Industry leaders stated that increased tariffs by the United States on Chinese-made medical gloves, syringes, and face masks are unlikely to boost the competitiveness of American manufacturers since other low-cost suppliers will likely jump at the chance to fill the void.
As part of a larger plan to boost local manufacturing and defend against supply shortages seen during the COVID-19 epidemic, Washington proposed significant tariff rises on a range of Chinese imports earlier this month, including medical items.
However, business leaders contend that taxes are unlikely to increase local producers' competitiveness since Chinese companies may reroute goods through international supply chains, giving suppliers from other nations—like Malaysia—an chance to take advantage of the situation.
"I always said no matter what we do with tariffs, the Chinese will find a way around it ... It's not the silver bullet we need," said Dan Izhaky, president of the American Medical Manufacturers Association.
Izhaky, who is building a medical-grade glove factory in Baltimore, added that American manufacturers want assistance right now, not in two years. While the planned taxes on masks and syringes will go into effect in August of this year, the tariffs on gloves are scheduled to go into effect in 2026.
Data from the U.S. International Trade Commission show that in 2023, the United States imported face masks, syringes, and gloves from China worth close to $640 million.
The office of the U.S. Trade Representative said last week that it will solicit feedback from the public about the implications of the proposed tariff hikes and whether the 25% tax on medical masks and gloves and the 50% tariff on syringes need to be raised.
Co-founder of Lutema USA, Eddie Phanichkul, stated that a 25% tax on masks only "sends a message" and that his company established a mask plant in San Diego during the epidemic.
"In the end, we manufacture for five to ten cents, while they sell for a penny. That's difficult to compete with," Phanichkul continued.
According to U.N. trade data, China was the largest exporter of medical-grade masks by volume in 2023. The average selling price per kilogramme was $4.14, which was less than competitor exporter Malaysia's $5.5 selling price.
According to Apex Securities analyst Chelsea Chew, "China might shift its focus to Asian or European countries" in order to maintain its business. Chew predicts that glove producers in China and Malaysia won't experience any direct effects until late 2025 or early 2026.
China's foreign minister stated that the United States' decision to raise tariffs indicates that some Americans may be "losing their minds" and that rather than impeding China's progress, it will motivate its 1.4 billion people to put in more effort.
According to Managing Director Owen Luo, China's New Pentastar Medical Products is thinking about cutting product pricing and working with suppliers that manufacture outside of the country. Syringes are among the products it sells to the United States, and it collaborates with over 500 producers in other nations, such as Malaysia and Thailand.
The largest medical glove manufacturer in the world, Top Glove, is based in Malaysia, and it anticipates that the U.S. tariffs would raise the cost of locally made gloves, which have fallen below cost of production as a result of Chinese competition.
Top Glove stated, "This presents an opportunity for us to regain market share previously lost to... Chinese competitors during the price war in 2022," even though it would need to get ready to open up more manufacturing lines in order to keep up with demand.
According to U.N. trade data, Malaysia, the world's top exporter of medical-grade gloves by value, sent masks worth $1.89 billion in 2023, with China coming in second with $1.1 billion.
Some American producers, who are concerned about escalating competition, believe that Washington's demand-side involvement offers the best chance for success.
An executive order instructing government agencies to boost their procurement of items manufactured in the United States and creating a manufactured in America office to oversee this process was one of President Joe Biden's first actions in office.
But that agency also established a procedure by which purchasers could request exceptions from this, and American PPE producers contend that this keeps them from receiving profitable federal contracts.
Mask manufacturer Altor Safety in Valley Cottage, New York, employs Thomas Allen as managing partner. "There are rules in place to buy American, they just need to enforce it," Allen said.
(Source:www.reuters.com)
As part of a larger plan to boost local manufacturing and defend against supply shortages seen during the COVID-19 epidemic, Washington proposed significant tariff rises on a range of Chinese imports earlier this month, including medical items.
However, business leaders contend that taxes are unlikely to increase local producers' competitiveness since Chinese companies may reroute goods through international supply chains, giving suppliers from other nations—like Malaysia—an chance to take advantage of the situation.
"I always said no matter what we do with tariffs, the Chinese will find a way around it ... It's not the silver bullet we need," said Dan Izhaky, president of the American Medical Manufacturers Association.
Izhaky, who is building a medical-grade glove factory in Baltimore, added that American manufacturers want assistance right now, not in two years. While the planned taxes on masks and syringes will go into effect in August of this year, the tariffs on gloves are scheduled to go into effect in 2026.
Data from the U.S. International Trade Commission show that in 2023, the United States imported face masks, syringes, and gloves from China worth close to $640 million.
The office of the U.S. Trade Representative said last week that it will solicit feedback from the public about the implications of the proposed tariff hikes and whether the 25% tax on medical masks and gloves and the 50% tariff on syringes need to be raised.
Co-founder of Lutema USA, Eddie Phanichkul, stated that a 25% tax on masks only "sends a message" and that his company established a mask plant in San Diego during the epidemic.
"In the end, we manufacture for five to ten cents, while they sell for a penny. That's difficult to compete with," Phanichkul continued.
According to U.N. trade data, China was the largest exporter of medical-grade masks by volume in 2023. The average selling price per kilogramme was $4.14, which was less than competitor exporter Malaysia's $5.5 selling price.
According to Apex Securities analyst Chelsea Chew, "China might shift its focus to Asian or European countries" in order to maintain its business. Chew predicts that glove producers in China and Malaysia won't experience any direct effects until late 2025 or early 2026.
China's foreign minister stated that the United States' decision to raise tariffs indicates that some Americans may be "losing their minds" and that rather than impeding China's progress, it will motivate its 1.4 billion people to put in more effort.
According to Managing Director Owen Luo, China's New Pentastar Medical Products is thinking about cutting product pricing and working with suppliers that manufacture outside of the country. Syringes are among the products it sells to the United States, and it collaborates with over 500 producers in other nations, such as Malaysia and Thailand.
The largest medical glove manufacturer in the world, Top Glove, is based in Malaysia, and it anticipates that the U.S. tariffs would raise the cost of locally made gloves, which have fallen below cost of production as a result of Chinese competition.
Top Glove stated, "This presents an opportunity for us to regain market share previously lost to... Chinese competitors during the price war in 2022," even though it would need to get ready to open up more manufacturing lines in order to keep up with demand.
According to U.N. trade data, Malaysia, the world's top exporter of medical-grade gloves by value, sent masks worth $1.89 billion in 2023, with China coming in second with $1.1 billion.
Some American producers, who are concerned about escalating competition, believe that Washington's demand-side involvement offers the best chance for success.
An executive order instructing government agencies to boost their procurement of items manufactured in the United States and creating a manufactured in America office to oversee this process was one of President Joe Biden's first actions in office.
But that agency also established a procedure by which purchasers could request exceptions from this, and American PPE producers contend that this keeps them from receiving profitable federal contracts.
Mask manufacturer Altor Safety in Valley Cottage, New York, employs Thomas Allen as managing partner. "There are rules in place to buy American, they just need to enforce it," Allen said.
(Source:www.reuters.com)
