Illumina Stock Slammed As China Retaliates Against Trump's Tariffs
ALLISON GATLIN
Illumina (ILMN) stock skidded Tuesday after China signaled it would ban the importation of the company's gene-mapping products as part of an escalating tariffs battle with President Donald Trump.
China's Ministry of Commerce tapped 15 American companies, including Illumina, for punitive trade measures "to safeguard national security and interests," according to New York Times. It also added 10 new companies to its "unreliable entity list," which prohibits them from doing any business in the country. Illumina was added to that blacklist last month.
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China accounted for 7% of Illumina's sales in 2024, down from 10% and 11% in 2023 and 2022. Still, Illumina stock has declined about 36% since it was added to the unreliable entity list on Feb. 4. In premarket trades on today's stock market, Illumina shares shed more than 4% to 80.75.
Representatives of the company didn't immediately return a request for comment from Investor's Business Daily.
Illumina Stock Slammed In Tariffs Battle
In the past, China focused its trade war efforts on defense companies. But this time Beijing's actions are broader, taking on Illumina, a biotech company; clothing maker PVH, which makes Calvin Klein and Tommy Hilfiger brands; and a drone maker called Skydio, among others.
Late last month, Illumina Chief Executive Jacob Thaysen said the company was still selling in China. It's tools are helpful in diagnosing disease and running clinical research.
"We have had a lot of dialogue, both with Chinese customers that has reached out and truly want to make sure that Illumina stays in China," he said during the Advances in Genome Biology and Technology Conference. "We are very important for them both from a clinical studies perspective, but also in the clinic and other applications. They see us in China also as the main innovative leader there."
He noted the company has had conversations with "the right parties in China" to maintain its business in the country.
China Accounts For Less Than 5% Of Profits
But the move on Tuesday shook Illumina stock.
"If confirmed, the development would obviously be a disappointment for the company," RBC Capital Markets analyst Connor McNamara said in a report. He estimates China accounts for less than 5% of Illumina's profits due to recent price competition.
In its recent guidance for 2025, Illumina said it didn't attempt to reconcile the potential it would be ousted from China. But, given Illumina stock's tumble over the last month, "we believe the removal of ILMN from the China market was already priced into shares," McNamara said.
He kept his outperform rating on Illumina stock, but noted "we struggle to find a near term catalyst that will reverse the sell-off."
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