Shares in Chinese gene-sequencing companies surged on Tuesday after the announcement of the ban. MGI Tech led the gains, jumping by the 20% daily limit to its highest level since December 2023.

China banned the import of Illumina gene-sequencing machines as part of a wave of retaliatory measures against fresh US tariffs on all Chinese goods, deepening the US company’s woes in one of its key markets.

The Ministry of Commerce in Beijing announced the ban with immediate effect on Tuesday, marking the most concrete restriction against the company. There was no mention of what would happen to Illumina’s existing machines in the country, or whether it can still export reagents, which are needed to run experiments.

China first added the global leader in genetic sequencing to its unreliable entity list in February together with Calvin Klein owner PVH, saying they infringed the principles of market transactions and undertook damaging actions against Chinese companies, without elaborating or spelling out the implications.

Shares in Chinese gene-sequencing companies surged on Tuesday after the announcement of the ban. MGI Tech led the gains, jumping by the 20% daily limit to its highest level since December 2023. 

The decision to block imports of Illumina’s gene-sequencing equipment is one of Beijing’s most extreme moves against a foreign business and adds to the company’s mounting challenges.

The San Diego, California-based firm generated 8.5% of its revenue from the Greater China region in 2023 but has seen homegrown rivals, such as MGI Tech, steadily erode its market share in China over the years. 

The new Trump administration’s funding cuts for scientific research in the US will also weigh on demand at the same time as the company faces fresh competition from global rivals, including Roche Holding.

With no more Illumina machines allowed into China, the company is likely to see its market share shrink further. Beijing’s decision to put Illumina on its blacklist has already unleashed a frenzy among its Chinese rivals to persuade customers to switch to their products. 

The company did not immediately respond to a request for comment Tuesday. Illumina previously said it was in talks with Chinese authorities to find a resolution. Its instruments are used in a wide range of research and clinical settings, from studying and diagnosing rare diseases to aiding doctors in selecting treatment options. 

The company has seen roughly US$7 billion ($9.42 billion) erased from its market value as its stock took a nose dive in February.