%99%20Summit_Statement_E
N%20(3).pdf. N%20(3).pdf.
8198 Lili Bayer, Jillian Deutsch, Jakob Hanke Vale, and Paola Tamma, “EU Moves To Limit Exports of Medical Lili Bayer, Jillian Deutsch, Jakob Hanke Vale, and Paola Tamma, “EU Moves To Limit Exports of Medical
Equipment Outside the Bloc,” Equipment Outside the Bloc,” Politico, March 15, 2020. , March 15, 2020.
82 99 Simon J. Evenett, Simon J. Evenett, Tackling Coronavirus: The Trade Policy Dimension, Swiss Institute of International Economics , Swiss Institute of International Economics
and Department of Economics, University of St. Gallen, Switzerland, March 10, 2020. Some countries, including and Department of Economics, University of St. Gallen, Switzerland, March 10, 2020. Some countries, including
Australia, Brunei, Canada, Chile, Myanmar, New Zealand and Singapore, have pledged “to keep trade lines open.” Australia, Brunei, Canada, Chile, Myanmar, New Zealand and Singapore, have pledged “to keep trade lines open.”
Andrea Shalal, “U.S. Should Refrain from Export Controls in Pandemic Response: Chamber of Commerce,” Andrea Shalal, “U.S. Should Refrain from Export Controls in Pandemic Response: Chamber of Commerce,” Reuters, ,
March 25, 2020March 25, 2020; and World Customs Organization, “List of National Legislation of Countries that Adopted Temporary Export Restrictions on Certain Categories of Critical Medical Supplies in Response to Covid-19,” http://www.wcoomd.org/en/topics/facilitation/activities-and-programmes/natural-disaster/list-of-countries-coronavirus.aspx. 100.
83 CRS calculations using data from the U.S. International Trade Commission’s DataWeb and Global Trade Atlas. CRS calculations using data from the U.S. International Trade Commission’s DataWeb and Global Trade Atlas.
84101 World Trade Organization, “COVID-19: Trade and trade-related measures,” last updated July 31, 2020, World Trade Organization, “COVID-19: Trade and trade-related measures,” last updated July 31, 2020,
https://www.wto.org/english/tratop_e/covid19_e/trade_related_goods_measure_e.htm. https://www.wto.org/english/tratop_e/covid19_e/trade_related_goods_measure_e.htm.
Congressional Research Service Congressional Research Service
2933

COVID-19: China Medical Supply Chains and Broader Trade Issues

The Chinese government released top-level import and export figures to the media in early March 2020, but China Customs did not release its detailed January-February 2020 monthly trade data, as scheduled on March 19, 2020 until 11 days later on March 30, 2020. This data is important in providing additional details on trade patterns during the COVID-19 pandemic, including concentrated areas of trade drops, as well as shifting patterns of trade during the COVID-19 pandemic, including concentrated areas of trade drops, as well as shifting patterns of trade
for medical supplies in and out of China. China Customs also delayed data releases in 2018 during the several for medical supplies in and out of China. China Customs also delayed data releases in 2018 during the several
rounds of U.S. tariffs and PRC counter-tariffs under Section 301, raising questions about the Chinese government’s rounds of U.S. tariffs and PRC counter-tariffs under Section 301, raising questions about the Chinese government’s
motives and the accuracy of the data eventually released.motives and the accuracy of the data eventually released.85102 Analysts assess it is possible that the Chinese Analysts assess it is possible that the Chinese
government in these cases sought to adjust official trade data to reflect broader policy objectives and minimize any government in these cases sought to adjust official trade data to reflect broader policy objectives and minimize any
signs of economic or trade downturn. signs of economic or trade downturn.
Domestic Supply: U.S. vs Foreign Made Products
The COVID-19 pandemic exposed the gaps in U.S. domestic industry and trade data The COVID-19 pandemic exposed the gaps in U.S. domestic industry and trade data,
~~complicating~~ that complicated the ability to assess U.S. domestic capabilities in relation to global supply and trade the ability to assess U.S. domestic capabilities in relation to global supply and trade
dependencies for critical products in a time of crisis.dependencies for critical products in a time of crisis.86103 In general, the U.S. government does not In general, the U.S. government does not
keep records of the domestic production of specific, individual items (e.g., surgical masks and keep records of the domestic production of specific, individual items (e.g., surgical masks and
gloves) by quantity or value—and the U.S. government also does not track how much of this gloves) by quantity or value—and the U.S. government also does not track how much of this
production is ultimately destined for the U.S. market.production is ultimately destined for the U.S. market.87104 Of what the United States produces Of what the United States produces
domestically, the U.S. government tracks categories of products that are exported to foreign domestically, the U.S. government tracks categories of products that are exported to foreign
markets. It also collects statistics for broad industry sectors, such as gross output, value added—markets. It also collects statistics for broad industry sectors, such as gross output, value added—
also known as gross domestic product (GDP) by industry—and intermediate inputs.also known as gross domestic product (GDP) by industry—and intermediate inputs.88105 Another Another
complicating factor in the analysis of U.S. production—and U.S. reliance on imports—of PPE complicating factor in the analysis of U.S. production—and U.S. reliance on imports—of PPE
and medical products is that there are no domestic or internationally agreed guidelines, standards, and medical products is that there are no domestic or internationally agreed guidelines, standards,
or definitions of what specific products make up these categories. Therefore, questions such as or definitions of what specific products make up these categories. Therefore, questions such as
“how much PPE does the United States currently produce relative to what it imports?” or “by “how much PPE does the United States currently produce relative to what it imports?” or “by
how much has domestic production of pharmaceuticals increased since the COVID-19 outbreak?” how much has domestic production of pharmaceuticals increased since the COVID-19 outbreak?”
are difficult to answer.are difficult to answer. 89106
However, data from an annual government survey of U.S. manufacturers, analyzed in conjunction However, data from an annual government survey of U.S. manufacturers, analyzed in conjunction
with official U.S. trade statistics, may give a partial insight into some domestic production with official U.S. trade statistics, may give a partial insight into some domestic production
activities and provide a rough estimate of the share that imported PPE and medical products activities and provide a rough estimate of the share that imported PPE and medical products
account for of total U.S. supply. account for of total U.S. supply.
~~Annual Survey of Manufactures and Trade Statistics~~
~~The U.S. Census Bureau’s Annual Survey of Manufactures (ASM) measures current U.S.~~
~~manufacturing activity such as industry outputs, inputs, and operating status.90 It provides sample~~

85102 Chen Aizhu and Tom Daly, “Where’s the Data? Angst for Commods Traders as China Trade Figures Held in Chen Aizhu and Tom Daly, “Where’s the Data? Angst for Commods Traders as China Trade Figures Held in
Limbo,” Reuters, June 1, 2018, https://www.reuters.com/article/us-usa-trade-china-data/wheres-the-data-angst-for-Limbo,” Reuters, June 1, 2018, https://www.reuters.com/article/us-usa-trade-china-data/wheres-the-data-angst-for-
commods-traders-as-china-trade-figures-held-in-limbo-idUSKCN1IX4LQ. commods-traders-as-china-trade-figures-held-in-limbo-idUSKCN1IX4LQ.
86103 For more detail, see CRS In Focus IF11648, For more detail, see CRS In Focus IF11648, Medical Supply Chains and Policy Options: The Data Challenge, by , by
Andres B. Schwarzenberg and Karen M. Sutter. Andres B. Schwarzenberg and Karen M. Sutter.
87104 The U.S. Department of Commerce, for example, collects more information than it makes publicly available due to The U.S. Department of Commerce, for example, collects more information than it makes publicly available due to
confidentiality requirements (e.g., 13 U.S.C § 9 and 15 C.F.R. § 801.5). However, that information does not include confidentiality requirements (e.g., 13 U.S.C § 9 and 15 C.F.R. § 801.5). However, that information does not include
details on specific items produced by manufacturing establishments. details on specific items produced by manufacturing establishments.
88105 For more detail, see U.S. Bureau of Economic Analysis, “Industry Economic Accounts,” at For more detail, see U.S. Bureau of Economic Analysis, “Industry Economic Accounts,” at
https://www.bea.gov/data/economic-accounts/industry. However, quantity and value information of total U.S. https://www.bea.gov/data/economic-accounts/industry. However, quantity and value information of total U.S.
production is not available at the item level. production is not available at the item level.
89106 See CRS In Focus IF11648, See CRS In Focus IF11648, Medical Supply Chains and Policy Options: The Data Challenge, by Andres B. , by Andres B.
Schwarzenberg and Karen M. Sutter Schwarzenberg and Karen M. Sutter
~~90 U.S. Census Bureau, “Annual Survey of Manufactures (ASM),” at~~
~~https://www.census.gov/econ/overview/ma0300.html.~~
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Annual Survey of Manufactures and Trade Statistics The U.S. Census Bureau’s Annual Survey of Manufactures (ASM) measures current U.S. manufacturing activity such as industry outputs, inputs, and operating status.107 It provides sample estimates of statistics for manufacturing establishments in the United States based on the North estimates of statistics for manufacturing establishments in the United States based on the North
American Industry Classification System (NAICS).American Industry Classification System (NAICS).91108
The ASM statistics include the value added by manufacturing, total value of shipments for close The ASM statistics include the value added by manufacturing, total value of shipments for close
to 1,400 classes of manufactured products, costs of materials, and inventories. NAICS categories to 1,400 classes of manufactured products, costs of materials, and inventories. NAICS categories
capture most, but not necessarily all, establishments producing PPE and medical products. capture most, but not necessarily all, establishments producing PPE and medical products.
However, there is a time lag with the data, which presents challenges in developing a real time However, there is a time lag with the data, which presents challenges in developing a real time
picture of the industry, as 2018 is the most recent year for which data are available.picture of the industry, as 2018 is the most recent year for which data are available.92109
In addition, the U.S. Bureau of Economic Analysis (BEA) and the Census Bureau collect data on In addition, the U.S. Bureau of Economic Analysis (BEA) and the Census Bureau collect data on
U.S. imports on a monthly, quarterly, and yearly basis.U.S. imports on a monthly, quarterly, and yearly basis.93110 Using these data, and matching them Using these data, and matching them
with the ASM, CRS was able to obtain a rough estimate of the imported—and thereby infer the with the ASM, CRS was able to obtain a rough estimate of the imported—and thereby infer the
domestic—share of U.S. supply for categories considered to include PPE, pharmaceuticals, and domestic—share of U.S. supply for categories considered to include PPE, pharmaceuticals, and
other medical-related products in 20other medical-related products in 2018 (Table 6). The figures were calculated at the NAICS 6-. The figures were calculated at the NAICS 6-
digit subheading level—the most disaggregated level for which NAICS data are available. digit subheading level—the most disaggregated level for which NAICS data are available.
However, because these are broad categories, the data may underestimate or overestimate actual However, because these are broad categories, the data may underestimate or overestimate actual
domestic production and imports.domestic production and imports.94111
Estimates suggest that the United States seems to be heavily dependent on certain imports (for Estimates suggest that the United States seems to be heavily dependent on certain imports (for
more than 90% of domestic supply in some cases). However, foreign source dependence varies more than 90% of domestic supply in some cases). However, foreign source dependence varies
by product category. In 2018, the United States imported many low-end and labor-intensive by product category. In 2018, the United States imported many low-end and labor-intensive
manufactured products primarily from China (e.g., apparel from fabric such as hospital gowns). manufactured products primarily from China (e.g., apparel from fabric such as hospital gowns).
Many of the higher value added and skill-intensive imported products, on the other hand, came Many of the higher value added and skill-intensive imported products, on the other hand, came
mainly from Europe (e.g., irradiation machines and biological products such as vaccines). mainly from Europe (e.g., irradiation machines and biological products such as vaccines).
Table 6. Estimate of the Imported Share of U.S. Domestic Supply: Select Medical-
Related Manufactured Good Categories in 2018
Share of Domestic Supply (%) Share of Domestic Supply (%)
~~Total~~
U.S. Imports
U.S.
~~Supply~~Total
from
Imports
NAICS
~~Import~~
Supply European
from
Code
Description
sImports
Union
China
315220 ~~Men'~~ Men’s and Boys' Cut and Sew Apparel s and Boys' Cut and Sew Apparel
98 98
3 3
20 20
[apparel from fabric, including [apparel from fabric, including
hospital/medical/laboratory service apparel] hospital/medical/laboratory service apparel]
315240 Women's, Girls', and Infants' Cut and Sew Apparel
96
3
36
~~[apparel from fabric, including~~
~~hospital/medical/laboratory service apparel]~~
333314 Optical Instruments and Lenses
94
14
23
~~[microscopes, telescopes, prisms, and lenses; coating or~~
~~polishing lenses; and mounting lenses]~~

91 107 U.S. Census Bureau, “Annual Survey of Manufactures (ASM),” at https://www.census.gov/econ/overview/ma0300.html. 108 For more detail on NAICS, see U.S. Census Bureau, “North American Industry Classification System: Introduction For more detail on NAICS, see U.S. Census Bureau, “North American Industry Classification System: Introduction
to NAICS,” at https://www.census.gov/eos/www/naics/. to NAICS,” at https://www.census.gov/eos/www/naics/.
92109 U.S. Census Bureau, “Annual Survey of Manufactures: Summary Statistics for Industry Groups and Industries in the U.S. Census Bureau, “Annual Survey of Manufactures: Summary Statistics for Industry Groups and Industries in the
U.S.: 2018.” U.S.: 2018.”
93110 U.S. Department of Commerce, U.S. Bureau of Economic Analysis (“International Transactions” and “International U.S. Department of Commerce, U.S. Bureau of Economic Analysis (“International Transactions” and “International
Trade in Goods and Services”) and U.S. Census Bureau (“Foreign Trade”). Trade in Goods and Services”) and U.S. Census Bureau (“Foreign Trade”).
94 111 U.S. import statistics include imports of goods from U.S.-owned affiliates abroad. U.S. import statistics include imports of goods from U.S.-owned affiliates abroad.
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COVID-19: China Medical Supply Chains and Broader Trade Issues

~~Total~~
U.S. Imports
U.S.
~~Supply~~Total
from
Imports
NAICS
~~Import~~
Supply European
from
Code
Description
sImports
Union
China
~~325414~~ 315240 Women's, Girls', and Infants' Cut and Sew Apparel 96 3 36 [apparel from fabric, including hospital/medical/laboratory service apparel] 333314 Optical Instruments and Lenses 94 14 23 [microscopes, telescopes, prisms, and lenses; coating or polishing lenses; and mounting lenses] 325414 Biological Products (Except Diagnostic) Biological Products (Except Diagnostic)
79 79
59 59
* *
[vaccines, toxoids, blood fractions, and culture media of [vaccines, toxoids, blood fractions, and culture media of
plant or animal origin, except diagnostic] plant or animal origin, except diagnostic]
339115 Ophthalmic Goods Ophthalmic Goods
60 60
22 22
20 20
[prescription eyeglasses, contact lenses, sunglasses, [prescription eyeglasses, contact lenses, sunglasses,
eyeglass frames, reading glasses made to standard eyeglass frames, reading glasses made to standard
powers, and protective eyewear] powers, and protective eyewear]
313210 Broadwoven Fabrics Broadwoven Fabrics
55 55
10 10
17 17
[fabrics and felts, including surgical gauzes] [fabrics and felts, including surgical gauzes]
325411 Medicinal and Botanical Drugs and Vitamins Medicinal and Botanical Drugs and Vitamins
48 48
34 34
8 8
[uncompounded medicinal chemicals and their [uncompounded medicinal chemicals and their
derivatives and botanicals] derivatives and botanicals]
325413 In-Vitro Diagnostic Substances In-Vitro Diagnostic Substances
48 48
27 27
3 3
[chemical, biological, or radioactive diagnostic [chemical, biological, or radioactive diagnostic
substances] substances]
325199 All Other Basic Organic Chemicals All Other Basic Organic Chemicals
42 42
14 14
9 9
[isopropyl alcohol and glycerin] [isopropyl alcohol and glycerin]
334517 Irradiation Apparatus Irradiation Apparatus
41 41
25 25
4 4
[beta-rays, gamma-rays, X-rays, or other ionizing [beta-rays, gamma-rays, X-rays, or other ionizing
radiation apparatus] radiation apparatus]
339113 Surgical Appliances and Supplies Surgical Appliances and Supplies
39 39
15 15
6 6
[orthopedic devices, prosthetic appliances, surgical [orthopedic devices, prosthetic appliances, surgical
dressings, crutches, surgical sutures, personal industrial dressings, crutches, surgical sutures, personal industrial
safety devices] safety devices]
325412 Pharmaceutical Preparations Pharmaceutical Preparations
39 39
23 23
* *
[in-vivo diagnostic substances and pharmaceutical [in-vivo diagnostic substances and pharmaceutical
preparations] preparations]
339112 Surgical and Medical Instruments Surgical and Medical Instruments
36 36
10 10
2 2
[syringes, needles, anesthesia apparatus, blood [syringes, needles, anesthesia apparatus, blood
transfusion equipment, catheters, surgical clamps, and transfusion equipment, catheters, surgical clamps, and
medical thermometers] medical thermometers]
Source: CRS analysis with data from the U.S. Census Bureau and the U.S. International Trade Commission. CRS analysis with data from the U.S. Census Bureau and the U.S. International Trade Commission.
Notes: (1) Shares are rough estimates calculated at the NAICS 6-digit subheading level, which may cover (1) Shares are rough estimates calculated at the NAICS 6-digit subheading level, which may cover
products that are not for medical use; (2) 2018 is the most recent year for which annual data from the ASM are products that are not for medical use; (2) 2018 is the most recent year for which annual data from the ASM are
available; (3) * = Share of domestic supply is less than 0.05%; and (4) descriptions in brackets are only select available; (3) * = Share of domestic supply is less than 0.05%; and (4) descriptions in brackets are only select
examples of products or items covered by the NAICS subheading. examples of products or items covered by the NAICS subheading.
Congressional Research Service 36 COVID-19: China Medical Supply Chains and Broader Trade Issues This picture, however, may have changed between 2018 and 2020 as China This picture, however, may have changed between 2018 and 2020 as China ~~capitalizes~~capitalized on the on the
investments that the government has made in recent years to push ahead on ambitious state-led investments that the government has made in recent years to push ahead on ambitious state-led
programs such as programs such as Made in China 2025 (MIC2025). (MIC2025).95112 One of the goals of MIC2025 is to One of the goals of MIC2025 is to
modernize the Chinese economy and turn China into a global leader in the manufacturing of modernize the Chinese economy and turn China into a global leader in the manufacturing of

~~95 For more detail on MIC2025, see CRS In Focus IF10964,~~ ~~“Made in China 2025” Industrial Policies: Issues for~~
~~Congress, by Karen M. Sutter~~
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~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

biopharmaceuticals and high-performance medical devices. Lack of data and other constraints biopharmaceuticals and high-performance medical devices. Lack of data and other constraints
limit the U.S. ability to assess in real time the progress of these efforts and their impact on the limit the U.S. ability to assess in real time the progress of these efforts and their impact on the
U.S. economy and industrial base. U.S. economy and industrial base.
Other Sources of Data and Information
Sizing up the U.S. government’s reliance on foreign goods faces similar challenges in data Sizing up the U.S. government’s reliance on foreign goods faces similar challenges in data
limitations.limitations.96113 The U.S. General Services Administration (GSA) maintains a database, the Federal The U.S. General Services Administration (GSA) maintains a database, the Federal
Procurement Data System-Next Generation (FPDS-NG, or FPDS), where federal agencies are Procurement Data System-Next Generation (FPDS-NG, or FPDS), where federal agencies are
required to report procurement contracts whose estimated value is $10,000 or more.required to report procurement contracts whose estimated value is $10,000 or more.97114 The The
procurement data in FPDS-NG are not fully reliable. There are documented quality issues procurement data in FPDS-NG are not fully reliable. There are documented quality issues
documented relating to accuracy, completeness, and timeliness of its data.documented relating to accuracy, completeness, and timeliness of its data.98115 These limitations These limitations
have prompted many analysts to rely on FPDS-NG data primarily to identify broad trends and have prompted many analysts to rely on FPDS-NG data primarily to identify broad trends and
produce rough estimates, or to gather information about specific contracts. With these limitations produce rough estimates, or to gather information about specific contracts. With these limitations
in mind, FPDS-NG data may provide general information regarding the value, quantity, and types in mind, FPDS-NG data may provide general information regarding the value, quantity, and types
of domestic and foreign-made goods hat U.S. government agencies procure. of domestic and foreign-made goods hat U.S. government agencies procure.
Other information on domestic capacity, as well as changes resulting from increased production Other information on domestic capacity, as well as changes resulting from increased production
in the aftermath of the COVID-19 outbreak, generally comes from private research firms, news in the aftermath of the COVID-19 outbreak, generally comes from private research firms, news
outlets, and trade associations. Many of the figures cited are often based on surveys, firms’ press outlets, and trade associations. Many of the figures cited are often based on surveys, firms’ press
releases, or firms/industries’ forecasts, which may differ significantly from actual production. releases, or firms/industries’ forecasts, which may differ significantly from actual production.
China’s Economic Recovery: Prospects and
Implications
China’s leaders China’s leaders ~~are focusing~~have focused on resuming manufacturing production to jumpstart economic on resuming manufacturing production to jumpstart economic
growth.growth. 99116 At an executive session of China’s cabinet, the State Council, on March 17, At an executive session of China’s cabinet, the State Council, on March 17, 2020, Chinese Chinese
officials emphasized the importance of stabilizing employment and announced that the officials emphasized the importance of stabilizing employment and announced that the
government would streamline business approvals and fast-track approvals for large infrastructure government would streamline business approvals and fast-track approvals for large infrastructure
projects. They also offered government support to alleviate shortages of labor, raw materials, projects. They also offered government support to alleviate shortages of labor, raw materials,
funds, and protective gear.funds, and protective gear.~~100~~117 To facilitate economic activity, the Chinese government also appears To facilitate economic activity, the Chinese government also appears
~~to be liberalizing company health requirements and lifting intra-provincial and intra-city travel~~
~~and transportation restrictions. NDRC spokesperson Meng Wei said on March 17, 2020 that~~
~~transportation was operating normally. Zhejiang, Jiangsu, and Shanghai were operating at close to~~
~~100% of normal capacity; and over 90% of large-scale industrial companies outside of Hubei had~~

96 112 For more detail on MIC2025, see CRS In Focus IF10964, “Made in China 2025” Industrial Policies: Issues for Congress, by Karen M. Sutter. 113 For more detail on the role of international trade in U.S. government procurement, see CRS In Focus IF11580, For more detail on the role of international trade in U.S. government procurement, see CRS In Focus IF11580, U.S.
Government Procurement and International Trade, by Andres B. Schwarzenberg. , by Andres B. Schwarzenberg.
97114 Although it is not material for the immediate purposes of this report, the primary federal procurement reporting tool Although it is not material for the immediate purposes of this report, the primary federal procurement reporting tool
is scheduled to move from FPDS to the System for Award Management (SAM) in October 2020. is scheduled to move from FPDS to the System for Award Management (SAM) in October 2020.
98115 For more information on FPDS-NG data quality issues, see “Appendix A. FPDS Background, Accuracy Issues, and For more information on FPDS-NG data quality issues, see “Appendix A. FPDS Background, Accuracy Issues, and
Future Plans” in CRS Report R44010, Future Plans” in CRS Report R44010, Defense Acquisitions: How and Where DOD Spends Its Contracting Dollars, by , by
John F. Sargent Jr. and Christopher T. Mann. John F. Sargent Jr. and Christopher T. Mann.
99116 Ryan Woo, Se Young Lee, David Stanway, and Andrew Galbraith, “Goldman Sees China’s Economy Shrinking 9 Ryan Woo, Se Young Lee, David Stanway, and Andrew Galbraith, “Goldman Sees China’s Economy Shrinking 9
Percent in First Quarter Amid Coronavirus Outbreak,” Percent in First Quarter Amid Coronavirus Outbreak,” Reuters, March 16, 2020, https://www.reuters.com/article/us-, March 16, 2020, https://www.reuters.com/article/us-
health-coronavirus-china-toll/goldman-sees-chinas-economy-shrinking-9-in-first-quarter-amid-coronavirus-outbreak-health-coronavirus-china-toll/goldman-sees-chinas-economy-shrinking-9-in-first-quarter-amid-coronavirus-outbreak-
idUSKBN21340T. idUSKBN21340T.
~~100~~117 Hua Xia, “China Advances Streamlining Approval Procedures, Fostering New Growth Drivers to Keep Hua Xia, “China Advances Streamlining Approval Procedures, Fostering New Growth Drivers to Keep
~~Employment Stable,” Xinhua, March 17, 2020, http://www.xinhuanet.com/english/2020-03/17/c_138888715.htm.~~
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COVID-19: China Medical Supply Chains and Broader Trade Issues

to have liberalized company health requirements and lifted intra-provincial and intra-city travel and transportation restrictions. NDRC spokesperson Meng Wei said on March 17, 2020 that transportation was operating normally. Zhejiang, Jiangsu, and Shanghai were operating at close to 100% of normal capacity; and over 90% of large-scale industrial companies outside of Hubei had resumed production.118~~resumed production.101~~ Company reports of opening and resumption of operations Company reports of opening and resumption of operations ~~may~~did not necessarily ~~not~~ mean mean
that these facilities that these facilities ~~are~~were fully online or operating at pre-crisis levels, however. Several economic fully online or operating at pre-crisis levels, however. Several economic
analysts and news outlets, including the analysts and news outlets, including the Financial Times, , ~~have~~ published alternative measures of published alternative measures of
business resumption rates using proxies for economic activity—such as data on traffic business resumption rates using proxies for economic activity—such as data on traffic
congestion, air pollution levels, and container freight movement. Overall, many of these measures congestion, air pollution levels, and container freight movement. Overall, many of these measures
~~suggest~~suggested that businesses across China that businesses across China ~~are not returning~~did not return to full capacity at the rates to full capacity at the rates ~~being~~ reported reported
by local and provincial governments.by local and provincial governments.~~102~~119 In Wuhan, the center of the original outbreak, the Hubei In Wuhan, the center of the original outbreak, the Hubei
provincial government issued a notice in March—that applies to Wuhan as Hubei’s capital—provincial government issued a notice in March—that applies to Wuhan as Hubei’s capital—
allowing certain companies to resume work ahead of other production. This included companies allowing certain companies to resume work ahead of other production. This included companies
in the medical and health industry, as well as companies producing protective gear, disinfectant, in the medical and health industry, as well as companies producing protective gear, disinfectant,
daily necessities, agriculture, and products critical to national and global supply chains.daily necessities, agriculture, and products critical to national and global supply chains.~~103~~120 China emerged in June 2020 as the first major country to announce a return to economic growth since the outbreak of COVID-19, but consumption lagged production recovery and the economic recovery has relied on government spending and exports to boost growth. The government reported 3.2% gross domestic product (GDP) growth in the second quarter and 4.9% GDP growth in the third quarter of 2020.121 The International Monetary Fund (IMF) projects China’s economy to grow by 1.9% in 2020. China since February 2020 has provided an estimated $506 billion in stimulus and increased the government’s budget deficit target to a record high of 3.6% of GDP, up from 2.8% in 2019. Shifting from efforts to reduce debt, the government announced the issuance of $142.9 billion of special treasury bonds for the first time since 2007; increased the quota for local government special bonds (a source of infrastructure funding); and fast-tracked issuance of corporate bonds to cover pandemic costs, but with potential broader uses. The IMF estimates that the fiscal measures and financing plans announced amounted to 4.1% of the China’s GDP, as of July 2020.122 China’s National Bureau of Statistics in November 2020 recorded a 5% year-on-year increase in retail sales, a 2.6% year-on-year increase in fixed asset investment, and a 7% year-on-year increase in value-added industrial output. The largest growth Employment Stable,” Xinhua, March 17, 2020, http://www.xinhuanet.com/english/2020-03/17/c_138888715.htm. 118 Ryan Woo, Se Young Lee, David Stanway, and Andrew Galbraith, “Goldman Sees China’s Economy Shrinking 9 Percent in First Quarter Amid Coronavirus Outbreak,” Reuters, March 16, 2020, https://www.reuters.com/article/us-health-coronavirus-china-toll/goldman-sees-chinas-economy-shrinking-9-in-first-quarter-amid-coronavirus-outbreak-idUSKBN21340T. 119 John Burn-Murdoch, Cale Tilford, Steven Bernard, Keith Fray, and Alan Smith, “Coronavirus Economic Tracker: Latest Global Fallout,” Financial Times, accessed March 26, 2020; and “Coronavirus: Getting China Back to Work,” Trivium China, last updated April 1, 2020, https://triviumchina.com/2020/03/07/coronavirus-getting-china-back-to-work/. 120 Li Yan, “Wuhan Companies Begin to Resume Production,” China Daily, March 17, 2020, http://www.ecns.cn/m/business/2020-03-17/detail-ifzunmih1236408.shtml. 121 National Bureau of Statistics of China, “Preliminary Accounting Results of GDP for the Third Quarter of 2020,” October 21, 2020, http://www.stats.gov.cn/english/PressRelease/202010/t20201021_1795384.html. 122 International Monetary Fund, “Policy Responses to COVID-19,” updated December 4, 2020, https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#C. Congressional Research Service 38 COVID-19: China Medical Supply Chains and Broader Trade Issues in investment in industrial output growth, however, was recorded in non-ferrous metals and real estate investment, not broader areas of domestic consumption.123
China Positioning to Export
China’s economy depends on exports and the foreign exchange it earns through exports, as well China’s economy depends on exports and the foreign exchange it earns through exports, as well
as on the large productive role that foreign firms play in the domestic market and as exporters. as on the large productive role that foreign firms play in the domestic market and as exporters.
Seeking to stabilize drops in foreign investment and trade, on March 12, Commerce Vice Minister Seeking to stabilize drops in foreign investment and trade, on March 12, Commerce Vice Minister
Wang Shouwen held a call with 400 members of the American Chamber of Commerce in China, Wang Shouwen held a call with 400 members of the American Chamber of Commerce in China,
and on March 13, he held a similar webinar with the European Chamber of Commerce in China’s and on March 13, he held a similar webinar with the European Chamber of Commerce in China’s
Advisory Council. Vice Minister Wang pressed companies to reopen operations and increase Advisory Council. Vice Minister Wang pressed companies to reopen operations and increase
investments in China. Other Chinese agencies represented included NDRC, MIIT, the National investments in China. Other Chinese agencies represented included NDRC, MIIT, the National
Health Commission, the General Administration of Drug Supervision, the State Administration Health Commission, the General Administration of Drug Supervision, the State Administration
for Market Regulation, the General Administration of Customers, the Civil Aviation for Market Regulation, the General Administration of Customers, the Civil Aviation
Administration of China, the Ministry of Transportation, and the State Taxation Administration.Administration of China, the Ministry of Transportation, and the State Taxation Administration.~~104~~124
During past crises, such as the global financial crisis of 2008-09, China has pressed firms to idle During past crises, such as the global financial crisis of 2008-09, China has pressed firms to idle
facilities and keep them production-ready (instead of shuttering them) and retain workers (instead facilities and keep them production-ready (instead of shuttering them) and retain workers (instead
of laying them off) to maintain social stability and facilitate efforts to quickly ramp up production of laying them off) to maintain social stability and facilitate efforts to quickly ramp up production
and exports later.and exports later. ~~105~~125 These stimulus efforts are sometimes less visible than fiscal policies in other These stimulus efforts are sometimes less visible than fiscal policies in other
countries. Several market watchers have noted that, while a 17% drop in Chinese exports in countries. Several market watchers have noted that, while a 17% drop in Chinese exports in
January-February 2020 January-February 2020 iswas significant, it significant, it iswas not as dramatic when considering China’s not as dramatic when considering China’s economy was shuttered for much of February. This indicates that Chinese industry may have had sufficient stock already at ports for export when the crisis hit. This also signals how China was able to resume an export push in the third quarter of 2020.126 China’s economic recovery has been important to the United States and the global economy, as it is an important center of demand and supply. At the same time, during this period of global economic downturn, the United States and other countries are now potentially vulnerable to a concerted PRC export push that has been expanding since summer 2020 and any effort China makes to take additional market share in strategic sectors. 123 China’s National Bureau of Statistics, “2020 年 1-11 月国固定资产投资（不含农户）增长 2.6% (Fixed Asset Investment in China (Excluding Rural Areas) Increased by 2.6% Between January and November 2011),” December 15, 2020, http://www.stats.gov.cn/tjsj/zxfb/202012/t20201215_1809265.html?mc_cid=9e6eedccdb&mc_eid=ac692ae0c2. 124~~economy~~

~~101 Ryan Woo, Se Young Lee, David Stanway, and Andrew Galbraith, “Goldman Sees China’s Economy Shrinking 9~~
~~Percent in First Quarter Amid Coronavirus Outbreak,” Reuters, March 16, 2020, https://www.reuters.com/article/us-~~
~~health-coronavirus-china-toll/goldman-sees-chinas-economy-shrinking-9-in-first-quarter-amid-coronavirus-outbreak-~~
~~idUSKBN21340T.~~
~~102 John Burn-Murdoch, Cale Tilford, Steven Bernard, Keith Fray, and Alan Smith, “Coronavirus Economic Tracker:~~
~~Latest Global Fallout,” Financial Times, accessed March 26, 2020; and “Coronavirus: Getting China Back to Work,”~~
~~Trivium China, last updated April 1, 2020, https://triviumchina.com/2020/03/07/coronavirus-getting-china-back-to-~~
~~work/.~~
~~103 Li Yan, “Wuhan Companies Begin to Resume Production,” China Daily, March 17, 2020,~~
~~http://www.ecns.cn/m/business/2020-03-17/detail-ifzunmih1236408.shtml.~~
~~104~~ “MOFCOM VM Wang Shouwen Holds Back to Work Call,” American Chamber of Commerce in China, March 19, “MOFCOM VM Wang Shouwen Holds Back to Work Call,” American Chamber of Commerce in China, March 19,
2020, https://www.amchamchina.org/news/mofcom-vm-wang-shouwen-holds-back-to-work-call; and “European 2020, https://www.amchamchina.org/news/mofcom-vm-wang-shouwen-holds-back-to-work-call; and “European
Chamber’s Conference Call with the Vice Minister of Commerce Wang Shouwen Joined by Multiple Departments on Chamber’s Conference Call with the Vice Minister of Commerce Wang Shouwen Joined by Multiple Departments on
COVID-19’s Impact to FIEs,” European Chamber of Commerce in China, March 13, 2020, COVID-19’s Impact to FIEs,” European Chamber of Commerce in China, March 13, 2020,
https://www.europeanchamber.com.cn/en/lobby-https://www.europeanchamber.com.cn/en/lobby-
~~actions/3949/European_Chamber_s_Conference_Call_with_Vice_Minister_of_Commerce_Wang_Shouwen_Joined_b~~
~~y_Multiple_Departments_on_COVID_19_Impacts_to_FIEs.~~
~~105~~actions/3949/European_Chamber_s_Conference_Call_with_Vice_Minister_of_Commerce_Wang_Shouwen_Joined_by_Multiple_Departments_on_COVID_19_Impacts_to_FIEs. 125 Yukon Huang, “China’s Economic Growth Now Depends on the West,” Yukon Huang, “China’s Economic Growth Now Depends on the West,” Carnegie Endowment for International
Peace, March 19, 2020, https://carnegieendowment.org/2020/03/19/china-s-economic-growth-now-depends-on-west-, March 19, 2020, https://carnegieendowment.org/2020/03/19/china-s-economic-growth-now-depends-on-west-
pub-81326. pub-81326.
~~Congressional Research Service~~
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~~link to page 40~~ ~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~was shuttered for much of February. This indicates that Chinese industry may have had sufficient~~
~~stock already at ports for export when the crisis hit. This also signals the potential power of a~~
~~resumed export push from China.106~~
~~China’s economic recovery is important to the United States and the global economy, as it is an~~
~~important center of demand and supply. At the same time, during this period of global economic~~
~~downturn, the United States and other countries are now potentially vulnerable to a concerted~~
~~PRC export push and any effort it makes to take additional market share in strategic sectors.~~126 “China January-February Exports Tumble, Imports Down as Coronavirus Batters Trade and Business,” Reuters, March 6, 2020, https://www.reuters.com/article/us-china-economy-trade/china-january-february-exports-tumble-imports-down-as-coronavirus-batters-trade-and-business-idUSKBN20U05R. Congressional Research Service 39 link to page 44 COVID-19: China Medical Supply Chains and Broader Trade Issues
Steel Overcapacity
Chinese overcapacity in steel has been highly contentious for its global impacts, and China could Chinese overcapacity in steel has been highly contentious for its global impacts, and China could
potentially see exports as a quick way to reduce inventories and secure needed cash. Similar to potentially see exports as a quick way to reduce inventories and secure needed cash. Similar to
what happened during the global financial crisis in 2008-09, China is poised to take additional what happened during the global financial crisis in 2008-09, China is poised to take additional
global market share in 2020 because it did not dial back production during the COVID-19 global market share in 2020 because it did not dial back production during the COVID-19
outbreak. Chinese blast furnaces continued to run during the COVID-19 crisis, and China’s steel outbreak. Chinese blast furnaces continued to run during the COVID-19 crisis, and China’s steel
production for January-February 2020 was up 3% over the same period in 2019. Meanwhile, due production for January-February 2020 was up 3% over the same period in 2019. Meanwhile, due
to collapsing domestic demand and logistics constraints, China’s finished steel inventories rose to collapsing domestic demand and logistics constraints, China’s finished steel inventories rose
by 45% in January-February 2020 over the same period in 2019.by 45% in January-February 2020 over the same period in 2019.~~107~~127 China’s steel production at the China’s steel production at the
end of 2019 was already at an all-time high of almost 1 billion tons, with China producing over end of 2019 was already at an all-time high of almost 1 billion tons, with China producing over
50% of global supply, according to the World Steel Association and China’s State Statistical 50% of global supply, according to the World Steel Association and China’s State Statistical
Bureau Bureau (Figure 68)..~~108~~128 China’s crude steel production recovered in July 2020, rising 9.1 China’s crude steel production recovered in July 2020, rising 9.1% ~~percent~~
year-on-year. China’s crude steel production during the January-year-on-year. China’s crude steel production during the January-~~July~~September 2020 period is up 2020 period is up ~~2.8~~4.5% over % over
the same period in 2019. In contrast, crude steel production over the same period is down the same period in 2019. In contrast, crude steel production over the same period is down ~~19.2~~17.9% %
in the EU; down 18.in the EU; down 18.72% in North America; down % in North America; down 2416.5% in India; down % in India; down ~~18.8~~19.1% in Japan; and down % in Japan; and down
~~9.6~~7.5% in South Korea.% in South Korea.~~109~~

~~106 “China January-February Exports Tumble, Imports Down as Coronavirus Batters Trade and Business,” Reuters,~~
~~March 6, 2020, https://www.reuters.com/article/us-china-economy-trade/china-january-february-exports-tumble-~~
~~imports-down-as-coronavirus-batters-trade-and-business-idUSKBN20U05R.~~
~~107~~129 Figure 8. China Raw Steel Production (2000-2019) Source: CRS with data from the World Steel Association. Export VAT Rebate On March 17, 2020, China’s Ministry of Finance announced an increase in the export value added tax (VAT) rebate for almost 1,500 Chinese products, effective March 20, 2020. Most of the 127 Anindya Barman Zacks,” China Steel Output Rises Despite Oversupply and Coronavirus,” Anindya Barman Zacks,” China Steel Output Rises Despite Oversupply and Coronavirus,” Yahoo Finance, March , March
19, 2020. 19, 2020.
~~108~~128 “World Steel in Figures 2019,” World Steel Association, https://www.worldsteel.org/media-centre/press- “World Steel in Figures 2019,” World Steel Association, https://www.worldsteel.org/media-centre/press-
releases/2019/world-steel-in-figures-2019.html; Min Zhang and Tom Daly, “China 2019 Crude Steel Output Jumps releases/2019/world-steel-in-figures-2019.html; Min Zhang and Tom Daly, “China 2019 Crude Steel Output Jumps
8.3%, Sets Second Straight Annual Record,” 8.3%, Sets Second Straight Annual Record,” Reuters, January 16, 2020. , January 16, 2020.
~~109~~129 “July 2020 Crude Steel Production,” World Steel Association, August 24, 2020. “July 2020 Crude Steel Production,” World Steel Association, August 24, 2020.
Congressional Research Service Congressional Research Service
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45 COVID-19: China Medical Supply Chains and Broader Trade Issues

~~Figure 6. China Raw Steel Production (2000-2019)~~

Source: CRS with data from the World Steel Association.
~~Export VAT Rebate~~
~~On March 17, 2020, China’s Ministry of Finance announced it was increasing the export value~~
~~added tax (VAT) rebate for almost 1,500 Chinese products, effective March 20, 2020. Most of the~~
~~products (1,084) are receiving~~products (1,084) received a 13% rebate; a small number (380) a 13% rebate; a small number (380) ~~are receiving~~received a 9% rebate. a 9% rebate.~~110~~
130 The export VAT rebate is a focused policy tool with quick effects that China typically employs to The export VAT rebate is a focused policy tool with quick effects that China typically employs to
boost targeted exports during times of slowdown. It typically reduces the export VAT on products boost targeted exports during times of slowdown. It typically reduces the export VAT on products
down to or close to zero down to or close to zero (Table 7). .
The rebates reflect a strong policy push for steel exports, as well as construction and building The rebates reflect a strong policy push for steel exports, as well as construction and building
materials (e.g., insulation, wood products, glass and fiberglass). China materials (e.g., insulation, wood products, glass and fiberglass). China ~~is also promoting~~also promoted the the
export of a range of insecticides and industrial and organic chemicals. The rebates export of a range of insecticides and industrial and organic chemicals. The rebates ~~encourage~~encouraged the the
export of agricultural products in categories for which China promised to increase purchases from export of agricultural products in categories for which China promised to increase purchases from
the United States—such as live breeding animals, meat and dairy—suggesting the government the United States—such as live breeding animals, meat and dairy—suggesting the government
~~may be incentivizing~~may have incentivized exports for industries that might face additional U.S. imports. Absent in exports for industries that might face additional U.S. imports. Absent in
China’s policy push China’s policy push ~~are~~were incentives to encourage the sale of pharmaceuticals, PPE, and other incentives to encourage the sale of pharmaceuticals, PPE, and other
medical products overseas. medical products overseas.
The export VAT rebates also The export VAT rebates also ~~appears to incentivize~~appear to have incentivized China’s export of wild animals and their China’s export of wild animals and their
byproducts overseas byproducts overseas (Table 7). With assessments that COVID-19 could have originated in wild . With assessments that COVID-19 could have originated in wild
animals and potentially passed to humans in open air markets that sell these animals, China’s animals and potentially passed to humans in open air markets that sell these animals, China’s
National People’s Congress announced on February 24 a ban on the sale and consumption of wild National People’s Congress announced on February 24 a ban on the sale and consumption of wild
animals in China.animals in China.~~111~~131 While the export incentive might While the export incentive might have help the government to eradicate domestic help the government to eradicate domestic
markets by providing an economic incentive to export, this move could markets by providing an economic incentive to export, this move could have spread the risk to spread the risk to the global global
~~market.~~

~~110 “Announcement on Increasing the Export Tax Rebate Rate for Some Products,” PRC Ministry of Finance~~
~~Announcement No. 15, March 17, 2020,~~
~~http://www.chinatax.gov.cn/chinatax/n810341/n810755/c5146338/content.html.~~
~~111 “China’s Legislature Adopts Decision on Banning Illegal Trade, Consumption of Wildlife,” Xinhua, February 24,~~
~~2020, http://www.xinhuanet.com/english/2020-02/24/c_138814328.htm.~~
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market. Table 7. China’s Export VAT Rebates, March 2020 (9%-13%)
Category
Examples
Livestock (Breeding) Livestock (Breeding)
Horses, cattle, pigs, goats, sheep, chicken, turkey, Horses, cattle, pigs, goats, sheep, chicken, turkey,
ducks ducks
Meat (Fresh, Cold, Frozen, Byproducts) Meat (Fresh, Cold, Frozen, Byproducts)
Beef, pork, chicken, lamb Beef, pork, chicken, lamb
Dairy Dairy
Milk and eggs Milk and eggs
Wild Exotic Animals (Live, Frozen, Horns, Claws, Fur, Wild Exotic Animals (Live, Frozen, Horns, Claws, Fur,
Monkeys, edible snakes and reptiles, turtles, raptors, Monkeys, edible snakes and reptiles, turtles, raptors,
Feathers) Feathers)
ostrich, pigeon, beaver, civet; rhino horn ostrich, pigeon, beaver, civet; rhino horn
Cotton, Flowers, Vegetables, Fruits, Oils, Nuts, Spices Cotton, Flowers, Vegetables, Fruits, Oils, Nuts, Spices
Orchids, garlic Orchids, garlic
Industrial and Organic Chemicals; Insecticides Industrial and Organic Chemicals; Insecticides
Used in paints, nylon, latex, rubber, plastics, welding, Used in paints, nylon, latex, rubber, plastics, welding,
anesthetics, and disinfectants anesthetics, and disinfectants
Dental and Paper Products Dental and Paper Products
floss, paste, toilet paper, tissue, napkins, paper towels floss, paste, toilet paper, tissue, napkins, paper towels
Wood, Stone Mil s, Sandpaper Wood, Stone Mil s, Sandpaper
boxes, planks, windows, doors tables boxes, planks, windows, doors tables
Insulation and Drywall; Glass and Fiberglass Insulation and Drywall; Glass and Fiberglass

Pearls, Gemstones, Diamonds for Industrial Use Pearls, Gemstones, Diamonds for Industrial Use

Steel and Nickel Steel and Nickel
117 products in Chapters 72 and 73 including bars and 117 products in Chapters 72 and 73 including bars and
rods, wire, strip, cold rol ed, and hot rol ed steel; rods, wire, strip, cold rol ed, and hot rol ed steel;
stainless bars, rods and wire; pipes and tubes; stainless bars, rods and wire; pipes and tubes;
containers and parts; nickel bars, plate, and sheet containers and parts; nickel bars, plate, and sheet
Source: China’s Ministry of Finance. China’s Ministry of Finance.
130 “Announcement on Increasing the Export Tax Rebate Rate for Some Products,” PRC Ministry of Finance Announcement No. 15, March 17, 2020, http://www.chinatax.gov.cn/chinatax/n810341/n810755/c5146338/content.html. 131 “China’s Legislature Adopts Decision on Banning Illegal Trade, Consumption of Wildlife,” Xinhua, February 24, 2020, http://www.xinhuanet.com/english/2020-02/24/c_138814328.htm. Congressional Research Service 41 link to page 46 link to page 46 COVID-19: China Medical Supply Chains and Broader Trade Issues China Pushing Ahead in Strategic Sectors
Now apparently past its peak of the COVID-19 outbreak, China is prepared to Now apparently past its peak of the COVID-19 outbreak, China is prepared to ~~capitalize on the~~
~~investments it made during the past few months to~~ push ahead on goals outlined in its Made in push ahead on goals outlined in its Made in
China 2025 (MIC 2025) industrial plan, which includes several strategic health sectors China 2025 (MIC 2025) industrial plan, which includes several strategic health sectors (Figure
79). Introduced by China’s State Council in May 2015, MIC 2025 is an ambitious state-led . Introduced by China’s State Council in May 2015, MIC 2025 is an ambitious state-led
program that seeks to create competitive advantages for China in certain strategic industries. The program that seeks to create competitive advantages for China in certain strategic industries. The
plan aims to move China up the manufacturing value chain, expand its global market plan aims to move China up the manufacturing value chain, expand its global market
competitiveness, and reduce its reliance on foreign firms and their intellectual property (IP) over competitiveness, and reduce its reliance on foreign firms and their intellectual property (IP) over
time time (Figure 79). The program . The program ~~has been~~was a major focus of the Trump Administration’s Section 301 a major focus of the Trump Administration’s Section 301
actions against China because of the distorting and predatory policies the initiative has set in actions against China because of the distorting and predatory policies the initiative has set in
motion related to technology transfer, intellectual property, and motion related to technology transfer, intellectual property, and ~~innovation.112~~

~~112 See CRS In Focus IF10964, “Made in China 2025” Industrial Policies: Issues for Congress, by Karen M. Sutter.~~
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~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~
innovation.132
Figure 79. China’s Industrial Priorities (2015-2025)

Source: Notice of the State Council on Issuing Made in China 2025, May 8, 2015, Guofa [2015] No. 28. Notice of the State Council on Issuing Made in China 2025, May 8, 2015, Guofa [2015] No. 28.
Despite relying on China for certain PPE and API, the United States, together with Europe, is a Despite relying on China for certain PPE and API, the United States, together with Europe, is a
global leader in high-end medical devices and novel pharmaceutical drug innovation, sectors in global leader in high-end medical devices and novel pharmaceutical drug innovation, sectors in
which China is seeking to gain ground through its industrial policies such as MIC2025. U.S. which China is seeking to gain ground through its industrial policies such as MIC2025. U.S.
efforts to re-shore or diversify supply chains efforts to re-shore or diversify supply chains ~~are~~have been primarily responding to crisis and may not be primarily responding to crisis and may not be
fully consideringfully considering ~~materiel that will be needed for vaccine deployment as well as~~ strategic strategic
questions about how to sustain U.S. competitiveness in advanced medical sectors given China’s questions about how to sustain U.S. competitiveness in advanced medical sectors given China’s
state-led policies that aim to dilute these advantages over time. Biotechnology, pharmaceuticals, state-led policies that aim to dilute these advantages over time. Biotechnology, pharmaceuticals,
and medical devices are key components of MIC 2025 industrial plans that support Chinese firms and medical devices are key components of MIC 2025 industrial plans that support Chinese firms
in efforts to increase their global market share of generic drugs and medical equipment, and in efforts to increase their global market share of generic drugs and medical equipment, and
develop new innovative drugs. Toward this end, the develop new innovative drugs. Toward this end, the 132 See CRS In Focus IF10964, “Made in China 2025” Industrial Policies: Issues for Congress, by Karen M. Sutter. Congressional Research Service 42 COVID-19: China Medical Supply Chains and Broader Trade Issues Chinese government restricts market access Chinese government restricts market access
for foreign pharmaceutical firms. It requires foreign firms to conduct clinical trials in China, for foreign pharmaceutical firms. It requires foreign firms to conduct clinical trials in China,
disclose proprietary information for drug trials and sales, and enter into partnerships to secure a disclose proprietary information for drug trials and sales, and enter into partnerships to secure a
spot on reimbursable drug lists. Moreover, medical equipment subsidies require that 60% of a spot on reimbursable drug lists. Moreover, medical equipment subsidies require that 60% of a
product’s components be produced in China by a PRC firm.product’s components be produced in China by a PRC firm.~~113~~133 These policies continue despite These policies continue despite
amendments to the Drug Administration Act in 2019 which were designed to make it easier for amendments to the Drug Administration Act in 2019 which were designed to make it easier for
foreign pharmaceutical companies to operate in China. foreign pharmaceutical companies to operate in China.
China may have China may have ~~been serving~~served its commercial ambitions in decisions it made during the height of its commercial ambitions in decisions it made during the height of
the the COVID-19 outbreak in China:  China ~~COVID-19 outbreak in China:~~

~~113 Robert D. Atkinson, “China’s Biopharmaceutical Strategy: Challenge or Complement to U.S. Industry~~
~~Competitiveness?” ITIF, August 12, 2019, https://itif.org/publications/2019/08/12/chinas-biopharmaceutical-strategy-~~
~~challenge-or-complement-us-industry.~~
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~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~ China has~~ restricted access to medical information and research about COVID-restricted access to medical information and research about COVID-
19, 19, including access for the U.S. Centers for Disease Control and Prevention including access for the U.S. Centers for Disease Control and Prevention
(CDC), (CDC), and potentially potentially ~~putting~~put U.S. science, research and development (R&D), and U.S. science, research and development (R&D), and
industry at a disadvantage.industry at a disadvantage.~~114~~134 While some of these controls may While some of these controls may behave been politically politically
motivated, they also may motivated, they also may behave been driven by China’s market ambitions. The driven by China’s market ambitions. The
government’s tight controls over biotechnology and pharmaceutical testing, government’s tight controls over biotechnology and pharmaceutical testing,
treatment, and analysis in China could advantage its state firms. treatment, and analysis in China could advantage its state firms.
 China also appears to see the race to develop a vaccine in terms of economic and  China also appears to see the race to develop a vaccine in terms of economic and
geopolitical competition. Since the COVID-19 outbreak, Chinese government- geopolitical competition. Since the COVID-19 outbreak, Chinese government-
linked hackers have reportedly targeted several U.S. pharmaceutical companies linked hackers have reportedly targeted several U.S. pharmaceutical companies
developing COVID-19 vaccines and therapeutics, such as Moderna, and U.S. developing COVID-19 vaccines and therapeutics, such as Moderna, and U.S.
academic labs engaged in COVID-19 research, including the University of North academic labs engaged in COVID-19 research, including the University of North
Carolina.Carolina.~~115 The Chinese government might prioritize access to any vaccine it~~
~~develops according to both market access terms it negotiates as well as~~
~~geopolitical priorities.116~~135 China’s state firm Fosun Pharma has obtained commercialization and distribution rights for the Pfizer-BioNTech COVID-19 vaccine in China through a strategic investment stake in BioNTech, while China looks to globally distribute the vaccines developed by its state-tied firms through arrangements that some have said will look to advance China’s geopolitical goals (Also see pp. 8-9).136
 China ordered that all viral samples from the beginning of the COVID-19  China ordered that all viral samples from the beginning of the COVID-19
outbreak be destroyed or sent to the Wuhan Institute of Virology, a national lab outbreak be destroyed or sent to the Wuhan Institute of Virology, a national lab
run by China’s military. This move run by China’s military. This move ~~centralizes~~centralized the government’s knowledge the government’s knowledge
about the potential origins of the virus and about the potential origins of the virus and ~~provides~~provided unique insights about its unique insights about its
trajectory and treatment. trajectory and treatment. ~~117~~that do not have appeared to have been shared outside China.137 In March 2020, the Chinese Academy of Military In March 2020, the Chinese Academy of Military
~~Medical Sciences and CanSino Biologics, Ltd. were the first globally to begin a~~
~~vaccine clinical study.118 The Wuhan Institute of Virology operates China’s only~~
~~biocontainment level 4 (P4) lab, a specialized facility for studies on highly~~
~~contagious and fatal diseases. The Lab was developed by the Merieux~~
~~Foundation under a government agreement between France and China.119~~
~~ In another effort by the Chinese government to control access to important health~~
~~information, the World Health Organization (WHO)’s visit to China came over a~~
~~month after the outbreak of the virus. Only a subset of the WHO-China Joint~~
~~Mission on COVID-19 delegation was allowed to visit Wuhan.120 In July 2020,~~

~~114~~Medical Sciences and 133 Robert D. Atkinson, “China’s Biopharmaceutical Strategy: Challenge or Complement to U.S. Industry Competitiveness?” ITIF, August 12, 2019, https://itif.org/publications/2019/08/12/chinas-biopharmaceutical-strategy-challenge-or-complement-us-industry. 134 Nectar Gan, Caitlin Hu and Ivan Watson, “Beijing Tightens Grip Over Coronavirus Research, Amid U.S.-China Nectar Gan, Caitlin Hu and Ivan Watson, “Beijing Tightens Grip Over Coronavirus Research, Amid U.S.-China
Row on Virus Origin,” CNN, April 16, 2020. Row on Virus Origin,” CNN, April 16, 2020.
~~115~~135 Christopher Bing and Marisa Taylor, “Exclusive: China-Backed Hackers ‘Targeted’ COVID-19 Vaccine From Christopher Bing and Marisa Taylor, “Exclusive: China-Backed Hackers ‘Targeted’ COVID-19 Vaccine From
Moderna,” Moderna,” Reuters, July 30, 2020; and Julian E. Barnes and Michael Venutolo-Mantovani, “Race for Coronavirus , July 30, 2020; and Julian E. Barnes and Michael Venutolo-Mantovani, “Race for Coronavirus
Vaccine Pits Spy Against Spy,” The New York Times, September 5, 2020. Vaccine Pits Spy Against Spy,” The New York Times, September 5, 2020.
~~116~~136 Jia Tianqiong and Denise Jia, “Exclusive: Fosun to Import 7.2 Million Doses of BioN-Tech-Pfizer Vaccine,” Caixin, December 12, 2020, https://www.caixinglobal.com/2020-12-12/exclusive-fosun-to-import-72-million-doses-of-biontech-pfizer-vaccine-101638506.html, and Chao Deng, “China Seeks to Use Access to Covid-19 Vaccines for Diplomacy,” Chao Deng, “China Seeks to Use Access to Covid-19 Vaccines for Diplomacy,” The Wall Street Journal, August , August
17, 2020. 17, 2020.
~~117~~137 Gao Yu, Peng Yanfeng, Yang Rui, Feng Yuding, Ma Danmeng, Flynn Murphy, Han Wei, and Timmy Shen, “In Gao Yu, Peng Yanfeng, Yang Rui, Feng Yuding, Ma Danmeng, Flynn Murphy, Han Wei, and Timmy Shen, “In
Depth: How Early Signs of a SARS-Like Virus Were Spotted, Spread, and Throttled,” Depth: How Early Signs of a SARS-Like Virus Were Spotted, Spread, and Throttled,” Caixin, February 29, 2020, , February 29, 2020,
https://www.caixinglobal.com/2020-02-29/in-depth-how-early-signs-of-a-sars-like-virus-were-spotted-spread-and-https://www.caixinglobal.com/2020-02-29/in-depth-how-early-signs-of-a-sars-like-virus-were-spotted-spread-and-
throttled-101521745.html; and Huang Shulun, Huang Huizhao, Peng Yanfeng, Liu Yuan, and Tang Ziyi, “Destroyed throttled-101521745.html; and Huang Shulun, Huang Huizhao, Peng Yanfeng, Liu Yuan, and Tang Ziyi, “Destroyed
~~Market Samples Make it Impossible to Trace Origin of Deadly Virus, Experts Say,” Caixin, February 8, 2020,~~
~~https://www.caixinglobal.com/2020-02-08/destroyed-market-samples-make-it-impossible-to-trace-origin-of-deadly-~~
~~virus-expert-says-101513162.html.~~
~~118 Ryan Cross, “CanSino Publishes First COVID-19 Vaccine Data to Muted Response,”~~ ~~Chemical and Engineering~~
~~News, May 28, 2020.~~
~~119 “China Inaugurates the First Biocontainment Level 4 Laboratory in Wuhan,” Wuhan Institute of Virology, China~~
~~Academy of Sciences, February 3, 2015, http://english.whiov.cas.cn/News/Events/201502/t20150203_135923.html.~~
~~120 “Report of the WHO-China Joint Mission on Coronavirus 2019 (COVID-19), February 16-24, 2020,~~
~~https://www.who.int/docs/default-source/coronaviruse/who-china-joint-mission-on-covid-19-final-report.pdf.~~
~~Congressional Research Service~~
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~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

Congressional Research Service 43 COVID-19: China Medical Supply Chains and Broader Trade Issues CanSino Biologics, Ltd. were the first globally to begin a vaccine clinical study.138 The Wuhan Institute of Virology operates China’s only biocontainment level 4 (P4) lab, a specialized facility for studies on highly contagious and fatal diseases. The Lab was developed by the Merieux Foundation under a government agreement between France and China.139  In another effort by the Chinese government to control access to important health information, the World Health Organization (WHO)’s initial visit to China came over a month after the outbreak of the virus. Only a subset of the WHO-China Joint Mission on COVID-19 delegation was allowed to visit Wuhan.140 In July 2020, the WHO team tasked with investigating the origins of COVID-19 met with the WHO team tasked with investigating the origins of COVID-19 met with
officials in Beijing to draw up terms of reference and conditions of access with officials in Beijing to draw up terms of reference and conditions of access with
Chinese officialsChinese officials ~~but has not yet traveled to Wuhan.121~~. The WHO’s visit to Wuhan that is scheduled for January 2021 has been criticized in western media as being overly scripted and controlled by the Chinese government.141
 China appears to have been slow to approve foreign drug patents potentially  China appears to have been slow to approve foreign drug patents potentially
relevant to COVID-19 until it needed them at the height of the crisis. For relevant to COVID-19 until it needed them at the height of the crisis. For
example, Gilead Sciences—a U.S. company based in California—had several example, Gilead Sciences—a U.S. company based in California—had several
patents for its antiviral drug Remdesivir’s use in coronaviruses that patents for its antiviral drug Remdesivir’s use in coronaviruses that ~~have~~had been been
pending approval since 2016. The Chinese government pending approval since 2016. The Chinese government ~~has been requiring~~had required the the
company to conduct clinical trials in China and did not approve these patents company to conduct clinical trials in China and did not approve these patents
until well into the crisis. The Chinese government may have benefitted from until well into the crisis. The Chinese government may have benefitted from
~~longstanding~~ long-standing foreign patent application information that becomes public over foreign patent application information that becomes public over
time once a patent application is filed in China, even if the approval is still time once a patent application is filed in China, even if the approval is still
pending. The Chinese government also likely pending. The Chinese government also likely ~~benefits~~benefitted from the insights gained from the insights gained
through the clinical trials conducted in China and the viral samples that foreign through the clinical trials conducted in China and the viral samples that foreign
companies share. Gilead, as well as other U.S. companies, sent the Chinese companies share. Gilead, as well as other U.S. companies, sent the Chinese
government samples of its drugs during the COVID-19 outbreak.government samples of its drugs during the COVID-19 outbreak.~~122~~142 Market Samples Make it Impossible to Trace Origin of Deadly Virus, Experts Say,” Caixin, February 8, 2020, https://www.caixinglobal.com/2020-02-08/destroyed-market-samples-make-it-impossible-to-trace-origin-of-deadly-virus-expert-says-101513162.html. 138 Ryan Cross, “CanSino Publishes First COVID-19 Vaccine Data to Muted Response,” Chemical and Engineering News, May 28, 2020. 139 “China Inaugurates the First Biocontainment Level 4 Laboratory in Wuhan,” Wuhan Institute of Virology, China Academy of Sciences, February 3, 2015, http://english.whiov.cas.cn/News/Events/201502/t20150203_135923.html. 140 “Report of the WHO-China Joint Mission on Coronavirus 2019 (COVID-19), February 16-24, 2020, https://www.who.int/docs/default-source/coronaviruse/who-china-joint-mission-on-covid-19-final-report.pdf. 141 Javier C. Hernadez and Amy Qin, “China Uses WHO Inquiry to Tout Coronavirus Response,” The New York Times, July 22, 2020, and Ian Birrell, “Will We Ever Learn the Truth About China and the Pandemic,” The Daily Mail, December 19, 2020, https://www.dailymail.co.uk/news/article-9071191/Will-learn-truth-China-pandemic-writes-IAN-BIRRELL.html; John Sudworth, “Covid: Wuhan Scientist Would ‘Welcome’ Visit Probing Lab Leak Theory, BBC News, December 20, 2020, https://www.bbc.com/news/world-asia-china-55364445; and Selam Gebrekidan, Matt Apuzzo, Amy Qin, and Javier C. Hernandez, “In Hunt for Virus Source, WHO Let China Take Charge,” The New York Times, November 3, 2020, https://www.nytimes.com/2020/11/02/world/who-china-coronavirus.html. 142 Jay Barmann, “Bay Area-Based Gilead Sees Potential Legal Conflict with China Over its Coronavirus Drug,” SFIST, February 6, 2020, https://sfist.com/2020/02/06/bay-area-based-gilead-donates-experimental-anti-viral-drug-to-china/; and Elise Mak, “Gilead’s Remdesivir Enters China Phase III Trial to Fight Coronavirus,” BioWorld, February 3, 2020, https://www.bioworld.com/articles/432804-gileads-remdesivir-enters-china-phase-iii-trial-to-fight-coronavirus. Congressional Research Service 44 COVID-19: China Medical Supply Chains and Broader Trade Issues
 The Chinese government cracked down on BrightGene BioMedical Technology  The Chinese government cracked down on BrightGene BioMedical Technology
Co.—a PRC firm based in Suzhou, China—for the company’s premature Co.—a PRC firm based in Suzhou, China—for the company’s premature
announcement that it could compound a generic version of Remdesivir. The announcement that it could compound a generic version of Remdesivir. The
government’s move may government’s move may behave been less of an effort to protect foreign firms than to less of an effort to protect foreign firms than to
position China’s national labs. The Wuhan Institute of Virology, for example, position China’s national labs. The Wuhan Institute of Virology, for example, ~~has~~
applied to patent an adaptation of Remdesivir.applied to patent an adaptation of Remdesivir.~~123~~143 This could potentially This could potentially
complicate Gilead’s and other U.S. firms’ way forward in China. complicate Gilead’s and other U.S. firms’ way forward in China.
 China offered significant funding to Chinese biotech, pharmaceutical, and health  China offered significant funding to Chinese biotech, pharmaceutical, and health
logistics companies to expand capacity and capabilities to combat COVID-19. logistics companies to expand capacity and capabilities to combat COVID-19.
For example, Jointown—a top Chinese medical supplier–issued preferential For example, Jointown—a top Chinese medical supplier–issued preferential
bonds in February 2020, and the State Council’s CITIC purchased private bonds in February 2020, and the State Council’s CITIC purchased private
placement shares in the company.placement shares in the company.~~124~~144
As the pandemic control measures As the pandemic control measures ~~continue~~have continued in other countries, PRC official media in other countries, PRC official media ~~is featuring~~
has featured stories about how China’s leadership stories about how China’s leadership ishas been using its current control of medical production and supply using its current control of medical production and supply
chains to selectively help other countries, while promoting ties to China. State media chains to selectively help other countries, while promoting ties to China. State media ~~is also~~
also has been highlighting China’s interest in advancing its global medical leadership role. China’s global highlighting China’s interest in advancing its global medical leadership role. China’s global
health leadership was a key element of people-to-people exchanges envisioned in China’s initial health leadership was a key element of people-to-people exchanges envisioned in China’s initial
rollout of its “One Belt One Road” initiative in 2015.rollout of its “One Belt One Road” initiative in 2015.~~125~~145 During a call During a call to Italian Prime Minister Conte on March 17, 2020, Chinese Communist Party Chairman Xi Jinping referenced a new Chinese government initiative—a Health Silk Road—that appears designed to promote Chinese leadership and products in the health sector.146 Such efforts also aim to deflect criticism of China’s alleged corralling and destruction of the initial virus samples and efforts to prevent sharing of information among medical practitioners and the global community. Some experts have highlighted how this suppression of health information violates the obligations of WHO members to immediately share information about outbreaks for the safety of the world.147 The Chinese government reportedly undertook extraordinary measures during the COVID-19 outbreak to sustain R&D and manufacturing for priority national projects and in strategic sectors—such as telecommunications, microelectronics, and semiconductors—including in Wuhan, the epicenter of China’s outbreak. These efforts have potential ramifications for U.S. and foreign firms’ relative competitive market position as companies compete in 5G and other emerging sectors. According to the Nikkei Asia Review, in February and March 2020, the Chinese government operated special transportation and quarantined dormitories at Yangtze Memory 143~~to Italian Prime Minister~~

~~121 Javier C. Hernadez and Amy Qin, “China Uses WHO Inquiry to Tout Coronavirus Response,” The New York Times,~~
~~July 22, 2020.~~
~~122 Jay Barmann, “Bay Area-Based Gilead Sees Potential Legal Conflict with China Over its Coronavirus Drug,”~~
~~SFIST, February 6, 2020, https://sfist.com/2020/02/06/bay-area-based-gilead-donates-experimental-anti-viral-drug-to-~~
~~china/; and Elise Mak, “Gilead’s Remdesivir Enters China Phase III Trial to Fight Coronavirus,” BioWorld, February~~
~~3, 2020, https://www.bioworld.com/articles/432804-gileads-remdesivir-enters-china-phase-iii-trial-to-fight-~~
~~coronavirus.~~
~~123~~ “Chinese Biotech Censured for False Claim on Gilead’s Virus Drug,” Bloomberg News, March 1, 2020, “Chinese Biotech Censured for False Claim on Gilead’s Virus Drug,” Bloomberg News, March 1, 2020,
https://www.bloomberg.com/news/articles/2020-03-02/chinese-biotech-censured-for-false-claim-on-gilead-s-virus-https://www.bloomberg.com/news/articles/2020-03-02/chinese-biotech-censured-for-false-claim-on-gilead-s-virus-
drug; and Joe McDonald and Linda A. Johnson, “Chinese Scientists Ask for Patent on U.S. Drug to Fight Virus,” drug; and Joe McDonald and Linda A. Johnson, “Chinese Scientists Ask for Patent on U.S. Drug to Fight Virus,”
Associated Press, February 6, 2020, https://apnews.com/1fe943717b56b56cce5e733790f016dd. , February 6, 2020, https://apnews.com/1fe943717b56b56cce5e733790f016dd.
~~124~~144 Reuters, “Jointown Pharmaceutical To Issue Up To 1.5 Bln Yuan Worth of Renewable Bonds,” March 4, 2020. Reuters, “Jointown Pharmaceutical To Issue Up To 1.5 Bln Yuan Worth of Renewable Bonds,” March 4, 2020.
~~125~~145 “Vision and Actions on Jointly Building the Silk Road Economic Belt and 21stCentury Maritime Silk Road,” “Vision and Actions on Jointly Building the Silk Road Economic Belt and 21stCentury Maritime Silk Road,”
National Development and Reform Commission, Ministry of Foreign Affairs, and the Ministry of Commerce, March National Development and Reform Commission, Ministry of Foreign Affairs, and the Ministry of Commerce, March
~~Congressional Research Service~~
40

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~Conte on March 17, 2020, Chinese Communist Party Chairman Xi Jinping referenced a new~~
~~Chinese government initiative—a Health Silk Road—that appears designed to promote Chinese~~
~~leadership and products in the health sector.126 Such efforts also aim to deflect criticism of~~
~~China’s alleged corralling and destruction of the initial virus samples and efforts to prevent~~
~~sharing of information among medical practitioners and the global community. Some experts~~
~~have highlighted how this suppression of health information violates the obligations of WHO~~
~~members to immediately share information about outbreaks for the safety of the world.127~~
~~The Chinese government reportedly undertook extraordinary measures during the COVID-19~~
~~outbreak to sustain R&D and manufacturing for priority national projects and in strategic~~
~~sectors—such as telecommunications, microelectronics, and semiconductors—including in~~
~~Wuhan, the epicenter of China’s outbreak. These efforts have potential ramifications for U.S. and~~
~~foreign firms’ relative competitive market position as companies compete in 5G and other~~
~~emerging sectors. This is particularly the case if their China operations were closed or are now~~
~~significantly curtailed in the United States and other markets. According to the~~ ~~Nikkei Asia~~
~~Review, in February and March 2020, the Chinese government operated special transportation and~~
~~quarantined dormitories at Yangtze Memory~~ 28, 2015, https://reconasia-production.s3.amazonaws.com/media/filer_public/e0/22/e0228017-7463-46fc-9094-0465a6f1ca23/vision_and_actions_on_jointly_building_silk_road_economic_belt_and_21st-century_maritime_silk_road.pdf. 146 Li Yan, “Xi Says China to Send More Medical Experts to Italy,” Xinhua, March 17, 2020, http://www.ecns.cn/m/news/politics/2020-03-17/detail-ifzunmih1236562.shtml. 147 James Kraska, “China is Legally Responsible for COVID-19 Damage and Claims Could be in the Trillions,” War on the Rocks, March 23, 2020, https://warontherocks.com/2020/03/china-is-legally-responsible-for-covid-19-damage-and-claims-could-be-in-the-trillions/. Congressional Research Service 45 COVID-19: China Medical Supply Chains and Broader Trade Issues Technology, Co., Ltd. (YMTC), China’s national Technology, Co., Ltd. (YMTC), China’s national
champion to develop memory chips. YMTC is located in eastern Wuhan. The government saw champion to develop memory chips. YMTC is located in eastern Wuhan. The government saw
continued operations as an issue of national security and issued special local and central continued operations as an issue of national security and issued special local and central
government dispensation to keep the facility operational amidst the outbreak.government dispensation to keep the facility operational amidst the outbreak.~~128~~148 Separate reports Separate reports
indicate that HiSilicon—the semiconductor subsidiary of China’s leading telecommunications indicate that HiSilicon—the semiconductor subsidiary of China’s leading telecommunications
equipment company Huawei—also sustained operations during the outbreak.equipment company Huawei—also sustained operations during the outbreak.~~129~~149
Issues for Congress
Congress faces choices Congress faces choices ~~in the near-term~~ that will affect not only the that will affect not only the ~~immediate~~current situation, but also situation, but also
the longer-range U.S. trade and economic trajectory vis-a-vis China, with a potentially significant the longer-range U.S. trade and economic trajectory vis-a-vis China, with a potentially significant
impact on the global economy as well. The outbreak of COVID-19 impact on the global economy as well. The outbreak of COVID-19 ~~has~~ prompted a sharp collapse prompted a sharp collapse
of transportation, services, and manufacturing production—including supply shortages of of transportation, services, and manufacturing production—including supply shortages of
essential medical and health care products needed to contain COVID-19. The COVID-19 essential medical and health care products needed to contain COVID-19. The COVID-19
pandemic pandemic ~~has~~ also precipitated a sharp downturn in also precipitated a sharp downturn in ~~consumer demand, first in China and now~~
~~globally~~global demand. Questions already brewing since the imposition of U.S. Section 301 tariffs . Questions already brewing since the imposition of U.S. Section 301 tariffs ~~are~~
have been intensifying congressional concerns and debates about potential short-term and long-term steps to intensifying congressional concerns and debates about potential short-term and long-term steps to
address U.S. supply chain dependence on China for critical products, and the potential address U.S. supply chain dependence on China for critical products, and the potential
ramifications of these dependencies. These ramifications could be particularly marked in times of ramifications of these dependencies. These ramifications could be particularly marked in times of
crisis or of PRC nationalization of industry. At the same time, crisis or of PRC nationalization of industry. At the same time, some U.S. companies and Members of Congress have been~~some U.S. companies and~~

~~28, 2015, https://reconasia-production.s3.amazonaws.com/media/filer_public/e0/22/e0228017-7463-46fc-9094-~~
~~0465a6f1ca23/vision_and_actions_on_jointly_building_silk_road_economic_belt_and_21st-~~
~~century_maritime_silk_road.pdf.~~
~~126 Li Yan, “Xi Says China to Send More Medical Experts to Italy,” Xinhua, March 17, 2020,~~
~~http://www.ecns.cn/m/news/politics/2020-03-17/detail-ifzunmih1236562.shtml.~~
~~127 James Kraska, “China is Legally Responsible for COVID-19 Damage and Claims Could be in the Trillions,” War on~~
~~the Rocks, March 23, 2020, https://warontherocks.com/2020/03/china-is-legally-responsible-for-covid-19-damage-and-~~
~~claims-could-be-in-the-trillions/.~~
~~128 Cheng Ting-Fang and Lauly Li, “China Lets Wuhan Tech Plants Bypass Lockdown to Stay Open,” Nikkei Asian~~
~~Review, March 4, 2020, https://asia.nikkei.com/Spotlight/Coronavirus/China-lets-Wuhan-tech-plants-bypass-~~
~~lockdown-to-stay-open.~~
~~129 “Huawei, Chinese Chip Makers Keep Factories Humming, Despite the Virus,” Reuters, February 2, 2020,~~
~~https://www.reuters.com/article/us-china-health-tech-huawei/huawei-chinese-chip-makers-keep-factories-humming-~~
~~despite-virus-outbreak-idUSKBN1ZX0CX.~~
~~Congressional Research Service~~
41

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~Members of Congress are~~ calling for lowering tariffs on goods from China. The urgent need for calling for lowering tariffs on goods from China. The urgent need for
pharmaceutical and medical supplies pharmaceutical and medical supplies ~~is fueling~~fueled systemic market pressures to increase U.S. systemic market pressures to increase U.S.
reliance on China trade because China is an important source of many of these critical inputs and reliance on China trade because China is an important source of many of these critical inputs and
products. Whether and on what terms the Chinese government might be willing to export medical products. Whether and on what terms the Chinese government might be willing to export medical
supplies to the United States remains uncertain. supplies to the United States remains uncertain.
Dependency of U.S. Health Care Supply Chains on China
The experience of shortages of critical medical supplies in the United States The experience of shortages of critical medical supplies in the United States ~~has~~ exposed exposed ~~current~~
U.S. health care dependencies on China. As China positions its industries to realize its MIC 2025 U.S. health care dependencies on China. As China positions its industries to realize its MIC 2025
goals in biotechnology, pharmaceuticals, and medical equipment, the Chinese government is goals in biotechnology, pharmaceuticals, and medical equipment, the Chinese government is
pursuing industrial polices to advance into higher positions in the global industrial value chain, pursuing industrial polices to advance into higher positions in the global industrial value chain,
raising questions about what this might portend for U.S. reliance on China as an increasingly raising questions about what this might portend for U.S. reliance on China as an increasingly
competitive supplier. competitive supplier.
As China’s manufacturing capacity As China’s manufacturing capacity ~~comes~~has come back online while the United States and other major back online while the United States and other major
global markets continue to grapple with COVID-19, the Chinese government appears to global markets continue to grapple with COVID-19, the Chinese government appears to behave
selectively selectively ~~releasing some~~released medical supplies for overseas delivery. China appears to medical supplies for overseas delivery. China appears to ~~be selecting~~have selectively
designated countries, at least to some extent (although the precise degree cannot be determined), designated countries, at least to some extent (although the precise degree cannot be determined),
according to political calculations and according to political calculations and ~~has been playing~~played up its role in Chinese state propaganda, as up its role in Chinese state propaganda, as
evidenced with China’s deliveries to Italy and Serbia.evidenced with China’s deliveries to Italy and Serbia.~~130~~150 Most foreign governments appear to Most foreign governments appear to be
~~paying for these supplies although a small subset of packages may be aid. There are also reports~~
~~by other countries that some of China’s medical supplies and testing kits are faulty.131 In a sign~~
~~that China might be using~~ 148 Cheng Ting-Fang and Lauly Li, “China Lets Wuhan Tech Plants Bypass Lockdown to Stay Open,” Nikkei Asian Review, March 4, 2020, https://asia.nikkei.com/Spotlight/Coronavirus/China-lets-Wuhan-tech-plants-bypass-lockdown-to-stay-open. 149 “Huawei, Chinese Chip Makers Keep Factories Humming, Despite the Virus,” Reuters, February 2, 2020, https://www.reuters.com/article/us-china-health-tech-huawei/huawei-chinese-chip-makers-keep-factories-humming-despite-virus-outbreak-idUSKBN1ZX0CX. 150 Li Yan, “Xi Says China to Send More Medical Experts to Italy,” Xinhua, March 17, 2020, http://www.ecns.cn/m/news/politics/2020-03-17/detail-ifzunmih1236562.shtml934157.shtml; Reuters, China sends Serbia help to halt coronavirus spreading,” March 21, 2020. Congressional Research Service 46 COVID-19: China Medical Supply Chains and Broader Trade Issues have paid for these supplies although a small subset of packages may have been aid. There also have been reports by other countries that some of China’s medical supplies and testing kits were faulty.151 In a sign that China might have used the crisis to push substandard products or gain market share in the crisis to push substandard products or gain market share in
developed markets over traditional U.S. suppliers based in China that produce for export, PRC developed markets over traditional U.S. suppliers based in China that produce for export, PRC
state propaganda blamed shortages in March 2020 on alleged FDA failures to certify Chinese state propaganda blamed shortages in March 2020 on alleged FDA failures to certify Chinese
products for import.products for import.~~132~~152 This raises the question of why products made by U.S. firms in China that This raises the question of why products made by U.S. firms in China that
are already FDA certified were not first in line for export to the United States given that these are already FDA certified were not first in line for export to the United States given that these
firms also expanded capacity during the crisis in China. Several prominent U.S. companies, firms also expanded capacity during the crisis in China. Several prominent U.S. companies,
including 3M, indicated in the early stages of the United States’ COVID-19 outbreak that they did including 3M, indicated in the early stages of the United States’ COVID-19 outbreak that they did
not have PRC government authorization to export.not have PRC government authorization to export.~~133~~153
In this environment, Congress faces choices about how best to incentivize production of health In this environment, Congress faces choices about how best to incentivize production of health
supplies in the United States, potentially in collaboration with other countries, to counter COVID-supplies in the United States, potentially in collaboration with other countries, to counter COVID-
19 and future pandemics, and/or whether to impose any conditions on this production. In addition 19 and future pandemics, and/or whether to impose any conditions on this production. In addition
to a focus on lower-value items such as PPE, Congress might focus on ways to sustain U.S. to a focus on lower-value items such as PPE, Congress might focus on ways to sustain U.S.
industrial leadership in advanced medical equipment and pharmaceutical innovation. With an eye industrial leadership in advanced medical equipment and pharmaceutical innovation. With an eye
to China’s industrial policies, Congress may also consider the potential longer-term advantages to China’s industrial policies, Congress may also consider the potential longer-term advantages
and disadvantages of diversifying U.S. supply and on-shoring of certain capabilities. Congress and disadvantages of diversifying U.S. supply and on-shoring of certain capabilities. Congress

~~130 Li Yan, “Xi Says China to Send More Medical Experts to Italy,” Xinhua, March 17, 2020,~~
~~http://www.ecns.cn/m/news/politics/2020-03-17/detail-ifzunmih1236562.shtml934157.shtml; Reuters, China sends~~
~~Serbia help to halt coronavirus spreading,” March 21, 2020.~~
~~131 Wendy Wu, “Coronavirus: Don’t Politicize Medical Supply Problems, China Says,” South China Morning Post,~~
~~March 30, 2020, https://www.scmp.com/news/china/diplomacy/article/3077537/coronavirus-chinas-ambassador-~~
~~closely-following-netherlands.~~
~~132 “Barriers Should be Removed to Send Medical Supplies to US,” Global Times, March 24, 2020,~~
~~https://www.globaltimes.cn/content/1183647.shtml.~~
~~133 Keith Bradsher and Liz Alderman, “The World Needs Masks. China Makes Them—But Has Been Hoarding~~
~~Them,” The New York Times, March 16, 2020, https://www.nytimes.com/2020/03/13/business/masks-china-~~
~~coronavirus.html.~~
~~Congressional Research Service~~
42

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

may also want to consider potential collaboration with like-minded countries, and ways to counter may also want to consider potential collaboration with like-minded countries, and ways to counter
the effects on lesser-developed economies that could be hit particularly hard by the effects on lesser-developed economies that could be hit particularly hard by the COVID-19COVID-19. pandemic. China China
is likely to seek to retain the medical market share and edge it gains through is likely to seek to retain the medical market share and edge it gains through the COVID-19COVID-19 pandemic, ,
particularly as these gains help advance China’s MIC 2025 industrial policy goals in particularly as these gains help advance China’s MIC 2025 industrial policy goals in
biotechnology, pharmaceuticals, and medical equipment. At the same time, the United States and biotechnology, pharmaceuticals, and medical equipment. At the same time, the United States and
other countries may seek to diversify away from China because of vulnerabilities highlighted other countries may seek to diversify away from China because of vulnerabilities highlighted
during the outbreak. Nascent proposals to diversify away from China concerns and risks—such as during the outbreak. Nascent proposals to diversify away from China concerns and risks—such as
UK Prime Minister Boris Johnson’s suggestion of a D-10 alliance and the U.S. government’s UK Prime Minister Boris Johnson’s suggestion of a D-10 alliance and the U.S. government’s
Clean Network strategy—advocate for closer trading ties among like-minded countries in Clean Network strategy—advocate for closer trading ties among like-minded countries in
sensitive technologies and sectors.sensitive technologies and sectors.~~134~~154
Recent legislative action related to these issues Recent legislative action related to these issues ~~includes~~in the 116th Congress includes the following: :
 P.L. 116-136, The Coronavirus Aid, Relief, and Economic Security (CARES) Act  P.L. 116-136, The Coronavirus Aid, Relief, and Economic Security (CARES) Act
includes several provisions that expand drug shortage reporting requirements to includes several provisions that expand drug shortage reporting requirements to
include APIs and medical devices. The bill also requires certain drug include APIs and medical devices. The bill also requires certain drug
manufacturers to draw up risk management plans and requires the FDA to manufacturers to draw up risk management plans and requires the FDA to
maintain a public list of medical devices that are determined to be in shortage. maintain a public list of medical devices that are determined to be in shortage.
Additionally, the bill directs the National Academies of Science, Engineering, Additionally, the bill directs the National Academies of Science, Engineering,
and Medicine to conduct a study of pharmaceutical supply chain security. The and Medicine to conduct a study of pharmaceutical supply chain security. The
CARES Act also waives certain congressional oversight and reporting CARES Act also waives certain congressional oversight and reporting
requirements under the Defense Production Act of 1950’s (DPA; 50 U.S.C. requirements under the Defense Production Act of 1950’s (DPA; 50 U.S.C.
~~§§4501 et seq.) Title III Expansion of Productive Capacity and Supply, which~~
~~governs purchases and loans made by the federal government to expand~~
~~productive capacity in promotion of national defense, broadly defined.~~
~~ H.R. 8406, The Heroes Act, would introduce additional reporting requirements~~
~~for drug manufacturers that obligate them to report drugs that are vulnerable to~~
~~supply chain risks that could lead to shortages, and would introduce new~~
~~penalties for failing to report. The bill would also introduce measures to~~
~~strengthen U.S. competitiveness in advanced pharmaceutical manufacturing by~~
~~enhancing the advanced manufacturing programs of the FDA and creating a new~~
~~supply chain flexibility manufacturing pilot program. The bill would also~~
~~encourage more research into ways to enhance domestic production of critical~~
~~APIs and certain finished dosage drugs by designating certain research~~
~~universities as “National Centers of Excellence in Continuous Pharmaceutical~~
~~Manufacturing.” The Heroes Act was originally introduced as H.R. 6800 and was~~
~~passed by the House on May 15, 2020; an updated version of the bill (H.R. 8406)~~
~~was introduced on September 29, 2020.~~
~~ S. 4049, The National Defense Authorization Act for Fiscal Year 2021 as passed~~
~~by the Senate, contains a provision directing the Office of the Director of~~
~~National Intelligence (ODNI) to submit a report to Congress assessing, among~~
~~other risks, the risk of the Chinese government restricting or manipulating global~~
~~medical and pharmaceutical supply chains to advance economic and political~~
~~objectives. H.R. 6395, the National Defense Authorization Act for Fiscal Year~~
~~2021 as passed by the House, contains a provision tasking HHS with preparing a~~
~~report that contains a list of the drugs and vaccines on the joint deployment~~
~~formulary, identifies each drugs APIs and country of origin, and provides an~~

~~134 Lucy Fisher, “Downing Street Plans New 5G Club of Democracies,” The Times, May 29, 2020 and Aaron~~
~~Friedburg, “The United States Needs to Reshape Global Supply Chains,” Foreign Policy, May 8, 2020, and “The Clean~~
~~Network Safeguards America’s Assets,” U.S. Department of State Fact Sheet, August 11, 2020.~~
~~Congressional Research Service~~
43

~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

~~additional list of drug manufacturers in the United States owned in whole or in~~
~~part by a foreign entity~~ 151 Wendy Wu, “Coronavirus: Don’t Politicize Medical Supply Problems, China Says,” South China Morning Post, March 30, 2020, https://www.scmp.com/news/china/diplomacy/article/3077537/coronavirus-chinas-ambassador-closely-following-netherlands. 152 “Barriers Should be Removed to Send Medical Supplies to US,” Global Times, March 24, 2020, https://www.globaltimes.cn/content/1183647.shtml. 153 Keith Bradsher and Liz Alderman, “The World Needs Masks. China Makes Them—But Has Been Hoarding Them,” The New York Times, March 16, 2020, https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html. 154 Lucy Fisher, “Downing Street Plans New 5G Club of Democracies,” The Times, May 29, 2020 and Aaron Friedburg, “The United States Needs to Reshape Global Supply Chains,” Foreign Policy, May 8, 2020, and “The Clean Network Safeguards America’s Assets,” U.S. Department of State Fact Sheet, August 11, 2020. Congressional Research Service 47 COVID-19: China Medical Supply Chains and Broader Trade Issues §§4501 et seq.) Title III Expansion of Productive Capacity and Supply, which governs purchases and loans made by the federal government to expand productive capacity in promotion of national defense, broadly defined.  H.R. 8406, The Heroes Act, would introduce additional reporting requirements for drug manufacturers that obligate them to report drugs that are vulnerable to supply chain risks that could lead to shortages, and would introduce new penalties for failing to report. The bill would also introduce measures to strengthen U.S. competitiveness in advanced pharmaceutical manufacturing by enhancing the advanced manufacturing programs of the FDA and creating a new supply chain flexibility manufacturing pilot program. The bill would also encourage more research into ways to enhance domestic production of critical APIs and certain finished dosage drugs by designating certain research universities as “National Centers of Excellence in Continuous Pharmaceutical Manufacturing.” The Heroes Act was originally introduced as H.R. 6800 and was passed by the House on May 15, 2020; an updated version of the bill (H.R. 8406) was introduced on September 29, 2020. .
 H.R. 7856, The Intelligence Authorization Act for Fiscal Year 2021, would also  H.R. 7856, The Intelligence Authorization Act for Fiscal Year 2021, would also
require ODNI to submit an additional report detailing China’s regulatory require ODNI to submit an additional report detailing China’s regulatory
practices governing pharmaceutical and PPE manufacturing, as well as an practices governing pharmaceutical and PPE manufacturing, as well as an
estimate of the total percentage of APIs produced globally that originate in estimate of the total percentage of APIs produced globally that originate in
China. China.
 S. 4324, The Restoring Critical Supply Chains and Intellectual Property Act,  S. 4324, The Restoring Critical Supply Chains and Intellectual Property Act,
contains multiple provisions that aim to re-shore supply chains across a range of contains multiple provisions that aim to re-shore supply chains across a range of
sectors critical to public health and national security. Measures in the bill include sectors critical to public health and national security. Measures in the bill include
a 30% investment tax credit for qualified manufacturers of medical PPE, stricter a 30% investment tax credit for qualified manufacturers of medical PPE, stricter
domestic purchasing requirements for the Strategic National Stockpile domestic purchasing requirements for the Strategic National Stockpile
maintained by HHS, a new grant program to incentivize U.S. domestic maintained by HHS, a new grant program to incentivize U.S. domestic
production of advanced semiconductor chips, and funding for a new program to production of advanced semiconductor chips, and funding for a new program to
identify critical mineral supplies and address gaps in critical mineral supply identify critical mineral supplies and address gaps in critical mineral supply
chains. chains.
 S. 3538 and H.R. 6393, The Strengthening America  S. 3538 and H.R. 6393, The Strengthening America'’s Supply Chain and National s Supply Chain and National
Security Act, would require companies to report on the sources of their APIs and Security Act, would require companies to report on the sources of their APIs and
would tighten laws encouraging the U.S. Department of Veterans Affairs to buy would tighten laws encouraging the U.S. Department of Veterans Affairs to buy
American pharmaceuticals. The bill calls for federal financing guarantees to U.S. American pharmaceuticals. The bill calls for federal financing guarantees to U.S.
medical supply companies with production in the United States and would medical supply companies with production in the United States and would
increase the tax deduction temporarily for businesses investing in medical increase the tax deduction temporarily for businesses investing in medical
equipment and facilities related to COVID-19. equipment and facilities related to COVID-19.
 S. 3343 and H.R. 6049, The Medical Supply Chain Security Act, calls for  S. 3343 and H.R. 6049, The Medical Supply Chain Security Act, calls for
enhanced security of the medical supply chain and enhanced FDA authority to enhanced security of the medical supply chain and enhanced FDA authority to
request information about the sources of drugs and medical devices. It would request information about the sources of drugs and medical devices. It would
require medical device manufacturers to report expected shortages to the FDA. require medical device manufacturers to report expected shortages to the FDA.
 S. 3635 and H.R. 6482, The Protecting Our Pharmaceutical Supply Chain from  S. 3635 and H.R. 6482, The Protecting Our Pharmaceutical Supply Chain from
China Act of 2020, would require the FDA to establish a registry to track APIs China Act of 2020, would require the FDA to establish a registry to track APIs
and institute a country-of-origin label for imported drugs. The bill would provide and institute a country-of-origin label for imported drugs. The bill would provide
economic incentives for producing pharmaceuticals and medical equipment in economic incentives for producing pharmaceuticals and medical equipment in
the United States. The bill also would prohibit federal agencies and health the United States. The bill also would prohibit federal agencies and health
Congressional Research Service 48 COVID-19: China Medical Supply Chains and Broader Trade Issues facilities from purchasing APIs and other pharmaceutical products manufactured facilities from purchasing APIs and other pharmaceutical products manufactured
in China without an FDA waiver certifying that China is the sole source.in China without an FDA waiver certifying that China is the sole source.~~135~~155
 H.R. 6731, The Securing America’s Pharmaceutical Supply Chain Act, would  H.R. 6731, The Securing America’s Pharmaceutical Supply Chain Act, would
require executive agencies to restrict purchases of pharmaceuticals to drugs “over require executive agencies to restrict purchases of pharmaceuticals to drugs “over
50 percent sourced, manufactured, and assembled in the United States.” The bill 50 percent sourced, manufactured, and assembled in the United States.” The bill
would also direct USTR to modify U.S. product coverage under all free trade would also direct USTR to modify U.S. product coverage under all free trade
agreements and the WTO Government Procurement Agreement (GPA) to exclude agreements and the WTO Government Procurement Agreement (GPA) to exclude
coverage of essential medicines and certain medical products. coverage of essential medicines and certain medical products.
 H.R. 5982, The Safe Medicine Act, would direct HHS to assess vulnerabilities in  H.R. 5982, The Safe Medicine Act, would direct HHS to assess vulnerabilities in
the U.S. pharmaceutical supply chain by issuing a report that examines U.S. the U.S. pharmaceutical supply chain by issuing a report that examines U.S.
dependence on China for critical APIs and gaps in domestic pharmaceutical dependence on China for critical APIs and gaps in domestic pharmaceutical
manufacturing capabilities. manufacturing capabilities.

~~135 An earlier version of S. 3635 was introduced in the 116th Congress as S. 3537.~~
~~Congressional Research Service~~
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~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

 H.R. 6386, The No Chinese Handouts In National Assistance (CHINA) Act,  H.R. 6386, The No Chinese Handouts In National Assistance (CHINA) Act,
would prohibit any funds made available in would prohibit any funds made available in ~~Appropriations~~appropriations acts for FY2020 from acts for FY2020 from
being used to compensate any individual or business controlled by the Chinese being used to compensate any individual or business controlled by the Chinese
government. The government. The ~~Act~~act adopts the definition of government control established in adopts the definition of government control established in
Section 721(a) of the Defense Production Act of 1950 (50 U.S.C. §4565(a)). Section 721(a) of the Defense Production Act of 1950 (50 U.S.C. §4565(a)).
 H.R. 4710, The Pharmaceutical Independence Long-Term Readiness Reform Act,  H.R. 4710, The Pharmaceutical Independence Long-Term Readiness Reform Act,
would direct the Department of Defense to include a section in each national would direct the Department of Defense to include a section in each national
defense strategy that outlines steps to address gaps in the U.S. pharmaceutical defense strategy that outlines steps to address gaps in the U.S. pharmaceutical
manufacturing base and strengthen pharmaceutical supply chains with single manufacturing base and strengthen pharmaceutical supply chains with single
points of failure. points of failure.
Several Members of Congress also have introduced bills to amend certain provisions under the Several Members of Congress also have introduced bills to amend certain provisions under the
Defense Production Act of 1950 (DPA; 50 U.S.C. §§4501 et seq.) and ease its implementation. S. Defense Production Act of 1950 (DPA; 50 U.S.C. §§4501 et seq.) and ease its implementation. S.
4050, the Public Health Emergency Production Act of 2020 (PHEPA) would create an office in 4050, the Public Health Emergency Production Act of 2020 (PHEPA) would create an office in
HHS with responsibility for a variety of DPA responsibilities, including a freestanding DPA Title HHS with responsibility for a variety of DPA responsibilities, including a freestanding DPA Title
III office, which would be led by an official at the rank of Deputy Assistant Secretary. Some III office, which would be led by an official at the rank of Deputy Assistant Secretary. Some
Members have also introduced several resolutions in the House and Senate that call on the Members have also introduced several resolutions in the House and Senate that call on the
President to use DPA authorities to facilitate the production of medical supplies. H.R. 6395, the President to use DPA authorities to facilitate the production of medical supplies. H.R. 6395, the
National Defense Authorization Act for Fiscal Year 2021 as passed by the House, for example, National Defense Authorization Act for Fiscal Year 2021 as passed by the House, for example,
contains provisions that would expand the definition of health resources critical to national contains provisions that would expand the definition of health resources critical to national
security to include PPE and COVID-19 testing equipment. S. 4339 and H.R. 7836, the Masks for security to include PPE and COVID-19 testing equipment. S. 4339 and H.R. 7836, the Masks for
All Act of 2020, would direct FEMA to, among other things, use the DPA to provide for the All Act of 2020, would direct FEMA to, among other things, use the DPA to provide for the
manufacture and distribution of face masks for every individual in the United States in response manufacture and distribution of face masks for every individual in the United States in response
to the COVID-19 pandemic. Despite recent legislation to spur PPE production and concerns by to the COVID-19 pandemic. Despite recent legislation to spur PPE production and concerns by
expressed by expressed by some Members of Congress over the supply of available PPE, the Members of Congress over the supply of available PPE, the Trump Administration has not Administration has not
consistently used DPA authorities to expedite PPE contracts.consistently used DPA authorities to expedite PPE contracts.~~136~~156 In an effort to address the In an effort to address the
ambiguity of the Administration’s response, several Members of Congress have introduced ambiguity of the Administration’s response, several Members of Congress have introduced
legislation such as H.R. 6390 and S. 3568 that would require the President to use authorities legislation such as H.R. 6390 and S. 3568 that would require the President to use authorities
under the DPA to require emergency production of medical equipment to respond to the COVID-under the DPA to require emergency production of medical equipment to respond to the COVID-
~~19 outbreak.~~
~~In addition to recent~~ 19 outbreak. 155 An earlier version of S. 3635 was introduced in the 116th Congress as S. 3537. 156 For recent developments in the use of DPA to procure medical supplies, see CRS Insight IN11470, Defense Production Act (DPA): Recent Developments in Response to COVID-19, by Michael H. Cecire and Heidi M. Peters; for an in-depth discussion of DPA history and authorities, see CRS Report R43767, The Defense Production Act of 1950: History, Authorities, and Considerations for Congress, by Michael H. Cecire and Heidi M. Peters. Congressional Research Service 49 COVID-19: China Medical Supply Chains and Broader Trade Issues In addition to legislation introduced by Members of Congress, the Trump Administration legislation introduced by Members of Congress, the Trump Administration
drafted an Executive Order in mid-March 2020 that seeks to increase U.S. production capacity drafted an Executive Order in mid-March 2020 that seeks to increase U.S. production capacity
while eliminating loopholes that have allowed the U.S. government to buy pharmaceuticals, PPE, while eliminating loopholes that have allowed the U.S. government to buy pharmaceuticals, PPE,
and ventilators from overseas.and ventilators from overseas. ~~137~~157 Released on August 6, 2020, this Executive Order 13944 Released on August 6, 2020, this Executive Order 13944
mandates that federal agencies “conduct the procurement of Essential Medicines, Medical mandates that federal agencies “conduct the procurement of Essential Medicines, Medical
Countermeasures, and Critical Inputs by: using procedures to limit competition to only those Countermeasures, and Critical Inputs by: using procedures to limit competition to only those
Essential Medicines, Medical Countermeasures, and Critical Inputs that are produced in the Essential Medicines, Medical Countermeasures, and Critical Inputs that are produced in the
United States; and dividing procurement requirements among two or more manufacturers located United States; and dividing procurement requirements among two or more manufacturers located
in the United States, as appropriate.in the United States, as appropriate."” Additionally, the order requires USTR to “take all Additionally, the order requires USTR to “take all
appropriate action to modify United States federal procurement product coverage” under the appropriate action to modify United States federal procurement product coverage” under the
WTO Agreement on Government Procurement and other relevant trade agreements. The WTO Agreement on Government Procurement and other relevant trade agreements. The
Executive Order also calls for the HHS Secretary to identify U.S. supply chain vulnerabilities for Executive Order also calls for the HHS Secretary to identify U.S. supply chain vulnerabilities for
essential medicines, medical capabilities, and critical inputs within 180 days of the issuance of the essential medicines, medical capabilities, and critical inputs within 180 days of the issuance of the

~~136 For recent developments in the use of DPA to procure medical supplies, see CRS Insight IN11470,~~ ~~Defense~~
~~Production Act (DPA): Recent Developments in Response to COVID-19, by Michael H. Cecire and Heidi M. Peters; for~~
~~an in-depth discussion of DPA history and authorities, see CRS Report R43767,~~ ~~The Defense Production Act of 1950:~~
~~History, Authorities, and Considerations for Congress, by Michael H. Cecire and Heidi M. Peters.~~
~~137 “White House Working on Order to Cut U.S. Dependency on Foreign Medicines,” Reuters, March 16, 2020.~~
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~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

Executive Order. HHS is called to streamline requirements and accelerate certain applications. Executive Order. HHS is called to streamline requirements and accelerate certain applications.
The Executive Order also calls for federal agencies to provide detailed procurement details for the The Executive Order also calls for federal agencies to provide detailed procurement details for the
prior three years by no later than December 31, 2021, and annually thereafter.prior three years by no later than December 31, 2021, and annually thereafter.~~138~~158 The The
Administration also took steps to increase funding for U.S. API production capacity for critical Administration also took steps to increase funding for U.S. API production capacity for critical
medicines. These steps included awarding a $354 million contract to a corporation in Richmond, medicines. These steps included awarding a $354 million contract to a corporation in Richmond,
Virginia, and a $765 million loan to Eastman Kodak to develop API production capacity.Virginia, and a $765 million loan to Eastman Kodak to develop API production capacity.~~139~~159
Other U.S. Supply Chain Dependencies
The COVID-19 COVID-19 ~~provides~~pandemic has provided a direct learning experience about the a direct learning experience about the ~~direct~~ effects and costs of a serious effects and costs of a serious
disruption or cutoff of critical supplies from China to the United States. Key broader questions disruption or cutoff of critical supplies from China to the United States. Key broader questions
facing the United States that have serious implications for future economic and trade relations facing the United States that have serious implications for future economic and trade relations
~~include:~~include
 What are the consequences for U.S. interests when China nationalizes production  What are the consequences for U.S. interests when China nationalizes production
and distribution and hardens its borders as it did during the COVID-19 crisis? and distribution and hardens its borders as it did during the COVID-19 crisis?
 What happens if Chinese government planners corner global supply alternatives?  What happens if Chinese government planners corner global supply alternatives?
 What happens if the United States hardens its own borders?  What happens if the United States hardens its own borders?
 What happens if U.S. allies and partners are in crisis and turn to national tools  What happens if U.S. allies and partners are in crisis and turn to national tools
and approaches? and approaches?
 What supply lines are available to the United States?  What supply lines are available to the United States?
 What is current baseline U.S. production capacity and what is U.S. production  What is current baseline U.S. production capacity and what is U.S. production
capacity in the event an Administration invokes the Defense Production Act capacity in the event an Administration invokes the Defense Production Act
(DPA)? (DPA)?
 What control do chief executive officers of U.S. companies or the U.S.  What control do chief executive officers of U.S. companies or the U.S.
government have over U.S. corporate facilities and operations that are government have over U.S. corporate facilities and operations that are
nationalized in China? nationalized in China?
157 “White House Working on Order to Cut U.S. Dependency on Foreign Medicines,” Reuters, March 16, 2020. 158 Executive Order 13944, “Combating Public Health Emergencies and Strengthening National Security by Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States,” 85 Federal Register 49929, August 6, 2020. 159 U.S. International Development Finance Corporation, “DFC to Sign Letter of Interest for Investment in Kodak’s Expansion Into Pharmaceuticals,” press release, July 28, 2020; U.S. Department of Health and Human Services, “HHS, Industry Partners Expand U.S.-Based Pharmaceutical Manufacturing for COVID-19 Response,” press release, May 19, 2020. Congressional Research Service 50 COVID-19: China Medical Supply Chains and Broader Trade Issues  What are U.S. dependencies on China in other critical areas such as  What are U.S. dependencies on China in other critical areas such as
microelectronics? microelectronics?
U.S. Market Competitiveness and Tariff Policy
Congress faces a series of interrelated questions about whether and how to calibrate trade policy Congress faces a series of interrelated questions about whether and how to calibrate trade policy
to best position the United States in the current crisis and beyond. In response to a U.S. to best position the United States in the current crisis and beyond. In response to a U.S.
investigation of China’s unfair trading practices under Section 301, since 2018, the United States investigation of China’s unfair trading practices under Section 301, since 2018, the United States
has imposed a series of tariffs and China has responded with a series of counter tariffs that now has imposed a series of tariffs and China has responded with a series of counter tariffs that now
affect a majority of trade between the two countries. Temporary tariff relief for medical supplies affect a majority of trade between the two countries. Temporary tariff relief for medical supplies
and pharmaceuticals could incentivize imports for the United States and other markets, but tariff and pharmaceuticals could incentivize imports for the United States and other markets, but tariff
policy cannot address the deeper issues of supply shortages, export constraints imposed by a policy cannot address the deeper issues of supply shortages, export constraints imposed by a
number of countries including China, and product certification requirements in the United States number of countries including China, and product certification requirements in the United States

~~138 Executive Order 13944, “Combating Public Health Emergencies and Strengthening National Security by Ensuring~~
~~Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States,” 85~~ ~~Federal~~
~~Register~~ ~~49929, August 6, 2020.~~
~~139 U.S. International Development Finance Corporation, “DFC to Sign Letter of Interest for Investment in Kodak’s~~
~~Expansion Into Pharmaceuticals,” press release, July 28, 2020; U.S. Department of Health and Human Services, “HHS,~~
~~Industry Partners Expand U.S.-Based Pharmaceutical Manufacturing for COVID-19 Response,” press release, May 19,~~
~~2020.~~
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~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~

and other markets. Tariff liberalization has been insufficient to address industrial policies within and other markets. Tariff liberalization has been insufficient to address industrial policies within
borders such as regulatory standards, procurement terms, and local content requirements that borders such as regulatory standards, procurement terms, and local content requirements that
China and others impose in a range of sectors including pharmaceuticals and medical China and others impose in a range of sectors including pharmaceuticals and medical
equipment.equipment.~~140~~160
Actions by countries around the world to impose export barriers during the pandemic highlight Actions by countries around the world to impose export barriers during the pandemic highlight
potential gaps and limits to the power of WTO rules prohibiting export bans during times of potential gaps and limits to the power of WTO rules prohibiting export bans during times of
global crisis. These actions also raise questions about what new rules or protocols might be global crisis. These actions also raise questions about what new rules or protocols might be
needed in the future.needed in the future.~~141~~161 Liberalization of U.S. import requirements may have also created some of Liberalization of U.S. import requirements may have also created some of
the challenges the United States is facing now, such as loosening the requirements for U.S. the challenges the United States is facing now, such as loosening the requirements for U.S.
pharmaceutical firms to report on shortages and how they classify imported content for finished pharmaceutical firms to report on shortages and how they classify imported content for finished
products that qualify as U.S. products. The potential for China to overwhelm global markets as it products that qualify as U.S. products. The potential for China to overwhelm global markets as it
leans on exports for economic recovery raise questions about whether additional policy measures leans on exports for economic recovery raise questions about whether additional policy measures
might be needed. Rather than waiting until market injury has already occurred to seek damages, might be needed. Rather than waiting until market injury has already occurred to seek damages,
for example, Congress may want to be watching trade patterns for signs of import surges and for example, Congress may want to be watching trade patterns for signs of import surges and
oversee the Administration’s potential use of safeguard measures. Similar to the Australian oversee the Administration’s potential use of safeguard measures. Similar to the Australian
government’s decision on March 29, 2020 to impose new temporary restrictions on all foreign government’s decision on March 29, 2020 to impose new temporary restrictions on all foreign
investment proposals out of concern that strategic investors—particularly those of Chinese investment proposals out of concern that strategic investors—particularly those of Chinese
origin—might target distressed assets, Congress may want to carefully monitor these trends. origin—might target distressed assets, Congress may want to carefully monitor these trends.
Information and Data Gaps
The outbreak of COVID-19 The outbreak of COVID-19 ~~has~~ exposed gaps in U.S. understanding of U.S. domestic exposed gaps in U.S. understanding of U.S. domestic
competencies and dependencies on China and other sources of global supply. Vulnerabilities competencies and dependencies on China and other sources of global supply. Vulnerabilities
regarding raw materials, such as APIs, are not well recorded in trade and industry data. They are regarding raw materials, such as APIs, are not well recorded in trade and industry data. They are
particularly complicated to track when materials are shipped from China and processed in a third particularly complicated to track when materials are shipped from China and processed in a third
market such as India. In similar fashion, the United States has relaxed definitions of what market such as India. In similar fashion, the United States has relaxed definitions of what
qualifies as a U.S. product with imported content, masking the extent to which domestically qualifies as a U.S. product with imported content, masking the extent to which domestically
produced products may still rely on inputs from overseas. Pharmaceutical company stockpiles are produced products may still rely on inputs from overseas. Pharmaceutical company stockpiles are
proprietary, and companies do not have to report on reserves. They are only required to report proprietary, and companies do not have to report on reserves. They are only required to report
~~when they have a shortfall, which does not leave enough time, particularly in times of emergency,~~
~~for national and contingency planning.~~
~~Under the International Investment Survey Act of 1976 (22 U.S.C. §3101 et seq.), the President~~
~~has wide authority over the collection of corporate activity abroad for statistical and analytic~~
~~purposes. The Act also confers on the President the authority to request mandatory surveys of~~
~~companies under specific deadlines with the ability to invoke civil and criminal penalties for~~
~~noncompliance. The President has the authority to study the adequacy of current information and~~
~~recommend improvements, and the Act requires him to report to Congress.142~~
when they have a
~~140~~160 Jennifer A. Hillman, “Six Proactive Steps in a Smart Trade Approach to Fighting COVID-19,” ThinkGlobalHealth, Jennifer A. Hillman, “Six Proactive Steps in a Smart Trade Approach to Fighting COVID-19,” ThinkGlobalHealth,
March 20, 2020, https://www.thinkglobalhealth.org/article/six-proactive-steps-smart-trade-approach-fighting-covid-19 March 20, 2020, https://www.thinkglobalhealth.org/article/six-proactive-steps-smart-trade-approach-fighting-covid-19
Anabel Gonzalez, “A Memo to Trade Ministers on How Trade Policy Can Fight COVID-19,” PIEE, March 23, 2020, Anabel Gonzalez, “A Memo to Trade Ministers on How Trade Policy Can Fight COVID-19,” PIEE, March 23, 2020,
https://www.piie.com/blogs/trade-and-investment-policy-watch/memo-trade-ministers-how-trade-policy-can-help-https://www.piie.com/blogs/trade-and-investment-policy-watch/memo-trade-ministers-how-trade-policy-can-help-
fight-covid. fight-covid.
~~141~~161 See CRS In Focus IF11551, See CRS In Focus IF11551, Export Restrictions in Response to the COVID-19 Pandemic, by Christopher A. Casey , by Christopher A. Casey
and Cathleen D. Cimino-Isaacs. and Cathleen D. Cimino-Isaacs.
~~142 https://uscode.house.gov/view.xhtml?path=/prelim@title22/chapter46&edition=prelim; and “Legal Authority and~~
~~Confidentiality of International Survey Collections,” U.S. Bureau of Economic Analysis,~~
~~https://www.bea.gov/about/legal-authority-and-confidentiality-international-survey-collections.~~
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~~COVID-19: China Medical Supply Chains and Broader Trade Issues~~
Congressional Research Service 51 COVID-19: China Medical Supply Chains and Broader Trade Issues shortfall, which does not leave enough time, particularly in times of emergency, for national and contingency planning. Under the International Investment Survey Act of 1976 (22 U.S.C. §3101 et seq.), the President has wide authority over the collection of corporate activity abroad for statistical and analytic purposes. The act also confers on the President the authority to request mandatory surveys of companies under specific deadlines with the ability to invoke civil and criminal penalties for noncompliance. The President has the authority to study the adequacy of current information and recommend improvements, and the act requires him to report to Congress.162
To address these issues, Congress could consider whether to request the President to invoke his To address these issues, Congress could consider whether to request the President to invoke his
authority over the U.S. government’s collection of data on corporate activity abroad. These authority over the U.S. government’s collection of data on corporate activity abroad. These
corporate surveys could obtain specific supply chain information about the status of PPE and corporate surveys could obtain specific supply chain information about the status of PPE and
medical supply production, distribution, and export policy situation facing U.S. companies medical supply production, distribution, and export policy situation facing U.S. companies
overseas, including in China. The surveys also could cover other sectors of potential overseas, including in China. The surveys also could cover other sectors of potential
congressional concern. This information could inform legislation that Congress has already congressional concern. This information could inform legislation that Congress has already
passed or is considering with regard to overseas supply chains, including sourcing from China. passed or is considering with regard to overseas supply chains, including sourcing from China.
The COVID-19 pandemic The COVID-19 pandemic ~~has~~ highlighted potential limitations in the U.S. medical product supply highlighted potential limitations in the U.S. medical product supply
chain, including concerns that many raise about U.S. reliance on foreign manufacturers and a lack chain, including concerns that many raise about U.S. reliance on foreign manufacturers and a lack
of transparency and diversification in key areas. Some Members of Congress have raised of transparency and diversification in key areas. Some Members of Congress have raised
concerns regarding gaps in U.S. Government’s understanding of U.S. domestic competencies and concerns regarding gaps in U.S. Government’s understanding of U.S. domestic competencies and
dependencies on China and other sources of global supply.dependencies on China and other sources of global supply.~~143~~163
Possible vulnerabilities regarding raw materials and inputs, such as active pharmaceutical Possible vulnerabilities regarding raw materials and inputs, such as active pharmaceutical
ingredients (APIs), are not well recorded in official trade and domestic industry data. They might ingredients (APIs), are not well recorded in official trade and domestic industry data. They might
be particularly difficult to track if they originate in one country but are subsequently processed in be particularly difficult to track if they originate in one country but are subsequently processed in
another. another. ~~While facilities that manufacture drugs and medical devices for the U.S. market~~
~~generally are required to register with FDA, the agency has limited visibility into the quantity~~
~~produced at a specific facility, particularly with respect to raw materials or APIs.~~ In addition, the In addition, the
United States has relaxed definitions of what qualifies as a U.S. product with imported content, United States has relaxed definitions of what qualifies as a U.S. product with imported content,
which may mask the extent to which domestically produced products rely on foreign inputs.which may mask the extent to which domestically produced products rely on foreign inputs.~~144~~
~~In response to these concerns, Congress has considered legislation to help regulators,~~
~~stakeholders, and the public better understand the medical product supply chain.~~ 164 The Coronavirus The Coronavirus
Aid, Relief, and Economic Security Aid, Relief, and Economic Security ~~Act~~ (CARES(CARES) Act Act; (P.L. 116-136)~~P.L. 116-136), for example, requires HHS~~
~~to contract with the National Academies of Science, Engineering, and Medicine (NASEM) to~~
~~examine and report on the security of the U.S. medical product supply chain, including U.S.~~
~~dependence on critical drugs and devices (e.g., medical PPE) from other countries.145 The~~
~~CARES Act also~~ included a provision that aims to address some of these gaps by requiring included a provision that aims to address some of these gaps by requiring
~~registered drug and API~~ producers to report to the producers to report to the ~~FDA, on an annual basis,~~U.S. Food and Drug Administration (FDA) the amount of drugs the amount of drugs
manufactured for domestic distribution.manufactured for domestic distribution. ~~Legislation has been introduced that would expand this~~
~~requirement to medical devices (e.g., PPE) and would make the requirements quarterly.146 The~~
~~CARES Act also provided FDA the explicit authority to require certain device manufacturers to~~
~~report interruptions or discontinuances in manufacturing during or prior to a public health~~
~~emergency; to take certain actions to mitigate shortages; and to make public a list of devices that~~
~~are in shortage.147 Congress could consider expanding reporting requirements in future legislation~~
~~to include requiring manufacturers of all medical devices to report to FDA actual or forecasted~~
~~increases in demand that may lead to a shortage, or to report actions taken by other regulatory~~

~~143~~165 Some Members have also introduced legislation that would require the U.S. government to review and report on the origin of pharmaceuticals sold in the United States and the role that foreign manufacturing plays in medical supply chains. Other congressional proposals would require drug makers to report on reserves, since requiring them to do so only when they 162 https://uscode.house.gov/view.xhtml?path=/prelim@title22/chapter46&edition=prelim; and “Legal Authority and Confidentiality of International Survey Collections,” U.S. Bureau of Economic Analysis, https://www.bea.gov/about/legal-authority-and-confidentiality-international-survey-collections. 163 U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Evaluating the Federal U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Evaluating the Federal
Government’s Procurement and Distribution Strategies in Response to the COVID-19 Pandemic, hearing, 116th Cong., Government’s Procurement and Distribution Strategies in Response to the COVID-19 Pandemic, hearing, 116th Cong.,
2nd sess., June 9, 2020. 2nd sess., June 9, 2020.
~~144~~164 The lack of statutory definitions of various terms (e.g., “manufactured” in the United States) may yield different The lack of statutory definitions of various terms (e.g., “manufactured” in the United States) may yield different
determinations for the same product. Moreover, the “substantial transformation” test used by U.S. Customs and Border determinations for the same product. Moreover, the “substantial transformation” test used by U.S. Customs and Border
Protection (CBP) to determine a product’s country of origin for trade purposes is complex, fact-specific, and thus Protection (CBP) to determine a product’s country of origin for trade purposes is complex, fact-specific, and thus
inherently subjective in nature. inherently subjective in nature.
~~145 P.L. 116-136, §3101.~~
~~146 See, for example, S. 3781 (116th Congress).~~
~~147 FFDCA §506J, as established by P.L. 116-136, §3121~~165 For more detail, see CRS Report R46628, COVID-19 and Domestic PPE Production and Distribution: Issues and Policy Options, coordinated by Michael H. Cecire. .
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COVID-19: China Medical Supply Chains and Broader Trade Issues

~~authorities that could affect U.S supply (e.g., export restrictions). This may help FDA better~~
~~anticipate and take steps to prevent shortages.~~
~~While medical products manufacturers are required to report various supply chain information to~~
~~FDA, this information may not be shared with other agencies or departments. As such, legislation~~
~~has been introduced in the 116th Congress that would require FDA to share certain supply chain~~
~~information with the ASPR and DOD.148 Legislation also has been introduced that would require~~
~~the Secretaries of HHS, Homeland Security, and Defense to individually conduct annual risk~~
~~assessments of the medical product supply chain and submit those assessments to Congress.149~~
~~This information could be used to guide PPE production and acquisition efforts.~~
~~Some Members have also introduced legislation that would require the U.S. government to~~
~~review and report on the origin of pharmaceuticals sold in the United States and the role that~~
~~foreign manufacturing plays in medical supply chains.150 Other congressional proposals would~~
~~require drug makers to report on reserves, since requiring them to do so only when they have~~
~~shortages that may not leave enough time, particularly in times of emergency, for national and~~
~~contingency planning.~~
have shortages may not leave enough time, particularly in times of emergency, for national and contingency planning. Some Members have also introduced legislation that would require the U.S. government to review and report on the origin of pharmaceuticals sold in the United States and the role that foreign manufacturing plays in medical supply chains.166 Other congressional proposals would require drug makers to report on reserves, since requiring them to do so only when they have shortages that may not leave enough time, particularly in times of emergency, for national and contingency planning. Members of Congress also tasked the U.S. International Trade Commission (ITC) with conducting an analysis of COVID-19 related supply chains (see textbox). U.S. International Trade Commission’s Investigations Related to COVID-19: Market, Trade, and Supply Chain Challenges On April 6, 2020, the Chairs of the House Committee on Ways and Means and the Senate Committee on Finance requested that the U.S. International Trade Commission (USITC) identify imported goods related to the response to the COVID-19 pandemic, their source countries, tariff classifications, and applicable rates of duty. To assist the Committees and the U.S. Trade Representative (USTR) in proposing or taking appropriate and responsive actions, the Chairs asked that the USITC issue a report by April 30, 2020. The USITC released its report, “COVID-19 Related Goods, US. Imports and Tariffs,” to the public on May 4, 2020, and updated it on June 30, 2020, which provided trade-related information for the products identified, and tabulated U.S. import data from 2017, 2018, and 2019. Subsequently, on August 13, 2020, the Committees requested a fol ow-on investigation. The USITC was also asked to publish a report that builds on the earlier investigation and provide more detailed information on COVID-19 related industry sectors and particular products identified in the Commission's previous report. The latest report, “COVID-19 Related Goods: The U.S. Industry, Market, Trade, and Supply Chain Challenges,” was released on December 22, 2020. It assesses “the availability of goods from the onset of the COVID-19 pandemic through September 2020, provides overviews of four key industry sectors (medical devices, personal protective equipment, pharmaceuticals, and soaps and cleaning compounds). . [and] includes case studies on ventilators, N95 respirators, surgical masks, surgical and isolation gowns, medical and surgical gloves, test kits, vaccines, and hand sanitizer.”167 The study concludes, among other things, that U.S. domestic industries faced challenges in ramping up production to meet growing demand and that the extent of domestic production varied significantly. In particular, U.S.-based producers’ share of the domestic market was relatively small for certain PPE such as medical gloves and gowns, but large for goods like ventilators, vaccines, N95 respirators, and hand sanitizer. According to the findings, major factors affecting domestic production of COVID-19 related goods include the availability and costs of inputs, the time and cost of bringing additional production capacity online, and the time needed to recruit and train new workers. Finally, because global demand significantly exceeded available supply of many COVID-19 related goods, it was difficult for U.S. importers to procure PPE in sufficient quantities. While there may not be a single legislative solution to measure and manage supply chain While there may not be a single legislative solution to measure and manage supply chain
dependencies and risks, Congress could consider authorizing federal agencies to collect more data dependencies and risks, Congress could consider authorizing federal agencies to collect more data
on individual firms’ activities in the United States and abroad. In the past, Congress has taken on individual firms’ activities in the United States and abroad. In the past, Congress has taken
similar steps to monitor U.S. investment abroad and foreign investment in the United States (see similar steps to monitor U.S. investment abroad and foreign investment in the United States (see
22 U.S.C. §§ 3101-3108). Agencies could obtain, analyze, and report specific supply chain 22 U.S.C. §§ 3101-3108). Agencies could obtain, analyze, and report specific supply chain
information about the status of PPE and medical goods production and distribution without information about the status of PPE and medical goods production and distribution without
disclosing business confidential information that could seriously prejudice firms’ interests. disclosing business confidential information that could seriously prejudice firms’ interests.
Surveys also could help assess the overall production capabilities of U.S.-based producers in Surveys also could help assess the overall production capabilities of U.S.-based producers in
industries or sectors of congressional concern. industries or sectors of congressional concern.
166 See, for example, S. 3537 (116th Congress). 167 U.S. International Trade Commission, “USITC Releases Report Concerning the U.S. Industry, Market, Trade, and Supply Chain Challenges for COVID-19 Related Goods,” December 22, 2020; and “COVID-19 Related Goods: The U.S. Industry, Market, Trade, and Supply Chain Challenges,” Investigation No. 332-580, USITC Publication 5145, December 2020. Congressional Research Service 53 COVID-19: China Medical Supply Chains and Broader Trade Issues Alternatively, Congress could direct some agencies to collect data on federally owned public and Alternatively, Congress could direct some agencies to collect data on federally owned public and
defense stockpiles of certain items. While this would be a more targeted effort, it might be easier defense stockpiles of certain items. While this would be a more targeted effort, it might be easier
to manage and provide comprehensive data far more quickly and at less expense to the to manage and provide comprehensive data far more quickly and at less expense to the
government. This information could inform legislation that Congress has already passed or is government. This information could inform legislation that Congress has already passed or is
considering with regard to domestic production and overseas supply chains, including sourcing considering with regard to domestic production and overseas supply chains, including sourcing
from China. from China.
Unique Role of the U.S. Federal Government
At a time when U.S. health care systems, states, and countries overseas At a time when U.S. health care systems, states, and countries overseas ~~are seeking~~seek to secure to secure
limited medical supplies, the U.S. federal government has a unique role to play in ensuring limited medical supplies, the U.S. federal government has a unique role to play in ensuring
adequate domestic and global production, contracting of supply (both domestically and globally), adequate domestic and global production, contracting of supply (both domestically and globally),
and distribution of these resources. Even as new capacity might be available in China, for and distribution of these resources. Even as new capacity might be available in China, for
example, who are the U.S. actors positioned to try to secure this supply and through what example, who are the U.S. actors positioned to try to secure this supply and through what
pathways? Lack of coordination at the federal level has led states to scramble and compete pathways? Lack of coordination at the federal level has led states to scramble and compete
against each other for critical medical supplies in the current crisis.against each other for critical medical supplies in the current crisis.168 Among the key questions Among the key questions
related to these issues, Congress may explore answers to such questions as: related to these issues, Congress may explore answers to such questions as:
 How does the U.S. federal government position itself vis-a-vis U.S. state and  How does the U.S. federal government position itself vis-a-vis U.S. state and
private actors? private actors?

~~148 See, for example, S. 3781 (116th Congress).~~
~~149 See, for example, S. 3780 (116th Congress).~~
~~150 See, for example, S. 3537 (116th Congress).~~
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 How does the U.S. federal government position itself vis-a-vis other foreign  How does the U.S. federal government position itself vis-a-vis other foreign
governments trying to secure similar supplies? governments trying to secure similar supplies?
 What is the U.S. government’s posture toward supplies needed in the developing  What is the U.S. government’s posture toward supplies needed in the developing
world? world?
 How might expanded production capacity created in the United States not only  How might expanded production capacity created in the United States not only
help the U.S. market but also those of other countries, in the near term and over help the U.S. market but also those of other countries, in the near term and over
the longer term? the longer term?
U.S. Leadership on Global Medical Trade
The The ~~current~~ COVID-19 pandemic COVID-19 pandemic ~~provides~~has provided a unique opportunity to reaffirm U.S. global a unique opportunity to reaffirm U.S. global
leadership on trade and health issues and to counter China’s nationalization and likely leadership on trade and health issues and to counter China’s nationalization and likely
politicization of its domestic medical supply production capacity. China’s export restraints and politicization of its domestic medical supply production capacity. China’s export restraints and
cornering of the global supply of medical products ahead of others in February 2020 have created cornering of the global supply of medical products ahead of others in February 2020 have created
strains on the open trade system, further incentivizing other countries to close borders and restrict strains on the open trade system, further incentivizing other countries to close borders and restrict
any access to supplies they may have. These moves also have given China market power over any access to supplies they may have. These moves also have given China market power over
other countries’ procurement decisions as governments around the world grapple with how best to other countries’ procurement decisions as governments around the world grapple with how best to
secure critical supplies. Early signs secure critical supplies. Early signs ~~show~~showed that China that China is closely closely ~~controlling and releasing~~controlled and released supplies supplies
to other governments through contracts and some aid in ways that to other governments through contracts and some aid in ways that ~~seek~~sought to improve China’s global to improve China’s global
image and may image and may have come with other quid pro quo terms that are not yet visible. China’s economic come with other quid pro quo terms that are not yet visible. China’s economic
recovery ahead of others could further challenge and undermine key tenets of the open trade recovery ahead of others could further challenge and undermine key tenets of the open trade
system, particularly if China exports pent up domestic capacity with a disregard for what the system, particularly if China exports pent up domestic capacity with a disregard for what the
current state of the global economy is prepared to absorb on market terms. current state of the global economy is prepared to absorb on market terms.
168 For further discussion of these issues also see, “COVID-19: Federal Efforts Could Be Strengthened By Timely and Concerted Actions,” GAO Report to Congressional Committees, GAO-20-701, September 21, 2020, https://www.gao.gov/reports/GAO-20-701/. Congressional Research Service 54 COVID-19: China Medical Supply Chains and Broader Trade Issues While some European countries ~~While some European countries have~~ imposed export restraints on their health supplies, some imposed export restraints on their health supplies, some
politicians in Europe politicians in Europe ~~are concerned~~have expressed concern about how the Chinese government about how the Chinese government ~~is manipulating~~manipulated the crisis the crisis
and China’s position in global supply chains for political gain.and China’s position in global supply chains for political gain.~~151~~169 Some analysts have expressed Some analysts have expressed
concern that China concern that China ishas been trying to position itself as a responsible global leader in health, while trying to position itself as a responsible global leader in health, while
violating the core tenets of WHO membership in failing to share critical information and access violating the core tenets of WHO membership in failing to share critical information and access
in the critical first few weeks as the crisis emerged in Wuhan. Members concerned about in the critical first few weeks as the crisis emerged in Wuhan. Members concerned about
maintaining U.S. global economic leadership during the COVID-19 pandemic may consider maintaining U.S. global economic leadership during the COVID-19 pandemic may consider
using hearings, legislation, and statements to communicate key issues to be addressed. using hearings, legislation, and statements to communicate key issues to be addressed.
Possible questions for Congress in the context of COVID-19 include Possible questions for Congress in the context of COVID-19 include:
 whether to prioritize economic openness and free flows of information;  whether to prioritize economic openness and free flows of information;
 whether to prioritize diversifying sources of medical supplies, and if so, how;  whether to prioritize diversifying sources of medical supplies, and if so, how;
 how best to overcome current and future bottlenecks in health care supply chains  how best to overcome current and future bottlenecks in health care supply chains
in the United States and partner nations; in the United States and partner nations;
 whether to respond to China’s attempts to control the global narrative about key  whether to respond to China’s attempts to control the global narrative about key
COVID-19 events, and if so, how; and COVID-19 events, and if so, how; and
 whether to look to reform global health and trade governance in light of COVID-  whether to look to reform global health and trade governance in light of COVID-
19 developments, and if so, how. 19 developments, and if so, how.
Some Members have questioned the role of China and the WHO during the initial COVID-19 Some Members have questioned the role of China and the WHO during the initial COVID-19
outbreak and outbreak and ~~are~~have been raising questions about the need to reform global health governance. raising questions about the need to reform global health governance. Other ~~Other~~

~~151 “The Coronavirus and the New World it is Creating,” European Union External Action Office, March 23, 2020,~~
~~https://eeas.europa.eu/headquarters/headquarters-~~
~~homepage_en/76379/The%20Coronavirus%20pandemic%20and%20the%20new%20world%20it%20is%20creating.~~
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Members have looked to set a clear chronology of events in the COVID-19 outbreak to maintain Members have looked to set a clear chronology of events in the COVID-19 outbreak to maintain
an accurate record that is not distorted by Chinese state propaganda. Some Members an accurate record that is not distorted by Chinese state propaganda. Some Members ~~are also~~
have been looking at the social media platforms that the Chinese government looking at the social media platforms that the Chinese government ~~is using~~uses to convey state to convey state
propaganda—such as Twitter—and propaganda—such as Twitter—and ~~raising~~have raised questions about whether this access should be questions about whether this access should be
allowed. Several Members have expressed an interest in potential measures to hold China allowed. Several Members have expressed an interest in potential measures to hold China
accountable for its slowness to acknowledge, address, and share information regarding the accountable for its slowness to acknowledge, address, and share information regarding the
outbreak of COVID-19 as required by WHO members. outbreak of COVID-19 as required by WHO members.
169 “The Coronavirus and the New World it is Creating,” European Union External Action Office, March 23, 2020, https://eeas.europa.eu/headquarters/headquarters-homepage_en/76379/The%20Coronavirus%20pandemic%20and%20the%20new%20world%20it%20is%20creating. Congressional Research Service 55 ~~Congressional Research Service~~
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COVID-19: China Medical Supply Chains and Broader Trade Issues

Appendix A. U.S. Imports of Select Medical
Products

Table A-1. U.S. Imports of Pharmaceuticals and Medical Equipment, Products, ~~and~~
and Supplies in 2019
Economy
Value (US$)
Ireland Ireland
35,797,919,666 35,797,919,666
Germany Germany
25,416,992,979 25,416,992,979
China China
20,744,036,029 20,744,036,029
Switzerland Switzerland
19,115,982,191 19,115,982,191
Mexico Mexico
15,758,366,376 15,758,366,376
Italy Italy
9,356,424,042 9,356,424,042
Canada Canada
9,072,982,790 9,072,982,790
India India
8,325,151,620 8,325,151,620
Japan Japan
8,126,636,035 8,126,636,035
Singapore Singapore
7,947,308,765 7,947,308,765
Rest of the World Rest of the World
64,911,471,228 64,911,471,228
Total
$224,573,271,721
~~Source~~Sources: CRS using the World Customs Organization’s “HS Classification Reference for COVID-19 Medical CRS using the World Customs Organization’s “HS Classification Reference for COVID-19 Medical
SuppliesSupplies;””; Gary Clyde and Jeffrey J. Schott’s “List of Pharmaceutical and Medical Device Products by Harmonized Gary Clyde and Jeffrey J. Schott’s “List of Pharmaceutical and Medical Device Products by Harmonized
System (HS) Code” in System (HS) Code” in Local Content Requirements: A Global Problem; and Chad Bown’s “Trump’s Trade Policy Is ; and Chad Bown’s “Trump’s Trade Policy Is
Hampering the U.S. Fight Against COVID-19.” Data sourced from the U.S. International Trade Commission’s Hampering the U.S. Fight Against COVID-19.” Data sourced from the U.S. International Trade Commission’s
DataWeb and Global Trade Atlas. DataWeb and Global Trade Atlas.
~~Notes~~Note: The figures presented here cover product categories at the HTS six-digit level. The figures presented here cover product categories at the HTS six-digit level.

Author Information

Karen M. Sutter, Coordinator Karen M. Sutter, Coordinator
Michael D. Sutherland Michael D. Sutherland
Specialist in Asian Trade and Finance Specialist in Asian Trade and Finance
Analyst in International Trade and Finance Analyst in International Trade and Finance

Andres B. Schwarzenberg Andres B. Schwarzenberg

Analyst in International Trade and Finance Analyst in International Trade and Finance

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COVID-19: China Medical Supply Chains and Broader Trade Issues

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