China to exempt linear accelerators from additional tariffs
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China to exempt linear accelerators from additional tariffs

par John R. Fischer, Staff Reporter | September 17, 2019
Rad Oncology
China will exempt linear accelerators from
additional tariffs that will go into effect
this month
The People's Republic of China may have offered what may be an "olive branch" in its ongoing trade war with the United States, following its decision to exclude medical linear accelerators from additional tariffs on U.S. goods.

Word of the exemption provided a boost to the stock value of linear accelerator manufacturers such as Accuray, Elekta and Varian Medical, all of which may be eligible for a refund from tariffs levied since the implementation of the additional tariffs.

"Both the U.S. and Chinese government realized that radiotherapy is a critical pillar of cancer care and should not be subject to tariffs and the trade dispute between the two governments," Andy Whitman, senior vice president of Government Affairs at Varian, told HCB News. "This is a benefit for cancer patients, allowing them to get needed access to potentially lifesaving treatment."

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The exclusions are retroactive to tariffs that went into effect on July 6, 2018 on $34 billion in Chinese imports, and are due to extend for another year. Their removal also lowers the complete amount in tariffs faced by U.S. medical technology manufacturers, which originally was $836 million.

"We applaud the recent decision to exempt medical linear accelerators," said Josh Levine, president and chief executive officer of Accuray, in a statement. "We believe that this exemption will enable commercial momentum for our joint venture, CNNC Accuray (Tianjin) Medical Technology Co. Ltd, to expand access to our precise, innovative radiation therapy systems for hospitals and patients in China."

An ongoing international dispute since the beginning of 2018, the U.S.-China trade war has resulted in the enactment of tariffs on both sides that have affected the exporting and importing of products from both countries. This includes components and devices in the healthcare sphere such as MR magnets and CT scanners.

Many organizations have called for the Trump administration to help alleviate the matter by establishing and using a timely exemption process. The Trump administration agreed in July to some exemptions by excluding 110 Chinese-made products and items of medical equipment from its 25 percent tariffs placed on $34 billion of Chinese imports on July 6, 2018.

Varian is currently in a quiet period and will release further comments if it believes it is necessary, following an assessment of the impact of this exclusion, including the time and process for any refunds.

The exemption for the LINACs is one of 16 that are set to take effect on September 17.

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