The global trade picture for medical devices has become more complicated in the first weeks of 2025 as the U.S. has threatened to apply tariffs to a series of trading partners across the globe. However, tensions are surfacing between the European Union and China as well, making clear that the medical technology industry will face an increasingly complex trade picture in this new year.
The first Trump administration had declared a wide range of tariffs on the People’s Republic of China in 2018, one of a series
of trade policies enacted during President Donald Trump’s first term. One of the outcomes of that first series of activities on trade was the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement. During this 2018 round of tariffs, medical device manufacturers had routinely petitioned the Trump administration for exceptions for the tariffs that had been applied to products coming from China due to the prospect that the tariffs would create shortages.
In 2024, the administration of President Joseph Biden had also enacted tariffs for products imported from China, a list that included semiconductors and syringes. The notice by the Office of the U.S. Trade Representative stated that while tariffs applied to products from China have reduced the volume of imports, the effect was to increase imports from other nations, which may contribute to supply chain diversification and resilience.
The current tariff conflicts are part of a larger series of trade issues that affect nearly all the major economies in the Northern Hemisphere. The European Commission (EC) posted a Jan. 13, 2025, advisory stating that it was prepared to take steps to address discriminatory practices in China that disadvantage medical devices coming from other nations. The EC opened an investigation into the problem in 2022, but to date has been dissatisfied with Beijing’s response. The EC stated that it is prepared to take action to support fair competition in China, adding that devices imported into the European Union from China had grown by more than 100% between 2015 and 2023.
President Trump announced that he would apply tariffs of 25% on goods imported from Canada and Mexico, and an additional 10% tariffs on products from China. The White House said the tariffs are necessary to reduce the flow of illegal narcotics across the U.S. northern and southern borders, although the tariffs on Mexico and Canada have been suspended pending negotiations. The tariffs applied to China are still in place, however, which may complicate matters for medical technology companies that import components or finished products from China.
The American Hospital Association estimated last year that hospitals had imported nearly $15 billion in medical equipment in 2024, an increase of nearly $1 billion over the previous year. AHA stated that a tariff of 7.5% was already in effect for many products from China, including some imported by hospitals, but that higher prices for many medical supplies were likely to remain in place for the foreseeable future despite efforts to diversify supply chains.
The Advanced Medical Technology Association (AdvaMed) posted a Feb. 1, 2025, press release stating that the association shares the administration’s concerns over the impact of illegally imported drugs on U.S. public health. AdvaMed President/CEO Scott Whitaker stated that the tariffs on Mexico, Canada, and China are also sources of concern for public health due to the prospect of shortages.
Whitaker stated that most medical products from China had been exempted from tariffs during the 2018 round of tariffs, adding that AdvaMed advocates that such exemptions be repeated now. Because medical devices must go through FDA premarket review and Medicare coverage determinations, tariffs exercise an effect similar to that of an excise tax. A similar effect was seen in connection with the medical device tax that was repealed in 2019.
AdvaMed will continue to monitor the supply chain for a variety of medical devices and associated products, Whitaker said, adding that tariffs could boost the competitiveness of nations other than China. “We hope that these critical facts resonate” with the White House, Whitaker said, adding, “will continue to make our case on behalf of the patients our companies serve.”
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