If tariffs go through, the cost of most medical devices will go up

Tariffs will drive up the cost of medical devices: ©Videoflow -stock.adobe.com

President-elect Donald Trump has vowed to impose tariffs on imported goods as soon as he takes office, but these tariffs will affect the prices of approximately 75% of available U.S.-marketed medical devices, which are manufactured out of the country, according to experts. More specifically, the move will affect the 69% of available US-marketed devices that are manufactured solely outside of the U.S., according to Medsource Database, which collates data on the medical device supply chain, and by GlobalData, a data and analytics company.

GlobalData estimates that the U.S. medical equipment market was worth $197.8 billion in 2023 and is projected to reach $305.1 billion in 2033 with a compound annual growth rate of 4.3%.

“The tariffs may have negative consequences for a continually growing market due to an aging population and the increasing prevalence of long-term illnesses,” Aidan Robertson, Medical Analyst at GlobalData, said in a statement. “Companies will be forced to increase prices to make up for losses incurred by the proposed tariffs. Additionally, this may cause supply chain disruptions, reducing accessibility to medical devices and inflating the cost of these products due to the higher demand in comparison to the supply.”

Trump’s additional proposition to impose up to 60% tariffs on all Chinese imported products is likely to cause significant disruptions in the supply chain and will affect approximately 13.6% of the total U.S.-marketed medical devices, which are currently manufactured in China.

Companies that have heavily invested in foreign manufacturing and produce 100% of their products abroad, such as L&K Biomed, are likely to be affected by these policies, while companies such as Becton Dickinson, which only manufactures an estimated 12% of its products abroad, can expect to be in a more secure position in the U.S. market.

Hospital supplies, diagnostic imaging and anesthesia, and respiratory devices are the most common types of medical devices imported to the U.S.; therefore, these types of products are expected to be significantly impacted, experts say.

“While increased tariffs on imported goods could strengthen the U.S. medical device market by promoting domestic production and reducing susceptibility to supply chain disruptions in the long term, the negative effects of applying these tariffs are clear,” Robertson said. “Ultimately, the economic impact of imposing these increases will lead to a less favorable environment with increased costs, potential supply chain disruptions, and possible retaliatory tariffs from affected countries.”