China’s Pharma Leverage Is ‘Nuclear Option’ in US Trade Talks

President Xi Jinping’s stranglehold on rare earths will give China unprecedented leverage to win concessions from the US during talks this weekend in Kuala Lumpur. Sitting in Beijing’s reserve is control over an even more vital supply chain: medicine.

China’s power rests on its grip over the global supply of active pharmaceutical ingredients, or APIs, which are core components of commercial drugs. Beijing’s broad sway extends upstream to the raw chemicals, solvents and reagents known as “key starting materials” needed to make the APIs themselves.

US officials, former trade negotiators and analysts say America’s dependence on Beijing for such exports ...