China bans imports of Illumina's gene sequencers right after Trump tariff action

By Andrew Silver

SHANGHAI (Reuters) -China announced a ban on Tuesday on imports of genetic sequencers from U.S. medical equipment maker Illumina, just minutes after U.S. President Donald Trump's additional 10% tariff on Chinese goods took effect.

The ban is part of a series of measures China announced in response to the extra U.S. tariffs and comes after Beijing put Illumina on its "unreliable entity" list in February.

China accounts for about 7% of Illumina's sales. Gene sequencers help determine the sequence of DNA or RNA, allowing scientists to study genetic variations associated with diseases and diagnose rare genetic conditions.

The ban takes effect from March 4.

China's commerce ministry said in a statement that Illumina had suspended normal transactions with Chinese enterprises and taken discriminatory measures against them.

Responding to Reuters queries, Illumina said it would continue to serve its customers in China and was "committed to operating in compliance with the latest guidelines from the Ministry of Commerce".

It said the company was assessing the announcement to fully understand the impact on its operations in China.

Beijing refrained from punishing big U.S. household names, as it did when it retaliated against the Trump administration's February 4 tariffs, but Illumina was the most high-profile company hit by the latest measures from China.

The company has been under growing scrutiny from Beijing, after two of its Chinese rivals, MGI and BGI, were listed in a U.S. bill that aims to restrict business with several biotech companies on grounds of national security. MGI and BGI have denied such allegations.

Illumina's shares slid 2.8% to $81.81 in premarket U.S. trading.

Its business in the country has already been under pressure from stiff competition, with sales in Greater China falling nearly 20% to $308 million last year.

Shares in BGI Genomics, a subsidiary of BGI, jumped 8.4% on Tuesday and MGI Tech, a listed MGI entity, soared by the daily limit of 20%, on prospects for taking market share in China from their U.S. rival.

Nomura revised up its earnings forecast for MGI Tech and estimated the ban could create a potential 750 million yuan ($103 million) business opportunity for the Chinese firm this year.

In February, China also put PVH Corp, the holding company for brands including Calvin Klein and Tommy Hilfiger, on its unreliable entity list and announced an investigation into Google as part of a wide range of measures targeting U.S. businesses.

Companies added to the list can be subject to fines and a broad range of other sanctions, including a freeze on trade and revocation of work permits for foreign staff.

($1 = 7.2782 Chinese yuan renminbi)

(Reporting by Andrew Silver; Writing by Miyoung Kim; Editing by Kim Coghill, Edwina Gibbs and Emelia Sithole-Matarise and Mrigank Dhaniwala)