A U.S. official said he is preparing an executive order to hand to President Donald Trump that would help relocate medical supply chains from overseas to the United States, as the coronavirus outbreak exposes the vulnerabilities of foreign supply chains.
White House trade adviser Peter Navarro, director of the Office of Trade and Manufacturing Policy, told CNBC that the United States is heavily dependent on the global supply chain “not just for its medicines but for its medical supplies and medical equipment.”
“The essence of the order … is to bring all of that home so that we don’t have to worry about foreign dependency,” he said in a March 16 interview, adding that 70 percent of the ingredients used in advanced pharmaceuticals “comes from abroad.”
Navarro didn’t specifically name which foreign countries, but experts have long pointed to U.S. dependence on China. Rosemary Gibson, a senior adviser at the Hastings Center, a bioethics research institute, and the co-author of “China Rx: Exposing the Risks of America’s Dependence on China for Medicine,” told The Epoch Times previously that it’s “a risk to our national security.”
“For prescription drugs, 90 percent of the core ingredients, the chemicals, and other ingredients depend on China,” Gibson said.
Navarro said the departments of Veterans Affairs, Health and Human Services, and Defense buy significant amounts of medical equipment, and “we need to have them buy that from American producers on American soil.”
He noted that the current demand for medical masks exposes the pitfalls of foreign supply chains.
Earlier this month, the Trump administration granted exemptions from tariffs on medical products imported from China, which include protective masks and medical gloves.
The issue is also receiving bipartisan concern from lawmakers. Sens. Marsha Blackburn (R-Tenn.) and Bob Menendez (D-N.J.) recently introduced legislation that would boost U.S. manufacturing of active pharmaceutical ingredients (APIs) that are needed to form prescription drugs. Their legislation proposes an additional $100 million in funding to boost U.S. pharmaceutical manufacturing.
Currently only 28 percent of pharmaceutical ingredient facilities making APIs for the U.S. market are in the United States. The remaining 72 percent of API manufacturers supplying the U.S. market are outside the country, including 13 percent in China, according to the Drug, Chemical & Associated Technologies Association. The number of Chinese facilities has more than doubled since 2010.
“The COVID-19 is a real health emergency and we have to do everything in our power to increase our preparedness and response,” said Menendez in a statement. “This bipartisan proposal will do that by encouraging drug manufacturers to partner with our best minds in higher education on new advancements, creating good jobs and increasing the national production of vaccines and drugs that can save lives.”
The Chinese Communist Party has used this dependence on its manufacturing to threaten the United States. State-run Global Times published an article in March saying China “could ban the export of face masks and other medical gear to America which are in acute shortage,” over recent actions by the United States to restrict market access to Chinese telecommunications giant Huawei, which was founded in 1987 by a former People’s Liberation Army engineer.
Gibson said the United States is “dramatically dependent” on China for medical supplies that include among them masks, scans, prescription drugs, and their ingredients.
Meanwhile, the Federal Reserve on March 15 slashed its rates to near zero and announced a range of financial crisis management measures, including the launch of a massive $700 billion quantitative easing program to combat global market fears caused by the outbreak.