The looming prospect of a trade war with China has led to calls for American and many Western companies with global supply chains to enhance their resilience and decouple from China.
But this is easier said than done. Before taking aggressive actions, it would serve business leaders and policymakers contemplating protectionist measures to understand the breadth of those dependencies. They might be surprised. An unpublished study that we conducted on U.S. imports of three vitamins — folic acid, or B9; niacinamide, or B3; and biotin, or B7 — are good illustrations of a heavy reliance on Chinese imports. This dependence was evident when we examined common ingredients of everyday products found in local grocery stores.
Folic Acid
Since 1998, the U.S. Food and Drug Administration has mandated the addition of folic acid — which is vital for the overall promotion of healthy cell growth and function, especially for women in early stages of pregnancy — to all enriched cereal products. Folic acid is not just in cereals but also in enriched breads, flours, pastas, rice, and other grain products. In 2023, the World Health Organization adopted a resolution promoting food fortification with folic acid to prevent micronutrient deficiencies and associated birth defects of the brain and spine. Folic acid is also a key ingredient in animal feed.
Despite its importance, the United States depends heavily on China for imports of folic acid without scalable alternative sources. According to U.S. Customs data, China supplied 58% of all U.S. imports of folic acid (by number of shipments) in 2023, up from 42% five years earlier. (There is only trade data on number of shipments and not quantities. If you assume that shipments have some average quantity, it is a good proxy.) China is the leading producer of synthetic folic acid; it has a production capacity of approximately 3,000 metric tons per year. According to the American Feed Industry Association, China accounts for approximately 78% of total U.S. imports of vitamins.
The industrial production process for folic acid generates 250 to 300 tons of acidic waste water that is high in ammoniacal nitrogen and inorganic salts for every ton of folic acid produced. The high cost of treating this wastewater led to a reduction in U.S. folic acid production and offshoring production to China. In early 2015, many Chinese manufacturers had to shut down their folic acid production due to the enforcement of two new Chinese environmental protection laws. This led to a global supply shortage and caused prices to soar from 22 per kilogram in the first quarter of 2014 to445 per kilogram the following year. But Chinese companies developed better waste-treatment methods, and the high prices caused Chinese firms to add a lot of new capacity.
The U.S. Department of Commerce recently unveiled its SCALE tool for performing diagnostic supply-chain-risk assessments. This tool uses a weighted aggregation of multiple vulnerability risk scores, and the department graciously agreed to run an assessment of folic acid for us. Its analysis showed a high risk of “adversary dependence,” meaning reliance on countries that the United States should decouple from, though it also suggested reasonable confidence that the overall supply chain could meet demand because imports came from 10 countries. In addition, their SCALE tool showed much higher adversary dependencies for two related products: niacinamide and biotin, which sent us back to the grocery store.
Niacinamide
This vitamin, which has been shown to support a barrier that protects your skin from environmental irritants, UV rays, and moisture loss, is used in many everyday skincare products. It also is a leading ingredient in many other over-the-counter beauty products, including cleansers, sunscreens, serums, and moisturizers. Its properties help address a range of common issues for all skin types including hyperpigmentation, acne, wrinkles, and dryness.
In 2023, the global market for niacinamide beauty products was an estimated $559 million. Major brands that have invested in developing and marketing niacinamide-containing skincare products include Kiehl’s, Olay, Neutrogena, and Estée Lauder. A cutoff of niacinamide imports could have an impact on the pricing and availability of these beauty products over the longer term.
Biotin
Finally, let us turn to biotin. People (and all mammals) cannot produce their own biotin, but since it occurs naturally in everything from eggs and meats to tomatoes, nuts, and French fries, biotin deficiencies in humans are extremely rare.
But chickens cannot absorb the biotin that naturally occurs in wheat and grains commonly used in chicken feed, and a biotin-poor diet leads to abnormalities in hatching chicks, growth reduction, and depressed egg production. Consequently, biotin is a critical feed supplement for chickens. A SCALE analysis, as well as a query of U.S. Customs data using S&P Global Intelligence’s Panjiva tool, suggests that the majority of U.S. needs are imported from China as well. (China was the source of 61.7% of biotin shipments to the United States in 2023, according to Panjiva.)
The Options
One path forward would be for the United States and allied countries to encourage companies to invest in new biological-based (microbial) production methods that would be disruptive to incumbent producers. Every big advance in production processes provides an opportunity to unseat incumbents with new lower cost or better technologies that obsolete their manufacturing operations. Researchers at the University of Salamanca and University of Murcia are experimenting with innovative methods to use fungi as a natural producer of folic acid. Also, fermentation processes have been able to produce vitamins B2 and B12, and researchers have been looking at using or modifying Ashbya gossypii, a fungus related to yeast to make folate. The German company BASF has shown that it can manufacture vitamin B2 at an industrial scale this way.
The governments of the United States and other Western countries could think of mechanisms like investment tax credits or other incentives, and companies using the vitamins in their products could strike offtake agreements to accelerate research and development and commercialization by guaranteeing demand for their outputs. Production incentives provided by the U.S. government could be extended to companies in allied countries, which would diversify the supply base.
Lessons learned
The bigger lesson is that the dependencies on China are vast, and a huge number of them are not known or appreciated. There just would not be enough subsidies or tax incentives that could get companies to build factories in the United States or allied nations to replace everything from China; it would be impossibly expensive. And applying sweeping tariffs to everybody, including allies, would expose even more vulnerabilities as countries search for ways to respond in kind. It would be much better to have a larger bloc of countries that were dependable and who traded freely among themselves. The larger the bloc, the more likely everyone would have their needs covered, from skincare creams to jet engines.
Disengaging from China will be much more complex and expensive than many people realize. Understanding these interdependencies a little better should be a prerequisite to any further escalation of any trade war.
AI总结：
随着与中国贸易战的阴影逼近，许多美国及西方公司呼吁提高供应链的韧性，减少对中国的依赖。然而，这并非易事。在考虑保护主义措施之前，商业领袖和政策制定者需要充分认识这些依赖关系的广泛性，可能会感到惊讶。
我们对三种维生素（叶酸、烟酰胺和生物素）的进口研究表明，美国对中国进口的严重依赖。以叶酸为例，自1998年以来，美国食品药品监督管理局规定所有强化谷物产品必须添加叶酸，这对促进健康细胞生长尤其对孕妇至关重要。尽管其重要性，美国在叶酸进口上对中国的依赖达58%，而不到五年前这一比例为42%。
在生产过程中，叶酸的工业生产产生大量高含氨氮和无机盐的废水。这导致美国叶酸生产减少，转移至中国。2015年，因中国环保法规的实施，许多中国生产商暂停了叶酸生产，造成全球供应短缺，价格飙升。随后，中国企业改善了废水处理技术，使其生产能力大幅提升。
美国商务部的SCALE工具进行供应链风险评估，结果显示在叶酸的供应链中存在高风险的“对手依赖”。此外，烟酰胺和生物素的依赖程度更高。
烟酰胺广泛用于护肤品中，全球市场价值约为5.59亿美元。生物素则是鸡饲料的重要补充，而美国鸡只主要依赖中国进口的生物素。
未来的解决方向之一，是美国及其盟国鼓励企业投资新型生物基生产方法。在联邦政府的支持下，可能会促进研发，确保对这些维生素的需求。
总体来说，对中国的依赖是显著的，且许多依赖关系尚未觉察。单靠补贴和税收优惠不足以替代中国的生产。与其施加广泛的关税，不如建立更可靠的贸易伙伴关系以降低风险。从中国脱离的过程将比许多人想象的要复杂与昂贵，深入了解这种相互依赖的关系是任何贸易战升级的前提。