Via Financial Times

Peter Navarro, a senior trade adviser to Donald Trump, has urged the US to reduce its reliance on pharmaceutical and medical supply imports from China and the rest of the world in response to the coronavirus outbreak, calling it a ‘wake-up call” for greater American independence in the sector.

Speaking to the Financial Times’ Trade Secrets newsletter, Mr Navarro called on the US government to limit its involvement in global supply chains that could leave the country vulnerable to shortages in a medical crisis, and boost purchases of US-made products in its procurement policies. 

“This is a wake-up call for an issue that has been latent for many years but is critical to US economic and national security,” Mr Navarro said.

“If we have learned anything from the coronavirus and swine flu H1N1 epidemic of 2009, it is that we cannot necessarily depend on other countries, even close allies, to supply us with needed items, from face masks to vaccines,” he added. 

Mr Navarro’s comments reflect the growing attention to the spreading disease among officials in Washington, even though Mr Trump, the US president, expressed confidence this week that it would “all work out fine” because Beijing was working “very, very hard” to stamp out the epidemic and warm weather would reduce its impact by April.

The FT reported earlier on Wednesday that some pharmaceutical industry executives are increasingly concerned about the implications of prolonged closures of Chinese making crucial drug ingredients. Umang Vohra, chief executive of one of India’s largest drugmakers, Cipla, said there could be “huge unavailability across the chain” if the shutdown extended beyond February.

The words of the 70-year-old director of trade and manufacturing policy at the White House — a well-known China hardliner — highlight how the push for a decoupling of US-China supply chains remains alive among some Trump administration officials despite last month’s signing of a truce in the trade war between the world’s largest economies in a “phase one” deal due to take effect at the end of this week.

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“The policy of the US government, Congress and this administration is to Buy American,” Mr Navarro said. “The question is why aren’t we fully applying this principle to medical supplies like N-95 masks, medical equipment like ventilators, and pharmaceuticals such as antibiotics.”

He added: “We are looking very closely at this now. By onshoring more of our pharmaceutical supply chain it will not only be more resilient. It will offer important opportunities to reduce drug prices through the rapid adoption of cutting-edge advanced manufacturing processes.” 

The concerns expressed by Mr Navarro came as Chinese officials at the WTO warned members of the global trade body against any “overreaction” or “unnecessary trade restrictions” in response to the coronavirus crisis, according to one Geneva-based official.

The US has not introduced any new trade bans or limits on Chinese medical imports in response to the crisis, but Mr Navarro said that the Trump administration could start by tightening its procurement regime in the area. 

US officials and lawmakers have expressed concern that the closure of manufacturing facilities in China, as well as possible export restrictions placed by Chinese authorities on certain products such as masks, might put the US at risk. 

Last week, Marco Rubio, the Republican senator from Florida, and Chris Murphy, the Democratic senator from Connecticut, sent a letter to Stephen Hahn, the commissioner of the Food and Drug Administration, asking if the agency had the “necessary tools to ensure the safety and supply of pharmaceuticals, food and medical supplies” from China, worth $12.7bn in 2018.

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