The future: Making Medicines in your kitchen?

Source: New York Times

Synthesizing drugs in a cooking kitchen is usually reserved for dangerous drug dealers or characters in the popular crime/drama show 'Breaking Bad.'  Although, in China, last November, the New York Times reported on the shortage of drugs which has driven those desperate for medications to resort to drug synthesis in kitchen's (as shown above) and described below:

Zhang Zhejun used a fat plastic straw to gently tap the pale yellow pharmaceutical powder onto a piece of silver foil that lay on an electronic scale. He made sure the amount was just right before he poured it into a clear capsule.

When you’re making cancer drugs at home, the measurements must be precise.

Mr. Zhang has no medical experience and no background in making drugs professionally. He did this out of desperation. His mother suffered from lung cancer and required expensive drugs that China’s ambitious but troubled health care system couldn’t provide.

He was aware of the risks. The drug he was making hadn’t been approved by regulators in China or the United States. Mr. Zhang had bought the raw ingredients online, but he wasn’t sure from whom, or whether they were even real.

As described in the article cited above, the prices of medications are driven by a crisis in health insurance coverage in China.  Since drugs have been synthesized in the kitchen by many around the world over decades (illegally I might add), one is left to wonder with the advances in technology, how far off are we from synthesizing drugs in a kitchen?  Why would I ask such a question?



As technology increases in the pharmaceutical sector along with advancing nanotechnology, the prospect of making pharmaceutical (drugs) might soon be possible from within your kitchen. What?  Yes, you heard me correctly.  Until a few days ago, I was unaware of the fact of the possibility also.  I was catching up on old blog posts on the National Institutes of Health website.  Specifically, the Director of the National Institutes of Health personal blog site -- which is awesome I might add.



After reading the blog post discussed below, I remembered the article cited above from the New York Times.  I just had to connect the two for a blog post.  And here we are.  According to the Director's blog page for the National Institutes of Health, new research and emerging technology called Integrated Scalable Cyto-Technology (InSCyT) as described below:

Today, vaccines and other protein-based biologic drugs are typically made in large, dedicated manufacturing facilities. But that doesn’t always fit the need, and it could one day change. A team of researchers has engineered a miniaturized biopharmaceutical “factory” that could fit on a dining room table and produce hundreds to thousands of doses of a needed treatment in about three days.

As published recently in the journal Nature Biotechnology, this on-demand manufacturing system is called Integrated Scalable Cyto-Technology (InSCyT). It is fully automated and can be readily reconfigured to produce virtually any approved or experimental vaccine, hormone, replacement enzyme, antibody, or other biopharmaceutical. With further improvements and testing, InSCyT promises to give researchers and health care providers easy access to specialty biologics needed to treat rare diseases, as well as treatments for combating infectious disease outbreaks in remote towns or villages around the globe.

In today’s commercial manufacturing facilities, biologic therapies used to treat cancer, cardiovascular disease, and many other disorders are made in huge vats, in which harmless bacteria, yeast, or mammalian cells churn out large quantities of a single product. But researchers, led by NIH grantee J. Christopher Love, Massachusetts Institute of Technology (MIT), Cambridge, have recognized a growing need to design a new kind of manufacturing system, capable of producing a wide variety of clinical-grade products on an as-needed basis.

Dr. Collins continues on in the blog post to describe the simple 3-step modular process: Production, Purification, and Formulation.  The three module system is interconnected and as described in the introduction could potentially fit onto a kitchen or dining room table.  Currently, the researchers were able to produce (synthesize) Human Growth Hormone (HGH).  Of course, this was due to the extensive knowledge surrounding HGH by the scientific community.



Other synthetic compounds were listed.  Typical process development times are at around 12 weeks to fully develop a process for medication.  The amount of doses possible to synthesize in a given week are an astounding 100.  Yes, with this modular set up, the prospect of synthesizing 100 doses in a single week is supposedly being reported.



Currently, the process is composed of plastic bottles, vials, and instruments linked with plastic tubing.  In the future, researchers hope to make the system more user-friendly for the non-chemist in the house.  Does this research line up with where we are as a society?



Shows like 'Breaking Bad' tells us that synthesis is dangerous but a potentially profitable business if you are willing to take the risk.  On the flip side, if the residents in the United States were confronting the crisis in resourcing their medications like those in China are, where are we left to be?  Add to that, the changing academic landscape which is moving more courses from a traditional lecture based room to an online platform - such as "MOOC" - Massive Open Online Courses.



A cursory search for home ready lab class kits reveal a couple of contenders.  First up is a company called "Hands On Labs."  Shown below is an overview video of the product/platform:

The company has been successfully providing lab experiments to universities and people from 1994.  Of course, that is not to say that 'Hands On Labs" has been shipping chemistry labs to individual houses for instruction since 1994.  Individual shipping has kept pace with the development of the 'Massive Open Online Course' platform.  More and more universities are leaning or being nudged to adopt a version of this curricula as technology improves and education changes.  Visit 'Hands On Labs' website for greater detail.



Next up is a competitor company is 'Carolina Biological Supply Company' with a website filled with kits ready for purchase and soon to be shipped immediately after.  Here is an introductory video shown below:

The company was founded by professors as indicated on their 'Wikipedia' page.  For those interested in looking into greater detail into Carolina Biological Supply Company, access their website by clicking here or their YouTube Channel by clicking here.  The range of experiments and samples offered by these companies really gives a person a sense that the university is rapidly disappearing. Not so...at least for the moment.



There still exists a large array of common experiments which cannot be 'outsourced' to an individual's home for self application.  Hazardous chemicals which work extremely well in certain synthetic routes still need to be professionally handled by trained staff members at the university.  Although, one could argue that the production of such kits is great for one reason alone.  Production of laboratory kits with experiments which illustrate principles taught in first and second year chemistry course will improve science overall.  What do I mean by this?



As the world changes toward more sustainable living conditions, corporations will eventually have to find 'greener' substitutes for harsher (corrosive) chemicals.  Products from companies listed above give us hope that the transition is already being considered.  Any shipped chemistry experiment has the potential to turn a kitchen or workspace inside a house into a disaster zone if improperly handled.  Therefore, the researchers/producers of such kits need to consider every possible misuse of their products by the average user.



In turn, this discovery/consideration forms the impetus for a transition inside of corporations to change toward more environmentally friendly chemicals in their commercial synthesis.  Lab kits like those above are exciting and show the range of possibilities when good scientists put their thinking caps on and think critically toward alternatives which are safe for the consumer and safe for the environment.  Hopefully, no American resident finds himself/herself in a position as described in the New York Times article above -- synthesizing medication in their kitchen out of necessity.  Although, if they do, at least commercial products which have been introduced above will provide a platform for success.



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How has Apple been impacted by trade tensions with China?

Source: Wired

Anyone looking for positive news regarding trade with China might want to move onto another site.  Not that I intentionally want to sound negative regarding trade between the United States and China.  Quite the contrary, I would love to report great news regarding trade -- if there were some to report.  Unfortunately, the United States is in a period of 'stagnation' with China over trade tensions.   Which have caused adverse impacts on the Soybean industry and Cherry industry -- as highlighted on this site in the past few months.  Cherries and Soybeans are not the only industries which have started to feel the impact of trade tensions between China and the United States.  These tensions are highlighted in the anxieties noticeable in a recent 'letter' to investors by Apple CEO Tim Cook:

January 2, 2019

To Apple investors:

Today we are revising our guidance for Apple’s fiscal 2019 first quarter, which ended on December 29. We now expect the following:

 1) Revenue of approximately $84 billion

 2) Gross margin of approximately 38 percent

 3) Operating expenses of approximately $8.7 billion

 4) Other income/(expense) of approximately $550 million

 5) Tax rate of approximately 16.5 percent before discrete items

We expect the number of shares used in computing diluted EPS to be approximately 4.77 billion.

Based on these estimates, our revenue will be lower than our original guidance for the quarter, with other items remaining broadly in line with our guidance. 

While it will be a number of weeks before we complete and report our final results, we wanted to get some preliminary information to you now. Our final results may differ somewhat from these preliminary estimates. 

When we discussed our Q1 guidance with you about 60 days ago, we knew the first quarter would be impacted by both macroeconomic and Apple-specific factors. Based on our best estimates of how these would play out, we predicted that we would report slight revenue growth year-over-year for the quarter. As you may recall, we discussed four factors:

First, we knew the different timing of our iPhone launches would affect our year-over-year compares. Our top models, iPhone XS and iPhone XS Max, shipped in Q4’18—placing the channel fill and early sales in that quarter, whereas last year iPhone X shipped in Q1’18, placing the channel fill and early sales in the December quarter. We knew this would create a difficult compare for Q1’19, and this played out broadly in line with our expectations.

Second, we knew the strong US dollar would create foreign exchange headwinds and forecasted this would reduce our revenue growth by about 200 basis points as compared to the previous year. This also played out broadly in line with our expectations.

Third, we knew we had an unprecedented number of new products to ramp during the quarter and predicted that supply constraints would gate our sales of certain products during Q1. Again, this also played out broadly in line with our expectations. Sales of Apple Watch Series 4 and iPad Pro were constrained much or all of the quarter. AirPods and MacBook Air were also constrained.

Fourth, we expected economic weakness in some emerging markets. This turned out to have a significantly greater impact than we had projected. 

In addition, these and other factors resulted in fewer iPhone upgrades than we had anticipated. 

These last two points have led us to reduce our revenue guidance. I’d like to go a bit deeper on both. 

Emerging Market Challenges

While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.

China’s economy began to slow in the second half of 2018. The government-reported GDP growth during the September quarter was the second lowest in the last 25 years. We believe the economic environment in China has been further impacted by rising trade tensions with the United States. As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed. And market data has shown that the contraction in Greater China’s smartphone market has been particularly sharp.

Despite these challenges, we believe that our business in China has a bright future. The iOS developer community in China is among the most innovative, creative and vibrant in the world. Our products enjoy a strong following among customers, with a very high level of engagement and satisfaction. Our results in China include a new record for Services revenue, and our installed base of devices grew over the last year. We are proud to participate in the Chinese marketplace.

iPhone

Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline. In fact, categories outside of iPhone (Services, Mac, iPad, Wearables/Home/Accessories) combined to grow almost 19 percent year-over-year. 

While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also were not as strong as we thought they would be. While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements. 

Many Positive Results in the December Quarter

While it’s disappointing to revise our guidance, our performance in many areas showed remarkable strength in spite of these challenges. 

Our installed base of active devices hit a new all-time high—growing by more than 100 million units in 12 months. There are more Apple devices being used than ever before, and it’s a testament to the ongoing loyalty, satisfaction and engagement of our customers. 

Also, as I mentioned earlier, revenue outside of our iPhone business grew by almost 19 percent year-over-year, including all-time record revenue from Services, Wearables and Mac. Our non-iPhone businesses have less exposure to emerging markets, and the vast majority of Services revenue is related to the size of the installed base, not current period sales. 

Services generated over $10.8 billion in revenue during the quarter, growing to a new quarterly record in every geographic segment, and we are on track to achieve our goal of doubling the size of this business from 2016 to 2020.

Wearables grew by almost 50 percent year-over-year, as Apple Watch and AirPods were wildly popular among holiday shoppers; launches of MacBook Air and Mac mini powered the Mac to year-over-year revenue growth and the launch of the new iPad Pro drove iPad to year-over-year double-digit revenue growth. 

We also expect to set all-time revenue records in several developed countries, including the United States, Canada, Germany, Italy, Spain, the Netherlands and Korea. And, while we saw challenges in some emerging markets, others set records, including Mexico, Poland, Malaysia and Vietnam.

Finally, we also expect to report a new all-time record for Apple’s earnings per share.

Looking Ahead

Our profitability and cash flow generation are strong, and we expect to exit the quarter with approximately $130 billion in net cash. As we have stated before, we plan to become net-cash neutral over time.

As we exit a challenging quarter, we are as confident as ever in the fundamental strength of our business. We manage Apple for the long term, and Apple has always used periods of adversity to re-examine our approach, to take advantage of our culture of flexibility, adaptability and creativity, and to emerge better as a result. 

Most importantly, we are confident and excited about our pipeline of future products and services. Apple innovates like no other company on earth, and we are not taking our foot off the gas.

We can’t change macroeconomic conditions, but we are undertaking and accelerating other initiatives to improve our results. One such initiative is making it simple to trade in a phone in our stores, finance the purchase over time, and get help transferring data from the current to the new phone. This is not only great for the environment, it is great for the customer, as their existing phone acts as a subsidy for their new phone, and it is great for developers, as it can help grow our installed base. 

This is one of a number of steps we are taking to respond. We can make these adjustments because Apple’s strength is in our resilience, the talent and creativity of our team, and the deeply held passion for the work we do every day.

Expectations are high for Apple because they should be. We are committed to exceeding those expectations every day.

That has always been the Apple way, and it always will be.

Tim

After Apple CEO Tim Cook released this letter to investors the stock took a hit of 10%.  Tim Cook still tries to stay optimistic despite parameters which directly impact his company are under the control of the Trump administration.  There has been buzz in the news lately regarding this potential problem.  Is a real solution in sight?  I am not one to speculate -- so the question remains open ended.


Conclusion...



Regardless, trade tensions cannot keep going on between China and the U.S. -- otherwise, more industries will start to feel real pain.  According to economists, the amount of money at stake is small compare to the rest of the economy.  Although, the few industries (sectors) which have had a negative impact on business cause a stir in important industries (smartphones being one?).  Additionally, China plays a huge role in the assembly of smartphones (and other smart devices) for the United States.  Precious metals are mined in the United States.  The unprocessed ore is sent to China to be processed for the  eventual incorporation into smartphones along with other digital devices (Apple, Samsung, etc.).  The United States does not have the capability (processing plants) set up to do the work here.  Nor are there any immediate plans (in congress) to build any back up into the system.  There was discussion last year on the sense of urgency of having our own (independent) processing plants as back up in the case of situations like the present (i.e. trade tensions).



Therefore, a healthy trade relationship with China is sought out for the United States.  And no, that does not mean that the U.S. closes trade deficits with China or other Countries.  Global trade is based on the fact that the United States will not necessarily have monetary gains but positive benefits in other areas.  Be those extra provisions which were previously built into the TPP (Trans Pacific Partnership) or NAFTA (North American Free Trade Agreement), or other agreements.  The inherent benefits are often far from direct financial gains.  Trade relations should be restored between the U.S. and other countries as soon as possible.  Holding out for a better deal is only looking to lose more -- as has been shown already with TPP.



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Trade War Hurts Farmers -- From The Farmer's Mouth Directly

"Trade Not Aid" -- The Answer For Trade War!

Soybean Farmers Are Storing Too Much Soybean, Although Chemical Industry Is Greenlighting Trade Deals?

Source: Post Bulletin

Depending on your exporting destination or importing origin along with the industry type, the response to the Trump Administration's tariffs program and emerging trade war is different.  For the chemical industry which heavily relies on good relations with local (North and South) neighboring countries, life is acceptable - as reported recently in the chemical news.  At the same time, if you are a soybean farmer or a farmer who relies on storing product in elevators for an extended period of time, trouble is approaching quickly due to trade coming to a 'stand still'.   The two different scenarios are listed below - briefly.

Soybean Storage?

Early on after trade tariffs were set to take effect, I wrote a blog post discussing (briefly) the benefits of global free trade.  In which, I highlighted the obvious fact that all commodities are connected to each other in some manner. Recently, the news site 'Politico Agriculture' has shed light on the connectivity which the trade industry relies on:

HIDDEN TRADE WAR IMPACT: CROP STORAGE SHORTAGE: Retaliatory tariffs have weighed down commodity prices for months. With the harvest well underway, the trade dispute with China is dealing another blow to U.S. soybean producers: a shortage of space in grain elevators that's causing major backups in states like North Dakota, Minnesota and Louisiana — and driving down prices even more.

China, the biggest market for U.S. soybeans, slapped 25 percent duties on the crop in retaliation for President Donald Trump's tariffs on Chinese high-tech products. Now it's effectively closed for business to American soy growers. Some farmers are gathering more soybeans than they can sell or store, jam-packed silos are running out of room, and the trains that usually carry soybeans to the Pacific Northwest for shipping to China aren't moving.

"In Southwest Minnesota and the Dakotas, you now have elevators that are storing all their beans because there's no market to the West. There is absolutely no bid," said Bill Gordon, a farmer in Worthington, Minn., and member of the American Soybean Association board of directors.

Gordon said some storage sites are piling corn outside to make room for soybeans, and that his local grain elevator is expected to be full after just one week of the month-long harvest.

Cash prices falling: The demand for storage space is also widening the gap between the market commodity price for soybeans and the cash price farmers receive for their crops at the elevator. Grant Kimberley, director of market development for the Iowa Soybean Association, said the drop-off — or "basis" — is normally 30 to 50 cents per bushel in central Iowa. Now it's about $1 per bushel.

Downstream problems: There's also a surge of Midwestern crops being shipped down the Mississippi River to New Orleans, where they're sold to Europe, South America and elsewhere. That's putting extra strain on growers and exporters in Louisiana.

"Everything is choking up right here on the Mississippi River on the barges and the elevators," Abraham said. "Every elevator that we have is full of soybeans right now and can literally take no more on."

Soybeans are taking up space which might be used for other crops which need to be stored too.  The states being affected - North Dakota, Minnesota, and Louisiana - have around 130,000 farms (combined in 3 states).  Not all of those farms serve the soybean industry.  Although, that enormous number of farms could be impacted by the connectivity to other crops which need to use the same storage space used temporarily for soybean crops held up by trade tariffs.



On top of the elevators being filled up are the barges (storage boats) which are filled up with soybeans being transported to other states to be stored.  Shown below is an example of a barge filled with soybean being filled.  Just think of all the transportation, space, and time -- which equates to money burned -- waiting to be moved, stored, or shipped.  All of the jobs which are on hold due to trade tariffs.  Not cool.

Source: Feed Stuffs

Additionally, the mere fact that China can just shut down and refuse any crops from the United States shows how reliant the United States is on other countries.  Which is dangerous to say the least.  Our reliance to other countries for crop sales or technology processing is becoming a major issue which going forward into the future will have be heavily weighed by those in elected office who make the large decisions in Washington D.C.



Although, they are elected positions therefore, your input is imperative in driving their respective vote.  With that being said, keeping up with the status of trade talks and disenfranchised farmers is important in moving forward participating in democracy.  Below, the conversation shifts from grave concern now to the chemical industry.  The chemical industry is quite pleased with the changes - which is strange.

Chemical Industry Is Good!

As I mentioned in the introductory paragraph, the chemical industry is one which has flourished since a deal has been arrived at between Canada, Mexico and the United States.  According to the Chemistry trade journal 'C&E News' titled "U.S. chemical industry reacts positively to revised trade pact with Canada, Mexico" the deal is being cast in a positive light:

The U.S.-Mexico-Canada Agreement (USMCA) is an overhaul of the 24-year-old North American Free Trade Agreement (NAFTA), which underpins $1.2 trillion in total trade between the three countries.

The trilateral accord is critically important to U.S. chemical manufacturers because Canada and Mexico are the industry’s two largest export markets. Approximately 46,000 chemical industry jobs in the U.S. now depend on trade between the North American neighbors.

Although ACC and its member companies are still reviewing the provisions of the updated trade pact, the industry group says the agreement “appears to include several enhancements long sought-after by the U.S. chemical sector,” including greater regulatory cooperation.

That is not to say that other industries reliant on chemicals and pharmaceuticals are not hurting with the trade war emerging with other international countries.  Noted in the article above that 46,000 jobs depend on trade.  That is just one single industry - chemical industry.  Imagine all other industries across the board which contribute to global trade which are being negatively impacted.  The total amount of jobs which are tied to the trade of those industries.  When all is considered, the numbers are enormous and difficult to comprehend.

Conclusion...

Just today in 'Politico Agriculture' was the following news:

TRADE DISPUTES LOOM OVER GLOBAL FOOD SECURITY: Trade protectionism and climate change are among the factors weighing on international food security, according to the Economist Intelligence Unit's Global Food Security Index, a benchmark used to measure individual countries' level of food security.

The report, released Tuesday by EIU and DowDuPont's Corteva Agriscience, cited China's retaliatory tariffs on U.S. soybeans as an example of trade turmoil that can raise prices for consumers and hit low-income families the hardest.

"Protectionist trade policies can contribute to world food price increases and limit agricultural competitiveness," EIU wrote.

The benchmark has the U.S. tied for third place with the United Kingdom — and down in the rankings for the second year in a row. The result doesn't indicate a worsening situation in the U.S. but, rather, slower progress on food issues than other nations. Singapore ranks No. 1, followed by Ireland in second. The Netherlands rounds out the top five.

In light of the news above, get ready for prices to change due to changing demand both internationally and within our nation.  As highlighted, each of these avenues of export are tied to one another in some manner.   Typically, the thought of total impact never crosses each of our minds.  That needs to change with the changing times.



Instead of thinking in terms of an 'isolationist' country, the United States needs to again open up trade avenues to disseminate the crops which are stored and hindering profit margins of families (farm families) along with all of the other players in the trade game: tractor drivers, truckers, dock workers, mariners - captains of ships, ship manufacturers, shipping companies, traders, diplomats, local store owners, foreign store owners, Chinese supply chain.  All of these players have families to support.   Not to mention the amount of energy needed to move goods across supply routes nationally and internationally. 



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Parameters: How many sticks of butter are contained in 7.5 million pounds of butter?


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Parameters: Trade Tariffs Will Affect International Science


Parameters: Steel And Aluminum Tariffs Are Not Isolated - They Are Tied To Trading Of Other Vital Goods


Parameters: Tariffs Affect Trade In Both Directions -- In And Out Of The USA

Parameters: Trade Tariffs Will Affect International Science

Source: University of Pennsylvania 

I have written about trade before on this site.  First, about the potential benefits of 'global free trade' which can be found here.  Second, how the trade tariffs set to hit in recent weeks will affect a whole range of commodities (i.e. products, crops, etc.) which can be found here.  Recently, in the journal 'The Scientist' in an article titled "New US-China Tariffs Could Affect Science" written by Diana Kwon, the potential negative impacts to international science is laid out succinctly.  In the excerpt below, I include the entire article (not too long) to avoid butchering the piece with my own opinion.


Without further ado, here is the article shown below:

On June 15, the Office of the United States Trade Representative released a list of 818 Chinese imports that would be subject to an additional 25 percent tariff starting on July 6. These include products used in scientific research, such as microscopes and parts used in X-rays, magnetic resonance imaging (MRI) scanners, and other imaging devices. While the effect that these tariffs will have on researchers is still unclear, some policy experts worry that President Donald Trump’s policies may impede scientific collaboration and talent flow between the two countries.  

Brian Xu, a toxicologist with The Acta Group, a scientific and regulatory consulting firm, says that because China exports relatively few high-quality scientific instruments, the tariffs on those products are unlikely to have a large effect on researchers in the U.S. However, he notes that Chinese companies produce many synthetic chemicals used by pharmaceutical and biotech companies in the U.S. “If there are tariffs [placed] on those, that’s certainly going to increase costs,” Xu says.  

According to the Trade Representative office (USTR), Trump’s administration is implementing the new tariffs to address the results of an agency investigation, which found China guilty of unfair trade practices. “China’s acts, policies and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory, and burden U.S. commerce,” USTR says in a June 15 statement. 

China immediately retaliated to the US government’s announcement with a list of 545 US exports that it would slap additional taxes on starting next week, along with an additional 114 products—including chemicals and medical equipment—under consideration for additional tariffs.  

Some scientists in the U.S. have expressed concerns to Nature about the potential increase in research equipment costs as a result of the tariffs. But whether the tariffs will have noticeable effects for researchers remains to be seen. 

Scientific organization in the U.S. do not yet see cause for alarm. “At this point, it is unclear what impact this may have on the research ecosystem here in the US, and to date, we have not heard from any ACS [American Chemical Society] members or their respective organizations on this topic,” Glenn Ruskin, the director of ACS External Affairs and Communications, writes in an email to The Scientist. “It is a developing situation and one that we will be watching.”

Likewise, Tom Wang, the chief international officer at the American Association for the Advancement of Science (AAAS), says that “it’s hard to say right now what the direct impact [of the tariffs] will be.” Wang adds that while it will be important to keep an eye on the products used the research community, at this point, the full extent of the tariffs that the U.S. will place on foreign products—and the retaliatory tariffs that may come as a result—is still unknown. 

On the other side of the tariffs, in China, worries are also reserved. Yibing Duan, a science and technology policy researcher at the Chinese Academy of Sciences, tells The Scientist in an email that the potential for the tariffs to increase the cost of research in China is not a big concern, because products bought from the U.S. for scientific purposes “could be imported from the E.U., Japan, and other developed nations.” 

There is, however, fear that the economic dispute between the U.S. and China may intensify. USTR has also released a second set including 284 products that may be subject to additional tariffs. (The agency declined The Scientist’s request for comment.) “Contrary to what the Trump administration has said, trade wars are not easy to win,” says William Hauk, a professor of economics at the University of South Carolina. “They have a tendency to escalate with tit-or-tat measures, and this could start affecting a broader range of products.” 

Spill-over effects  

Duan tells The Scientist that although he does not currently see the new tariffs as a serious concern for research, a trade war between the U.S. and China could create a distrustful environment that may stifle intercountry relationships in the areas of science and technology. 

Wang adds that other moves by the Trump administration, such as the tougher restrictions on visas for Chinese students studying in the U.S., may also reduce scientific cooperation between the two countries. Together, these kinds of policies could have a “chilling effect on collaboration, access to technology, and access to knowledge and talent,” Wang says. 

Hauk notes that, if the US-China trade war escalates, there could be additional restrictions placed on student visas, as well as H1B visas, which allow US companies to hire foreign workers. 

“The argument made by some in this administration is that somehow the U.S. is not the beneficiary of the talent, the knowledge, or the technology from other places, but that the U.S. is giving this away to other countries,” Wang tells The Scientist. “But I think that’s not reflective of how the US scientific system works, in which we do benefit from working with [foreign] people, technologies, and companies.” 

There is more at risk than just products.  Additional risk can be classified as 'services' which I discussed briefly in the previous blog post on trade.  Furthermore, students from China travel abroad to the United States to receive a graduate education mostly to return to China for future work. Although, the United States pharmaceutical industry along with the technology sector do hire and hold onto a large portion of these visiting scholars.  I was in a research lab with international students during graduate school and wrote briefly about the benefit to U.S. science of having diversity in the research lab setting - which can be found here.



Last week, after Independence Day, returning to work, I encountered a colleague who returned back home to visit to China after the end of last semester.  She was frustrated with her travel back to the U.S. on the China side.  Her visa was scrutinized by customs which held up the process for a couple of weeks.  Which translates into a hold on her research here in the United States.  This is normal for visiting scholars in the United States.  But for professors here trying to earn tenure at an academic institution, the delay is critical toward professional advancement.



She remarked that there were much fewer applications to travel abroad - which is a result of harsher immigration laws by the Trump administration (read here). Still, the process was held up on China's side.  The exact reason still remains unknown to this day.



Conclusion...



Overall, trade with China is important.  As I mentioned, more than products are traded and at risk with current negotiations.  The international political scene seems to be interfering with the field of science along with many others.  The potential negative fall out or adverse impact is that the United States could fall behind in output at the research level and technology transfer level.  If China holds potential imports to the United States such as vital chemicals used in research, this in turn directly impacts researchers ability to further advance the U.S. science arena -- which is bad.





More blogs can be found here:


Parameters: Tariffs Affect Trade In Both Directions -- In And Out Of The USA


Parameters: One Parameter Change In The Trade Machine Leads To A 'Re-Adjustment' Of Another


Parameters: Steel And Aluminum Tariffs Are Not Isolated - They Are Tied To Trading Of Other Vital Goods


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Parameters: Tariffs Affect Trade In Both Directions -- In And Out Of The USA

Source: War Is Boring

Trade is a complicated matter. With that being said, trade occurs between countries and countries benefit from the global trade system.  In a previous blog post on this site, I have stressed the importance of thinking in a 'global fashion' when discussing trade.  The possibility of isolating certain imports/exports such as steel and aluminum is not possible without negatively impacting other traded products.  In the blog post below, a few of the various 'connected' products which are being negative impacted (higher priced commodities) are highlighted below.

Warnings Before The Storm

Recently, there has been a considerable amount of news coverage concerning the trade tariffs which are being implemented by the Trump administration.  The tariffs are supposedly under the umbrella of 'protecting national security.'  Really?  What is really at stake is the relationships that have been formed over decades of bilateral/multilateral agreements.  Here are the latest few e-mails from 'Politico' news journal regarding the unfolding tariffs set to take place over the last few weeks.



According to 'Politico Energy' (last week Monday) China is planning on implementing tariffs on us too as shown below:

CHINA THREATENS ENERGY TARIFFS: The Beijing government released a target list Friday of 25 percent tariffs it says it is ready to impose if the U.S. carries out a second round of duties on Chinese goods. On the list, Pro's Ben Lefebvre reports, is a host of energy products, including shipments of U.S. oil, coal and petrochemicals. China is the third-largest customer for U.S. oil behind Mexico and Canada.

If the tariffs are enacted, U.S. oil exporters Exxon, Chevron and others would have to search for new customers, said Andy Lipow, president of consulting service Lipow Oil Associates. "China would have to buy additional quantities of oil from someone else, and the U.S. would have to look for new customers, presumably someone who lost sales from the Chinese," Lipow said. "But the imposition of tariffs can lead to a wider trade war, which ultimately slows economic growth around the world and reduces demand for fuel." More here from Ben, and more from Pro's Victoria Guida on the proposed tariffs here.

Following on Tuesday (last week), an email from 'Politico Energy' highlights OPEC and trade tariffs as shown below:

ON OPEC: Harold Hamm, founder and CEO of Continental Resources, canceled his scheduled appearance at this week's OPEC meeting in Vienna, a company spokeswoman told Reuters, saying the event didn't fit Hamm's schedule. But Reuters reports: "Hamm is the third of five U.S. shale executives to withdraw from a scheduled speaking slot at the OPEC meeting in Vienna." His withdrawal follows an intensifying trade dispute between China and the U.S., with China imposing $50 billion in tariffs on U.S. crude oil and other goods, Reuters reports. Continental has been a key supplier of crude oil to China — whose market may tilt toward OPEC suppliers in the absence of U.S. oil.

Separately, analysts at Goldman Sachs say they still expect oil prices to increase above $80 a barrel over the coming months, despite the trade tensions and concern over higher OPEC production, CNBC reports. The analysts said the possibility of OPEC producers announcing an increase to crude production levels could actually have a bullish impact on prices.

Ahead of the meeting: New analysis from French think tank Institut Français des Relations Internationales highlights 10 "OPEC+" oil producers and the extent to which they've been economically hit by lower prices. With the exception of Venezuela, leading producers managed to "navigate through the storm of lower oil prices" during the 16-month down market, but now may want to cash in and raise production, the analysis found. Read it here.

The two excerpts above now indicate that there is a greater threat to other relationships besides the trade partners in question - bilateral agreements.  This further exemplifies that more 'goods' or 'products' are tied to one another.  Then on Wednesday (last week), in an e-mail from 'Politico Agriculture', readers were given some insight into an exchange between Commerce Secretary Wilbur Ross and congressional leaders as shown below:

ROSS GETS EARFUL ON TRUMP TARIFFS: Finance Committee senators blasted Commerce Secretary Wilbur Ross on Wednesday for the damage done to the U.S. agricultural sector by foreign retaliation to the administration's steel and aluminum tariffs. American farmers "are bearing the brunt of retaliation for these actions," Chairman Orrin Hatch said during the hearing. "I just don't see how the damage posed on all of these sectors could possibly advance our national security."

Warnings about economic harm: Sen. Ron Wyden (D-Ore.) cited complaints from Oregon potato growers and Pacific Northwest cherry growers "who have got nearly 1.5 million boxes of cherries ready to ship to China. They're worried those cherries are going to end up stuck on the dock or rotting in a warehouse due to China's retaliation,"

Not buying national security line: Sen. Chuck Grassley (R-Iowa) noted that market volatility can also make it more expensive for companies to invest in commodities to balance out the risk of other holdings. "I wish we would stop invoking national security because that's not what this is about," Sen. Pat Toomey (R-Pa.) said. "This is about economic nationalism."

The goal is more free trade: Ross said the administration has "no control over what another country does in retaliation," but argued the president's most recent threat to impose tariffs on another $200 billion in Chinese products was designed to discourage further escalation. The administration's aim, he said, is to have more free trade — not less. "The president's objective is not to end up with high tariffs, and his objective is not to end up in a trade war," Ross said. "His objective is to get to a lowering of barriers, both tariffs and non-tariff ones, and to protect intellectual property. ... The purpose of this is to get to an endgame that is much closer to free trade than what we've been before."

What about farmers? But Sen. Michael Bennet (D-Colo.) blasted Ross for not articulating a vision of how agricultural producers would be protected. "I don't think you're going to have any backstop for our farmers and ranchers, and to blindly pursue these policies without considering what happens to them I think is a huge mistake," he said.

Grassley wants nothing to do with handouts: Sen. Chuck Grassley had told reporters during his weekly ag briefing Monday that Trump pointed to Agriculture Secretary Sonny Perdue before telling a group of governors and congressional lawmakers that the federal government would subsidize any losses faced by farmers due to tariffs. "That's not what my farmers in Iowa want — help from the federal treasury," Grassley responded. He reiterated his displeasure about the idea to Ross at the hearing.

How can Commerce Secretary Wilbur Ross actually state with a straight face that the tariffs are designed to move the nation closer to 'free trade' than before?  This does not make sense at all.  Why?  What the administration does not take into account is that the overall benefits of global free trade on all parties (nations) in the world?  In an earlier post, I pointed this obvious aspect out.



The current administration believes that the possibility exists to make money on free trade with tariffs.  Over the last few weeks, threats have been made by other countries to level the playing field and enforce trade tariffs on exports/imports coming from the United States.  The result will be the following as has been reported in the news so far as shown below:


1) According to the New York Times, nails used for construction will increase at least 20% in price, a 20% duty has been imposed by the European Union on imported Whiskey from the U.S., a 25% tariff by China will be imposed on Lobsters, along with unknown losses for both the Peanut Butter industry, and Cranberry industry.


2) According to economic analyst Steve Ratner on Morning Joe, the price of soft wood lumber has increased 27%, which translates to the added cost of construction to a new home of around $6,388.


3) According to USA Today, both the soybean market and aerospace exports to China will take a hit - which impacts farmers and aerospace industry.  And Harley-Davidson Motorcycle corporation will move a portion of manufacturing overseas to avoid tariffs by other countries such as the European Union -- due to the tariffs imposed by the Trump administration.



None of the above bullet points highlight the obvious terrible fact that along with increases in prices of traded goods, a corresponding loss of American Jobs will occur.   The negative impact of the above tariffs is not enormous, but represents a loss to the revenue of our country.  According to the U.S. Department of Commerce, moves such as removing our nation from trade deals (i.e. NAFTA) could result in job losses of around 2.6 million American jobs.  Wow.



In the reporting cited above, the potential trade war with China over around $50 billion is not huge, but is not necessarily preferred and will not result in any positive outcome for the United States.  Additionally, a list of 180 types of products to which tariffs will be imposed upon can be found in the following article by NPR titled "EU Tariffs Take Effect, Retaliating For Trump's Tariffs On Steel And Aluminum".



And finally, yesterday Monday, in an email from 'Politico Agriculture,' pork prices are due to increase in price by 20% on July 5 of this year:

TARIFFS PILE ON PORK INDUSTRY: Few industries have been hit harder by President Donald Trump's tariffs than pork, where producers have gone from predicting growth at the beginning of the year to worrying about losing market share in two of their three biggest markets, Mexico and China. Pork producers already took a blow in 2017 when Trump pulled the U.S. out of the Trans-Pacific Partnership, putting producers in an awkward position with Japan — the biggest importer of U.S. pork by value, according to the National Pork Board.

Pork has been targeted by tariffs at every step of the way, first showing up on a retaliatory list released by China after the Trump administration imposed $3 billion worth of duties on steel and aluminum in March. China is the third largest importer of U.S. pork, buying a little more than $1 billion worth of product in 2017. But producers are much more concerned about losing market share with our neighbor to the south. Mexico's 10-percent tariff on pork will jump to 20 percent on July 5, and the largest importer of American pork by volume is already in discussions with the European Union about ramping up cross-Atlantic imports.

The USDA's livestock, dairy and poultry outlook report released June 18 predicts hog prices are expected to average 19 percent lower in the third quarter and 17 percent lower in the fourth quarter, compared to prices from last year, in part due to price adjustments to Mexican tariffs.

Overall, in the excerpts above, the clear notion of a threat to our 'national security' is obviously not a true threat.  Therefore, the trade tariffs imposed on other countries to overcome any threat to our national security is just a ploy (a trick) to build support among the citizens of the United States of America.  Do not fall for the trick.  Below, I want to discuss briefly, the indirect effect on business with China which has been reported but is not discussed widely in the news.

Storm Larger Than Predicted

The reporting over the last few weeks regarding trade would lead a person to believe that other countries will now need to 'pay their fair share' on traded imports/exports.  That sounds wonderful in principle.  With China having around $200 billion dollars in imported goods to the United States, the U.S. stands to get a good share of money from tariffs.  While the United States has only about $50 billion in exports in return, the Chinese government appears to have less negotiating power.  At first sight...



In reality, there is an entire other sector which is not classified as 'traded goods' as reported by NPR.  Those goods or that category is 'services' -- i.e. the service industry along with the tourism industry.  Businesses would love to expand their presence in China.  The Chinese government could strike back and put restrictions on corporations which would have an unknown negative impact to the United States.  The radio station NPR aired an episode titled "What It Takes For An American To Do Business In China" in which the unknown threat was discussed as follows:

READE: Well, I hope the United States expected the response that they got because any China watcher would tell you that China will not want to come to a negotiating table from a position of weakness. China would definitely respond with an immediate and clear message.

KELLY: The Chinese cannot respond in kind, though, because the U.S. doesn't send $150 billion worth of goods to China, right?

READE: Correct, but the trade relationship is bigger than just the production and export of goods. There's a whole services side to the trade, and it's a number of things that you don't necessarily think about. So it includes tourism, which is in the billions of dollars. It also includes education.

The cumulative negative impact to the U.S. with regard to businesses trying to break into the Chinese market is unknown.  Therefore, the current trade discussion is heating up and turning into a potentially problematic situation for both countries.  Hopefully, in the months to come, congressional leaders step up along with large corporations and write/call President Trump and have him reverse the discouraging trade tariffs.

Conclusion...

Ultimately, the United States will suffer from the current move toward the trade imbalance being implemented by the Trump Administration.  There is no sign of that occurring at the moment.  The overall message coming out of the trade war is that trade is not a huge system of 'isolated components'.  Each component is tied to each other.  The analogy in medicine is that operating on one system in the human body does not impact any other anatomical/physiological system.  Truth is that each component is connected in some fashion to another.  Why would law makers, administrators think differently.



Last but not least, the real troublesome result of the ongoing breakdown of trade agreements is that deep relationships are broken or thrown into question between countries.  Which is exactly what we (as a nation) do not want.  Trust between nations is important.  Imagine if you shopped at the farmers market every week.  Furthermore, imagine if you could trust that each week a certain vendor selling a selective fruit/vegetable would definitely be there.  The vendor depends on your business and you (as the consumer depend) on the vendor showing up with the produce that you desire to purchase.  The relationship is built on trust -- really purchasing trust.



If no relationship exists, then the vendor has no reason to keep the prices the same or show up.  As a result, you are impacted (cannot buy the produce that you would like) and the farmer/vendor cannot sell product.  And the farmer's market association which hosts the market each week loses on the vendor's cut of the profits.  Relationships breakdown and everyone loses.  Lets not let that happen with other nations around the world.