How a Chinese drugs firm avoided US tariffs

World
Europe

04:52

Around the world, businesses, officials and scholars continue to deal with the escalating Sino-US trade war. But one Chinese drug maker, Zhejiang Medicine, is breathing a sigh of relief, having been exempted from at least one of America’s biggest tariffs. How did the company do it?

Zhejiang Medicine was exempted from the tariff list in June. /CGTN photo

The intensifying trade war was launched by US President Donald Trump who has shown a tough attitude and said that the US has a massive deficit with China and will combat the alleged counterfeiting and piracy that destroys American jobs.

CGTN obtained an exclusive copy of the court testimony of Zhejiang Medicine. /CGTN photo

Choon Teo, Zhejiang Medicine’s representative at a US hearing on the tariffs, is the deputy chairman of the board of a sub-branch of the company, Zhejiang Novus Pharmaceuticals. The firm prepared for over a month before sending a representative to a US court hearing on May 17. The main goal was to find the core motive of US retaliation against Chinese firms and fight back.

The testimony shows how irreplaceable the company’s drugs are in the US market. /CGTN photo

In the court testimony, there were two main aspects.

One is that Zhejiang Medicine uses American-made machinery, they do so with no support from the Chinese government, and they have none of the intellectual property issues identified in the Section 301 US investigation into Chinese trade practices.

Secondly, Zhejiang Medicine is close to helping alleviate the drug shortage and bringing down the cost to American patients, hospitals and US federal and state programs like Medicaid and Medicare.

Choon Teo reiterated that it was wrong to treat US patients like hostages in a conflict over trade. /CGTN photo

Some American patients are highly vulnerable victims of the opioid crisis and are desperate to get the drugs from Zhejiang Medicine.

A month later, the US Department of Commerce decided to erase the company from the tariff list, along with a number of other related Chinese firms in the pharmaceutical industry.

A six-day public hearing is now underway regarding 200 billion dollars worth of Chinese products. /CGTN photo

CGTN also had an exclusive look at testimony from Jiangsu Beier Decoration Co. Ltd. /CGTN photo

With other Chinese companies and representatives, Teo is going to attend another court hearing in the coming days, one focusing on over 200 billion dollars worth of Chinese products.

Though no one knows how long the Sino-US Trade spat will continue, as more Chinese companies go global, protecting their own intellectual property rights has become increasingly important. It is also paramount for Chinese companies to understand differences in various legal systems so that they can be cooperative and perceived in a positive light by judges and juries.