The Illumina Ban and What It Means for Life Science Companies

Amid increasing economic tensions with the United States, China recently announced that it would ban Illumina, a U.S.-based company and the world’s leading producer of gene-sequencing machines, from importing its gene sequencers into the country.¹ The Chinese government’s decision to do so is one of several retaliatory measures China has taken against American companies in response to the United States’ decision to impose additional tariffs on the country. China’s actions raise questions regarding whether it will target other life sciences companies. This alert provides an overview of the Illumina ban, discusses how China may impose restrictions on American companies under such ban, and analyzes how American life science companies may be impacted going forward.

China’s Targeting of Illumina

Overview

Over the last eight years, relations between the United States and China have soured, with both countries imposing tariffs and other economic restrictions on one another.² On February 1, 2025, the United States announced 10% tariffs on all imports from China, which went into effect on February 4.³ Following these tariffs, China imposed its own set of tariffs and placed two companies, including Illumina, on its “unreliable entities list” (“UEL”).⁴ China can impose punitive measures on companies on the UEL list, including restricting these foreign entities from engaging in China-related import or export activities.⁵

On February 21, 2025, the Trump Administration released the American First Investment Policy, which contains policy objectives aimed at limiting economic cooperation with China and other foreign adversaries.⁶ On March 4, the United States then imposed an additional 10% tariff on Chinese imports, along with tariffs on Mexico and Canada.⁷ China responded by imposing duties on American agricultural goods, as well as by adding American companies, primarily defense companies, to the UEL and its Export Control List, which prohibits Chinese export of dual-use items used for both civilian and military applications to these companies.⁸ Most relevant to the life sciences industry, China prohibited Illumina from exporting gene sequencers to China, accusing the U.S. biotech giant of violating market transaction rules by canceling existing customer contracts and discriminating against Chinese companies.⁹ Illumina can still continue to operate in China, such as by supplying customers with reagents and other consumables needed to run Illumina machines.¹⁰

Why Was Illumina Targeted?

The Chinese government may have decided to target Illumina to boost the domestic Chinese biotech and medical device industry. China has made biotechnology a national priority and enacted policies to support domestic companies. The Chinese government has identified biopharmaceuticals and medical devices as key areas of focus and implemented policies to support these industries.¹¹ China has also invested significantly in research and development.¹² As a result of increased Chinese competition from companies such as BGI, Illumina’s revenue in China has declined for the last six quarters.¹³ The restrictions on Illumina thus may be viewed as part of a broader policy trend to shift economic demand to Chinese companies.

The targeting of Illumina has led other American companies to fear that China could sanction them in order to further boost its biotech and medical device industry. That said, there is reason to believe that Beijing is not seeking to punish American biotech or medical device companies more broadly. News reports have indicated that China may have targeted Illumina due to the latter’s alleged lobbying efforts in the United States to restrict Chinese competitors pursuant to the BIOSECURE Act.¹⁴ In September 2024, the House of Representatives passed the BIOSECURE Act, which would have prohibited companies from receiving federal funding if they partnered with a “biotechnology company of concern,” including the following Chinese biotech companies: WuXi Apptec, WuXi Biologics, BGI, MGI and Complete Genomics.¹⁵ This proposed legislation has yet to be enacted into law,¹⁶ but it has been alleged that Illumina lobbied for it to be passed.¹⁷ The Chinese government can place foreign companies on the UEL that discriminate against their Chinese counterparts. Therefore, it appears China might have targeted Illumina due to its perceived efforts to lobby for restrictions on Chinese competitors. In response to being placed on the UEL, Illumina stated that it abides by Chinese laws and welcomes fair market competition.¹⁸

How China Can Target American Life Sciences Companies

Thus far, Illumina is the only biotech or medical device company that China has targeted in its recent set of retaliatory measures. China has targeted several other American companies though, primarily by placing them on the UEL and its Export Control List. This section analyzes these blacklists in more detail, and if and how they can be used to target American life sciences companies.

As discussed above, China’s Ministry of Commerce (“MOFCOM”) first placed Illumina on the UEL before instituting an import ban. MOFCOM released the Provisions on the Unreliable Entity List (the “Provisions”) in September 2020,¹⁹ which establishes a framework for selecting companies for the UEL and outlines MOFCOM’s powers to investigate and sanction such companies.²⁰ Foreign entities may be placed on the UEL if they either (1) endanger China’s national sovereignty, security or development interests or (2) suspend normal transactions with or apply discriminatory measures against Chinese business or individuals. The Provisions also discuss an inter-ministerial “Working Mechanism,” which has the discretion to investigate foreign companies and add them to the UEL. The Working Mechanism can enact the following punitive measures upon companies: (1) restricting or prohibiting the foreign entity from engaging in China-related import or export activities; (2) restricting or prohibiting the foreign entity from investing in China; (3) restricting or prohibiting the foreign entity’s relevant personnel or means of transportation from entering into China; (4) restricting or revoking the relevant personnel’s work permits, status of stay or residence in China; (5) imposing a fine of the corresponding amount according to the severity of the circumstances; and (6) other necessary measures.

In response to the Trump administration’s tariffs, MOFCOM placed Illumina and clothing company PVH on the UEL in February²¹ and ten more companies in March, which are prohibited from importing into or exporting from China or making new investments into the country.²² Illumina is the only life sciences company on the UEL. The other companies on the UEL engaged in activities to which the Chinese government objects, such as selling arms to Taiwan.²³ Therefore, both the language in the Provisions and the set of companies that MOFCOM has blacklisted indicate that the Chinese government uses the UEL to target companies that engage in specific activities opposed to its interest. For the time being, it appears that U.S. life sciences companies will likely not be targeted if they do conduct any actions that are specifically contrary to Chinese national interest or discriminatory against Chinese companies. However, it remains to be seen whether the Chinese government will later construe the Provisions more loosely in order to target a wider set of American life sciences companies.

Takeaways for Life Sciences Companies

Even if U.S. life sciences companies are not themselves targeted by the Chinese government, they should consider and plan for situations where their key partners are. For instance, life science companies should consider how their supply chains may be impacted if either the United States or China decides to target one of their partners in the escalating trade wars. Although for now existing Illumina sequencers can continue to be serviced, companies will need to brace for potential obsolescence of these sequencers if the export restriction is not lifted or Illumina is not otherwise able to supply sequencers, such as manufacturing them within China.

Companies should also consider potential intellectual property disclosure risks. For instance, if Illumina remains on the blacklist and if other non-China-based producers of gene sequencers were to be blacklisted in the future, biotech and pharmaceutical companies seeking gene sequencers would likely need to eventually partner with Chinese counterparts. However, some companies may be hesitant to partner with Chinese biotechnology companies due to concerns that such companies may misuse their know-how or trade secrets or may be added to a list of “biotechnology companies of concern” under the BIOSECURE ACT, if it were to be passed.²⁴ Companies operating in China should plan for situations where they may be effectively forced to partner with Chinese companies.

Lastly, if a life science company is forced to partner with a Chinese company due to the Illumina ban, it will need to consider whether the change in supplier may impact any regulatory filings in China. A company may need to demonstrate equivalence and work with regulatory counsel and scientific teams to assess how the change in its sequencing platform may affect product safety, efficacy and quality.