President Trump’s plan to impose tariffs on imported goods will affect the prices of the approximately 75% of available US-marketed medical devices that are manufactured out of the country, and more specifically the 69% of available US-marketed devices that are manufactured solely outside of the US, according to GlobalData’s Medsource Database, which collates data on the medical device supply chain.
These tariffs may have negative consequences for a continually growing market due to an ageing population and increasing prevalence of long-term illnesses. GlobalData estimates the US medical equipment market was worth $197.8bn in 2023 and is projected to reach $305.1bn in 2033 with a compound annual growth rate (CAGR) of 4.3%.
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By GlobalDataAs a result of these policy changes, 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.
Companies heavily invested in foreign manufacturing such as the South Korea-based L&K Biomed, which manufactures 100% of its products abroad, are likely to be affected by these policies while companies such as Becton Dickinson, which only manufactures an estimated 12% of its products abroad, can expect to be in a more secure position in the US market. Hospital supplies, diagnostic imaging, and anaesthesia and respiratory devices are shown to be the most common types of medical devices imported to the US; therefore, these types of products can be expected to be significantly impacted as well.
Trump’s additional proposition to impose 60% tariffs on all Chinese imported products is likely to cause significant disruptions in the supply chain and will affect approximately 13.6% of the total US-marketed medical devices that are currently manufactured in China.
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 favourable environment with increased costs, potential supply chain disruptions, and possible retaliatory tariffs from affected countries.