Bracing for Impact on Trump's Tariffs Towards MedTech
Background
In March 2025, President Donald Trump unveiled a sweeping tariff initiative, effective April 2, 2025 designed to curb trade imbalances and promote U.S. domestic manufacturing. A centerpiece of the policy is a universal 10% tariff on all imports entering the country. Trump framed this measure as a necessary move to protect American industries and jobs from what he described as decades of unfair trade practices and outsourcing, particularly by economic competitors like China and the European Union.
In addition to the blanket tariff, the policy introduced “reciprocal” tariffs, targeting nations with which the U.S. has large trade deficits. These included a 20% tariff on EU’s, 25% on South Korea’s, 24% on Japanese’s and 32% on Taiwan goods.
The worst tariff is towards China. The United States has imposed a cumulative tariff rate of 104% on Chinese imports. This consists of an initial 10% tariff implemented on February 4, 2025, an additional 10% increase on March 4, 2025, a 34% "reciprocal" tariff effective April 9, 2025, and a further 50% retaliatory tariff, also effective April 9, 2025. Trump argued that these countries have long benefited from favorable trade terms while placing barriers on American products.
The announcement also revived sector-specific tariffs, including a 25% tariff on imported automobiles and auto parts, and reinstated 25% tariffs on steel and 10% on aluminum. These moves aim to stimulate U.S. manufacturing but have sparked fears of cost increases and supply chain disruptions across multiple industries. Particularly vulnerable are industries dependent on imported raw materials or globally integrated supply networks.
Other countries are responding with their own tariffs as well which will impact the demand of exported goods as they become more expensive, leading to lower revenues, layoffs or even plant closure. This "Tariff War" is still in development and who knows what the coming days will bring and what new tariffs will be implemented in the form of retaliation in the USA and other countries. Certainly something that manufacturers are closely monitoring and the stock market responding.
How does this impact the MedTech Industry?
One major sector voicing concern is healthcare. The medical device industry, represented by trade group AdvaMed, has argued against blanket tariffs, citing threats to innovation, job losses, and rising healthcare costs. While pharmaceuticals were exempt, tariffs on many medical goods remain. AdvaMed and other groups have lobbied for exemptions, stressing that medtech plays a humanitarian and economic role that deserves protection. U.S. healthcare providers, meanwhile, worry about cost hikes affecting hospitals and patients.
Although exempt, pharmaceutical products don’t exist in isolation, and the cost of other goods—especially those not exempted from tariffs—could ultimately affect the production of generic drugs, which make up 90 percent of prescriptions in the U.S. Tom Kraus, vice president of government relations at the American Society of Health-System Pharmacists, pointed out that because bulk chemicals—the raw materials used to manufacture drugs—haven’t been excluded from Trump’s tariffs, the generic drug market could still face consequences. “For many of these materials, alternative sources are limited or nonexistent,” he said. “If China were to restrict exports of key ingredients, it would be difficult to compensate for that loss, potentially leading to shortages.” Unlike large brand-name pharmaceutical companies, generic drug manufacturers typically operate on narrow profit margins and lack the financial buffer to absorb significant cost increases.
Analysts warn of broader economic fallout. Financial markets showed volatility immediately after the announcement, and trading partners like China and the EU promised retaliatory tariffs. Healthcare industry leaders estimate that tariffs could drive up hospital and health system costs by at least 15%, a burden likely to be passed on to insurers and patients. This could impact everything from drug pricing to diagnostic tools and semiconductor-based componentscrucial to modern medical technology.
Ultimately, the 2025 tariffs signal a decisive shift toward protectionism, reinforcing Trump's "America First" doctrine. While they may offer short-term support to certain domestic industries, the long-term impact—especially on healthcare, consumer prices, and international relations—remains uncertain. Experts caution that the U.S. could face diminished global competitiveness, strained diplomatic ties, and greater pressure on healthcare infrastructure if trade tensions continue to escalate
