San Diego’s Illumina placed on China’s ‘unreliable entity list’ following Trump tariffs – San Diego Union-Tribune

San Diego-based gene-sequencing giant Illumina got tangled in the United States’ trade tensions Tuesday as China placed the company on its “unreliable entity list.”

China also placed PVH, an American clothing company that owns brands such as Tommy Hilfiger and Calvin Klein, on the list.

Industry analysts say this move by China is akin to economic sanctions on the American businesses, which limits their ability to conduct transactions and trade in the country. It’s part of China’s broader response to President Donald Trump’s imposition of tariffs this week.

The Ministry of Commerce of the People’s Republic of China said in its announcement that the two businesses “violated the principles of normal market transactions, interrupted normal transactions with Chinese enterprises, and took discriminatory measures against Chinese enterprises, which seriously damaged the legitimate rights and interests of Chinese enterprises.”

This follows Trump’s tariff actions on Tuesday, which increased by 10% on all imports of Chinese made goods. The Chinese government responded with its own retaliatory measures, including 15% tariffs on imports of U.S. coal and liquefied natural gas and restricting access to metals and minerals used for manufacturing semiconductors and missiles.

Additionally, China’s anti-trust regulation agency launched a probe into tech giant Google.

The “unreliable entity list,” or UEL, was implemented in 2020 by China as a sanction with broadly defined terms. It imposes punitive measures on foreign businesses, organizations and individuals that it deems at odds with China’s national security or economic interests.

Puneet Souda, a research analyst for Leerink Partners, wrote in a research note Tuesday that Illumina’s inclusion on the list “appears more permanent posturing by China” rather than retaliatory tariffs on the U.S., which can be rolled back via negotiations.

Overall, he said Illumina’s long-term financial outlook is not reliant on China. He noted that China accounts for roughly 7% of Illumina’s total annual revenue, or about $300 million, though it has continued to decline in that market in recent quarters.

In the note to investors, Souda writes that this decline was expected to continue as Illumina has faced domestic competition with Chinese sequencers MGI and BGI. As evident in China’s latest moves, Souda said Illumina’s revenue is also expected to decline over the long term as policies favor China’s domestic gene sequencers.

“Despite Illumina manufacturing products in Singapore and Taiwan, the Unreliable Entity List might restrict sales,” Souda wrote. “The Unreliable Entity List has been cited as more akin to sanctions versus tariffs and it’s unclear to us if the decision will be reversed.”

The Chinese companies, MGI and BGI, were among five biotech firms targeted in the U.S. Biosecure Act, a bill that seeks to reduce the United State’s reliance on Chinese biotechnology firms that it identifies as a national security threat. The controversial legislation is in limbo.

A spokesperson for Illumina said in an emailed statement that the company continues its commitment to serving global health while it assesses the move by China.

“Illumina has a long-standing presence in China, where we serve the local market through our advances in genomics that help improve human health,” the company spokesperson said. “Wherever Illumina operates, we comply with all laws and regulations. We are assessing this announcement with the goal of finding a positive resolution.”

On Wednesday, Illumina’s stock closed at $124.68 per share, down about 5% from Monday’s closing price of $131.10 per share, the last day of trading before the news broke.

Illumina will report its fourth quarter and 2024 full-year fiscal earnings on Feb. 6 at 1:30 p.m. PST.

Originally Published: February 5, 2025 at 4:28 PM PST