President Donald Trump’s tariffs are making a divide within the medical community.
Medical devices and protective gear made in China, Mexico and Canada were exempt from duties in the course of the first Trump administration, but thus far haven’t gotten a reprieve from his newest round of levies. While device makers who would take a giant hit from the tariffs are pushing for a brand new carve out, the makers of non-public protective equipment — who stand to profit from the barriers — will not be. Â
The duties could also increase costs for hospitals — and subsequently patients — and reduce access to critical equipment and care.
“MedTech supply chain leaders are already reporting supply chain concerns, and we cannot afford to drive up the price of health look after patients, or on the health care system,” said Scott Whitaker, CEO of AdvaMed, the trade group which represents medical technology and device makers. “The fact is, any increased costs can be largely borne by taxpayer-funded health programs like Medicare, Medicaid and the VA.”
Hospital trade groups have also been sounding the alarm, saying that tariffs could reduce the standard of care.
“The AHA has and can proceed to share with the Administration, disruptions in the provision of those critical devices — a lot of that are sourced internationally — have the potential to disrupt patient care,” said Rick Pollack, the CEO of the American Hospital Association. “AHA continues to push for a tariff exemption for medical devices to make sure that hospitals and health systems can proceed to serve their patients and communities.”
Tariffs add pricing complexity
WUHAN, CHINA – APRIL 08: Models of United Imaging medical devices are on display in the course of the seventh World Health Expo on April 8, 2025 in Wuhan, Hubei Province of China.
Zhang Chang | China News Service | Getty Images
Trump in February imposed 25% tariffs on imports from Canada and Mexico, but later delayed duties on many items that fall under the U.S.-Mexico-Canada Agreement.
There was no reprieve for goods from China. Trump’s recent levies on imports from the country during his second term have brought the tariff rate as much as 145%.
Dozens of other countries face 10% tariffs after Trump delayed proposed steeper rates.
Medical equipment seller squeezed
Many businesses can simply raise their prices to assist offset increased costs from tariffs. That does not apply to a spread of hospitals and other organizations buying medical equipment.
A lot of those groups could have trouble passing on higher costs under current insurance coverage contracts, which they are saying have locked in prices for the 12 months.
“With the extent of tariffs that we’re in China, businesses are going to be completely the wrong way up on these products … they cannot pass those costs on to the buyer.,” explained Casey Hite, CEO of Aeroflow Health, a firm which provides insurance-covered medical devices starting from breast pumps for nursing moms to CPAP machines for sleep apnea patients. Â
Hite spent last week lobbying members of Congress on Capitol Hill for an overall MedTech tariff exemption — or on the very least more time to regulate.
“I believe what we would really like to see, greater than anything, is a runway or some predictability,” Hite said, adding “let’s do that over the following 12 months, next two years, in order that U.S. organizations can prepare.”
PPE makers see tariff boost Â
On the other end of the tariff divide, U.S. corporations that produce personal protective equipment have applauded the Trump administration’s latest levies on China.
“I do not know if it will help the economy overall, but I do know that in our case, successive administrations — each Republican and Democratic — have recognized that these products will not be competing on a level playing field,” said Eric Axel, CEO of the American Medical Manufacturers Association, the trade group which represents PPE Makers.
Analysts at Boston Consulting Group estimate roughly half of PPE utilized in the U.S. is produced in China, with roughly 10%-15% in Canada and Mexico.
The most recent tariffs will add to duties imposed on PPE by the Biden administration last fall, which included 100% levies on syringes and needles imported from China. Those items will now face a complete 245% tariff.
Altor Safety, which manufactures masks, N95 respirators and gloves within the U.S., has welcomed the tariffs on China. The PPE maker contracts with the U.S. government and corporations like FedEx, but has not been capable of gain much market share with health systems because Chinese manufacturers subsidized by Beijing undercut U.S. manufacturers on price.
Altor president Thomas Allen said the brand new tariffs could help the corporate win recent contracts, adding that as Altor increases capability, “we will actually lower our prices.”
The challenges of U.S. manufacturing
Trump has said he has imposed tariffs largely to encourage manufacturing within the U.S. Within the case of PPE, that won’t occur.
But near term, consulting firms say multinational producers need to shift manufacturing away from China to other countries with lower tariffs fairly than bring it back to the U.S.
“Managing that and the complexity there becomes super hard,” explained Vikram Aggarwal, a BCG managing director and partner.
For American-based medical device and protective gear manufacturers, one strategy now could be to shift international production to Mexico and Canada, where they’ll potentially secure exemptions for products made under USMCA.
A lot of the key medical technology and device makers produce a lot of their goods within the U.S., but do have multiple points for manufacturing internationally. Analysts at Canaccord Genuity note Zimmer Biomet and Stryker, two of the most important makers of knee replacements, have dozens of facilities across North America, Europe and Asia that help them navigate tariffs, but will still face a financial impact.
J&J sees $400 million tariff impact
Johnson & Johnson calculates that its MedTech division, which produces orthopedic and cardiac implants, could face a $400 million dollar tariff headwind this 12 months, due largely to the magnitude of duties on Chinese imports, in addition to levies on non-USMCA compliant imports from Canada and Mexico.
It was certainly one of the primary MedTech firms to report first-quarter results and provides a glimpse into the results of tarrifs. CFO Joseph Wolk told analysts on the corporate’s earnings call that existing contracts with hospitals make it hard to boost prices within the near term.
Long run, J&J CEO Joaquin Duato said the disruptive nature of tariffs doesn’t create the appropriate incentive to spice up manufacturing within the U.S.
“If what you want is to construct manufacturing capability in the U.S., each in MedTech and in pharmaceuticals, the most effective answer is not tariffs but tax policy,” Duato said, noting the corporate is already investing $55 billion over 4 years to provide its advanced medications in America.
“Tax policy is a very effective tool to be able to construct manufacturing capability here in the U.S., each for MedTech and pharmaceuticals,” he added.
