Trump's Chinese tariffs threaten to cost medical device makers $138 million a year, MITA says


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President Donald Trump’s tariffs on Chinese imports will cost American medical device makers more than $138 million this year, the Medical Imaging and Technology Alliance estimates. As a result, the group is calling for a “timely and robust exemption process.”

MRIs, pacemakers, sonograms and other medical devices were all included in the list of items subject to the 25 percent tariffs that went into effect on June 6.

The tariffs could cause some vendors to downsize and cut research and development budgets, according to a recent MITA survey. And the impacted companies would also reduce their U.S.-based employment over the next few years to counteract the recently enacted China Section 301 tariffs.

CT scanners and other X-ray device components will be hit the hardest, the survey found. While the Trump administration said the tariffs are designed to combat China’s unfair trade practices, Chinese officials said Trump has started “the biggest trade war in economic history.”

Regardless of who is correct, medical device manufacturers will be one of the hardest hit industries. In fact, a recent RBC Capital Markets report estimated that the tariffs will cost the medical device industry up to $1.5 billion annually.

“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,” Patrick Hope, MITA executive director, said in a statement.

Part of the issue, MITA argued, is inter-company transfers. Many medical device products are imported from a Chinese manufacturing facility to the U.S., where the devices are transformed and then re-exported. Taxing on both ends will “create a disincentive.”

As a result, MITA is asking the Trump administration to exempt medical imaging technology and devices from the tariffs. The group argues that the exemption would be a “humanitarian good.”

“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,” Hope said. “Policymakers should act quickly to ensure that patient access to innovative life-saving technology is not compromised.”

Twitter: @JessieFDavis
Email the writer: jessica.davis@himssmedia.com