AdvaMed Opposes Trump Tariffs, Fears Negative Impact on Medical Industry

TL/DR –

AdvaMed, a large medical device industry trade group, pushed back against the Trump administration’s newly announced duties on most U.S. trading partners, arguing they would stifle innovation and increase healthcare costs. In response to the baseline tariff of 10%, AdvaMed’s CEO, Scott Whitaker, made a case for the medtech industry to be exempted from such tariffs. In addition to the widespread impact on the healthcare sector, a survey by Black Book Research suggested these tariffs could increase the cost of care at hospitals and health systems by at least 15%.

AdvaMed opposes broad-based tariffs

AdvaMed, a leading medical device industry trade group, voiced its opposition to the broad-based tariffs announced by the Trump administration. The new tariffs have potential to inhibit innovation, increase healthcare costs, and lead to job losses.

Impact of tariffs on the medtech industry

AdvaMed CEO, Scott Whitaker emphasized the necessity for the medtech industry to be exempt from these tariffs, citing potential detrimental effects. In a recent announcement, President Trump stated the U.S. will impose a baseline tariff of 10% on most U.S. imports to combat trade imbalances, while certain goods, including pharmaceuticals, will be exempt.

Non-tariff barriers and market access

The White House pointed out that non-tariff barriers limit U.S manufacturers’ access to markets. They specifically called out India for imposing burdensome testing and certification requirements in sectors like medical devices, hindering U.S. companies’ ability to sell their products in the country.

Consequences of tariffs and sector exemptions

Whitaker expressed AdvaMed’s intent to continue discussions with the White House to emphasize the medtech sector’s significant economic and healthcare contributions. He noted that industries with significant humanitarian missions have traditionally been exempt from broad tariffs. However, despite lobbying, providers and the American Hospital Association failed to secure exceptions for crucial medical supplies.

Effects on device makers

J.P. Morgan analyst Robbie Marcus identified tariffs which could most affect medtech firms, including a planned 20% import tax on the European Union, 24% on Malaysia and 10% on Costa Rica, with the 34% rate on China also having an impact. Analyst Mike Matson added that most device makers could be less affected due to significant U.S. manufacturing. However, nearly all rely on raw materials and components sourced from outside the U.S. to some degree.

Impact on healthcare costs

Tariffs could increase healthcare costs by at least 15%, according to a survey by Black Book Research. Ninety percent of hospital finance executives said they would pass increased costs onto insurers and patients, leading to higher service charges. Tariffs could also operationally pressure providers through increased costs for drugs, diagnostics, and medical equipment.

Potential implications of a policy shift

PwC’s Ned Hux highlights that healthcare providers could face serious implications if tariffs are implemented alongside a broader economic policy shift targeting European trading partners. This would potentially augment costs of patient care and disrupt delivery efficiency. This prediction is in line with a Fitch Ratings outlook which suggests that alterations to trade relationships with European allies would significantly impact providers.

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