Healthcare providers and industry groups are expressing serious concerns after President Donald Trump’s Wednesday announcement of extensive tariff measures that will affect medical supplies and equipment across the board. The new policy includes a 10% baseline tariff starting April 5, followed by targeted higher tariffs on specific trading partners beginning April 9.
The sweeping changes are expected to impact essential medical items ranging from basic supplies like needles and catheters to
sophisticated diagnostic equipment and glucose monitoring devices. While pharmaceuticals received exemptions, medical device
manufacturers and healthcare facilities are bracing for significant cost increases.
According to Fitch Ratings’ Kevin Holloran, the tariffs will drive up prices for crucial medical instruments and equipment, including diagnostic tools, X-ray machines, and personal protective equipment. Healthcare providers are particularly concerned because their inability to pass increased costs to patients due to existing payer contracts could lead to reduced operating income.
The American Hospital Association (AHA) had previously sought exemptions for medical supplies, arguing that many supply chains couldn’t be easily relocated to domestic sources. Following
Wednesday’s announcement, both the AHA and AdvaMed, a major medical device trade organization, renewed their appeals for medical technology exemptions.
Providence health system estimates the tariffs could increase their costs by $10-25 million annually. CEO Erik Wexler emphasized that these changes come at a particularly challenging time, as the healthcare supply chain is still recovering from recent disruptions, including shortages caused by Hurricane Helene’s impact on IV solution manufacturing.
The Florida Hospital Association’s Mary Mayhew highlighted the difficult position many hospitals face, noting that maintaining large inventory levels is both financially and practically challenging due to storage limitations and product shelf life. The situation is further complicated by hospitals’ reliance on group purchasing organizations, which can limit flexibility in supplier selection.
Smaller medical practices are also concerned about their ability to weather these changes. Anders Gilberg of the Medical Group Management Association pointed out that many practices are already struggling with Medicare reimbursement reductions and post-COVID inflation pressures.
The diabetes technology sector appears particularly vulnerable to the new tariffs. Morningstar analyst Debbie Wang identified companies like Dexcom, Insulet, and especially Tandem Diabetes as being at risk due to their reliance on international manufacturing and components. The situation could be further complicated if European trading partners implement reciprocal tariffs.
While some larger medical device manufacturers like Boston Scientific and Edwards Lifesciences may be able to adjust their manufacturing locations to minimize tariff impacts, smaller companies have fewer options. J.P. Morgan analysts suggest that healthcare providers may have some short-term protection through existing fixed-price contracts, with Northwell Health noting they don’t anticipate immediate effects.
William Blair analysts expect the full impact of these tariffs to become clearer in 2026 as supply contracts come up for renewal. However, the long-term implications remain uncertain, depending on factors such as the duration of the tariffs, potential exemptions, and overall healthcare demand.
The healthcare industry finds itself in unprecedented territory as it grapples with these new trade policies. As Mary Mayhew of the Florida Hospital Association noted, making strategic decisions has become increasingly challenging in this uncertain environment, with conditions potentially changing daily.