The possible of a trade war with China prompted many American and Western companies to consider expanding the resilience of their supply chains and reducing dependence on China. However, as Willy C. Shih and Veronica Chua show, this is not an easy task. An example of 3 vitamins – folic acid (B9), niacinamide (B3) and biotin (B7) – perfectly illustrates how profoundly the United States depends on Chinese supplies. These vitamins are not only crucial to public health, but besides commonly utilized in food products, cosmetics and animal feed. However, this dependency goes much further – it besides applies to key components of active medicines (API), pharmaceutical natural materials and another products needed for the American pharmaceutical market.
Folic acid (B9): essential but dependent on China
Since 1998, the American Food and Drug Agency (FDA) has required the addition of folic acid to enriched cereal products specified as breakfast cereals, bread, flour, pasta and rice. Folic acid is essential for healthy cell growth, especially in pregnant women, and plays a key function in preventing neural tubular defects in the foetus. In 2023, the planet wellness Organisation (WHO) adopted a resolution promoting food fortification with folic acid to prevent micronutrient deficiency.
Despite its key role, the United States is heavy dependent on Chinese folic acid supplies. According to US Customs data, China was liable for 58% of all folic acid imports to the US in 2023, an increase from 42% 5 years earlier. China is simply a leading maker of synthetic folic acid, with an yearly production capacity of around 3000 tonnes. Folic acid production generates immense amounts of waste, including waste water with advanced levels of ammonium nitrogen and inorganic salts. The advanced costs of recycling these wastes led to the closure of many U.S. production facilities and the relocation of production to China.
In 2015, the introduction of fresh Chinese environmental regulations caused the temporary closure of many factories, leading to a global folic acid deficiency and a sharp price increase from $22 per kilo in 2014 to $445 in 2015. However, Chinese companies have adapted by introducing better waste disposal methods, which allowed them to regain marketplace leadership.
Niacinamide (B3): A cosmetic component that lacks can hit consumers
Niacinamid, besides known as vitamin B3, is simply a key component of many skin care products. Its properties aid defend the skin from irritation, UV radiation and moisture loss, as well as alleviate problems specified as acne, discoloration or wrinkles. In 2023, the global beauty product marketplace containing niacinamide was estimated at $559 million. Leading brands specified as Kiehl’s, Olay, Neutrogena and Estée Lauder invest in the improvement and marketing of niacinamide products.
As with folic acid, the United States is heavy dependent on Chinese supply of niacinamide. Breaking the supply chain of this component could affect the availability and prices of cosmetic products, which would affect consumers.
Biotin (B7): Key for the feed industry
Biotin, although uncommon in humans, is essential in poultry farming. Chickens are incapable to absorb biotin naturally occurring in grains, leading to problems with hatching chicks, slowing growth and reducing egg production. Therefore, biotin is simply a key additive for poultry feed. According to Panjiva data, China was the origin of 61.7% of biotin supplies to the US in 2023.
Dependence on China goes beyond these 3 vitamins
U.S. dependence on China is not limited to vitamins. China is besides the main supplier of key active ingredients (API) that are essential for the production of many life-saving medicines. For example:
Penicillin and its derivatives:
- China is liable for a crucial part of the global production of penicillin and its derivatives, which are crucial for the production of antibiotics. The United States does not have adequate infrastructure to produce these substances on a large scale, and the relocation of production to another countries would require immense investments and time.
Metformin:
- Metformin, a medicine utilized to treat kind 2 diabetes, is mostly produced in China. Moving metformin production to the US or another countries is hard due to complex chemical processes and purity requirements.
Vitamin C:
- China dominates the global production of vitamin C, which is essential in both dietary and drug supplements. Vitamin C production requires specialized chemical plants, and most of them are found in China due to low labour and energy costs.
Possible solutions
One solution could be to encourage companies to invest in fresh biological production methods, specified as the usage of micro-organisms to produce vitamins. For example, scientists from Salamanca University and Murcia University survey the anticipation of utilizing fungi for the production of folic acid. akin fermentation methods are already utilized to produce vitamins B2 and B12. The German BASF company has proven that it is possible to produce vitamin B2 on an industrial scale.
US and another Western governments could introduce incentives specified as taxation incentives for investment to accelerate the improvement and commercialisation of these technologies. Companies utilizing these substances could conclude contracts to acquisition future production, guaranteeing request for fresh production methods.
U.S. dependence on China is immense and frequently underestimated. An effort to replace all Chinese supplies by building factories in the US or allied countries would be highly costly and time consuming. Instead, it would be better to make a larger block of countries that could freely trade among themselves, ensuring diversification of supply sources. The larger the block, the greater the chance that consumers' needs – from cream to skin to jet engines – will be met.
Trade policy decisions should be taken with full awareness of these dependencies. Without this, the escalation of the trade war can hit US citizens and another Western countries, especially those who trust on medicines and supplements containing key pharmaceutical ingredients, which present are almost exclusively produced in China or India.
Sources
- Willy C. Shih and Veronica Chua, 3 Essential Vitamins Tell the communicative of U.S. Dependence on China, Harvard Business Review, 26 November 2024.
- U.S. Customs Data – import analysis of folic acid, niacinamide and biotin.
- Panjiva – a tool for analysing commercial data.
- American Feed manufacture Association – reports on vitamin imports.
- U.S. Food and Drug Administration (FDA) – reports on dependence on API import.
- Congressional investigation Service – Analysis on the global pharmaceutical supply chain.
Leszek B. Glass
Email: [email protected]
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