President Donald Trump’s 25 percent tariffs on Chinese imports went into effect on July 6, a move that, according to industry experts, could have wide-ranging effects on American medical device manufacturers. In early April, RBC Capital Markets estimated the proposed tariffs could cost the entire medical device industry up to $1.5 billion each year. A more recent survey conducted by the Medical Imaging and Technology Alliance (MITA), an organization that represents medical imaging and radiopharmaceutical manufacturers, projected that the tariffs will cost American medical manufacturers more than $138 million this year. According to MITA, CT scanners and other radiographic imaging devices could be impacted the most by the new tariffs.
The Trump Administration’s original tariff list included more than 1,300 items, of which 30 were finished medical device products, including pacemakers, ultrasounds, CT scanners, needles, catheters, radiation therapies.
Patrick Hope, Executive Director of MITA stated:
“These tariffs on imaging products or their components will harm the American medical technology sector’s ability to stay competitive and will adversely affect the U.S. economy in ways that could compromise patient access to care. Though the Administration has stated that it will implement an exemption process, we have not yet seen any information about how or when it will do so. Policymakers should act quickly to ensure that patient access to innovative life-saving technology is not compromised.”
MITA has commented to U.S. Trade Representatives that many medical imaging products undergo “inter-company transfers,” meaning the products are imported from a manufacturer in China to a facility in the U.S., where they are transformed and re-exported, sometimes to China. In these cases, the tariffs present a major disincentive to manufacturing the products in the United States.
MITA hopes it can convince U.S. Trade officials to develop a “robust exemption process” for medical imaging products and components. Patrick Hope stated:
“[W]hile we are encouraged that the Administration has shown openness to making adjustments to the list, we first need a clear explanation of the process we should use to make our case to the government to ensure that American innovation can continue to thrive.”
Although AdvaMed, an international trade association for medical technology, claims to have successfully lobbied to remove some types of medical devices from the tariff list, an AdvaMed representative declined to reveal which devices had been removed.