Trump tariffs to directly impact prices of majority of US medical devices: GlobalData

US President-elect Donald Trump’s plans to impose tariffs on imported goods will affect the prices of approximately 75 per cent of available US-marketed medical devices, which are manufactured out of the country. More specifically, the move will affect the 69 per cent of available US-marketed devices that are manufactured solely outside of the US, according to Medsource Database, which collates data on the medical device supply chain, by GlobalData.

GlobalData estimates that the US 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 (CAGR) of 4.3 per cent.

Aidan Robertson, Medical Analyst at GlobalData, states, “The tariffs may have negative consequences for a continually growing market due to an aging population and the increasing prevalence of long-term illnesses. 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 60 per cent tariffs on all Chinese imported products is likely to cause significant disruptions in the supply chain and will affect approximately 13.6 per cent of the total US-marketed medical devices, which are currently manufactured in China.

Companies that have heavily invested in foreign manufacturing and produce 100 per cent 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 per cent of its products abroad, can expect to be in a more secure position in the US market.

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

Robertson concludes, “While increased tariffs on imported goods could strengthen the US 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. 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.”