chairman Donald Trump‘S Tariff The medical community is creating a division.
Medical equipment and protective gears made in China, Mexico and Canada were first freed from duties during Trump administration, but have not received a vengeance from their latest round levy so far. While the device manufacturer who will take a big hit from the tariff, is insisting on a new carving, the manufacturer of individual safety devices – who stand to benefit from obstacles – are not.
The costs for hospitals in duties can also increase – and therefore patients – and can reduce access to important equipment and care.
“Leaders of the Medtech Supply Series are already reporting the concerns of the supply chain, and we cannot take the risk of increasing the cost of health care for patients, or driven the health care system,” Advaymede CEO Scott Whitekar said, said the business group that represents medical technology and device manufacturers. “The reality is that any increased cost will be largely borne by taxpayer-funded health programs such as Medicare, Medicade and VA.”
Hospital business groups are also ringing alarms, saying that tariffs can reduce the quality of care.
“AHA will continue to share with the administration, disrupting the availability of these important equipment – many of which are internationally citrus – the ability to disrupt the care of the patient,” said Rik Pool, CEO of the American Hospital Association. “AHA is proceeding for a tariff exemption for medical devices to ensure that the hospital and health system can continue to serve their patients and communities.”
Tariff pricing add complication
Wuhan, China – April 08: The models of United Imaging Medical Equipment are displayed during the 7th World Health Expo in Hubei province of China on April 8, 2025 on April 7, 2025.
Zhang Chang | China News Service | Getty images
In February, Trump imposed 25% tariffs on imports from Canada and Mexico, but later delayed duties on many items under the US-Maxico-Canada Agreement.
There has been no vengeance from China for goods. During its second term, Trump’s new levy has brought the tariff rate to 145%on imports from the country.
Dozens of other countries faced 10% tariffs after Trump delayed the proposed stator rates.
Medical tool vendor squeezed
Many businesses can only increase their prices to help offset the increased cost from tariffs. This does not apply to a series of medical equipment buying hospitals and other organizations.
Many of the groups will have trouble passing at high cost under current insurance coverage contracts, which they say they are closed in prices for the year.
“With the level of tariff, which we are looking in China, businesses are going to be completely upside down on these products … they cannot pass those costs to the consumer.” Aroflow Health CEOs, a firm that provides insurance-rover medical equipment for CPAP machines from breast pumps to nursing mother for Sleep AP patients.
Hite spent a rare meditech tariff exemption to advocate Congress members on Capital Hill last week for exemption – or at a very short time to accommodate.
“I think what we want to see, more than anything, a runway or some prediction,” Hate said, “The next 12 months, do it in the next two years, so that American organizations can formulate.”
PPE manufacturers see tariff boost
At the opposite end of tariff divide, American companies producing individual safety equipment have appreciated the latest Levy of Trump administration on China.
Eric Axle, CEO of the American Medical Manufacturers Association, Trade Group, said, “I don’t know that it is going to help the economy overall, but I know that in our case, gradual administration – both Republicans and Democratic – have admitted that these products are not competing on a level playground.”
Analysts of the Boston Consulting Group estimates that about half of the PPEs used in the US are manufactured in China, with about 10% -15% in Canada and Mexico.
The latest tariffs would add duties levied by the Biden administration on the PPE, which included the final decline, including 100% levy on imported syringes and needles from China. Those items will now face a total of 245% tariffs.
Ultore Safety, which makes masks, N95 respirators and gloves in the US, has welcomed the tariff on China. PPE manufacturer contracts with US government and companies Fedex,But not able to achieve more market share with health systems as Chinese manufacturers have subsidized by Beijing, which takes American manufacturers to price.
Ultore president Thomas Alan said that the new tariffs can help the company win the new contracts, saying that the Alterter increases, “we can actually reduce our prices.”
American manufacturing challenges
Trump has said that he has imposed tariffs in large parts to encourage manufacturing in the US in the case of PPE.
But near the term, counseling firms say that multinational producers are looking to move manufacturing from China to other countries from far away, rather than that it is with low tariffs instead of bringing back to America
BCG managing director and partner Vikram Aggarwal explained, “Managing that more complexity becomes super hard.”
For American-based medical equipment and protective gear manufacturers, a strategy is to transfer international production to Mexico and Canada, where they can protect the potential discount for products under USMCA.
Many major medical technology and device manufacturers produce many of their goods in the US, but have several points for internationally manufacturing. Analyst in Canacord Genuity Note Zimmer biomet And MalevolentTwo of the largest manufacturers of knee replacement have dozens of features in North America, Europe and Asia that help them navigate tariffs, but will still face a financial impact.
J&J sees $ 400 million tariff effect
Johnson & Johnson It calculates that its Medtech Division, which produces $ 400 million tariff headwind this year, may face a quantity of duties on sugar imports as well as non-USMCAs from Canada and Mexico.
It was one of the first Medtech firms to report the results of the first quarter and gave a glimpse of the effects of Tariff. CFO Joseph Walk told analysts on the company’s earnings call that the current contracts with hospitals make it difficult to increase prices in the near period.
For a long time, J&J CEO Jokin Duato said that the disruptive nature of tariffs does not make the right incentive to promote manufacturing in America
“What you want is to create manufacturing capacity in both Medtech and Pharmaceuticals in the US, then the most effective answer is not tariff but tax policy,” Duto said, the company has already invested $ 55 billion in four years to produce its advanced drugs in the US.
He said, “Tax policy is a very effective tool capable of manufacturing manufacturing capacity here in the US, for both medtech and pharmaceuticals,” he said.
