The medical technology industry is bracing for a big hit from Donald Trump’s trade war with China with nearly $5 billion in U.S. medical devices now impacted from retaliatory Chinese tariffs.
Waves of the Trump administration’s tariffs now impact more than $250 billion in Chinese goods, which analysts say are about half of that country’s goods being sold to U.S. consumers and companies.
In the medical technology industry, which makes devices, imaging and diagnostic products, fears are mounting with China’s most recent retaliatory measures leveling tariffs on $4.7 billion in U.S. medical technology exports , the Advanced Medical Technology Association (AdvaMed) reported to member companies Monday.
“If the trade war continues and escalating continues to grow, there will be more impact,” AdvaMed CEO Scott Whitaker said Monday at the group’s annual MedTech Conference in Philadelphia. AdvaMed represents some of the world’s biggest device makers including Johnson & Johnson, Abbott Laboratories, Medtronic, Stryker and Baxter International.
Over the summer, China began retaliating to counter moves by the Trump White House to level 25% tariffs on Chinese imports, first slapping tariffs on $1.125 billion in U.S.-made medical devices. But another round of retaliatory Chinese tariffs last week responding to Trump tariffs on Chinese imports brought the total leveled against U.S. medical technology products to more than $4.7 billion, AdvaMed said. The latest Chinese tariffs cover “almost all remaining U.S. medtech exports to China in 2017, plus possible non-tariff measures” such as “delayed regulatory approval, tendering discrimination,” AdvaMed said in a presentation to member companies.
Much of the impact of Trump’s tariffs have been placed on component parts made in China that are used to make medical devices, AdvaMed member companies say. Thus, the impact hasn’t been as direct on imports device makers here need.
It could, however, be worse. Thus far, medical tech firms and AdvaMed have been able to effectively lobby the Trump administration’s U.S. Trade Representative to limit the number of products that would be subject to tariffs once they enter the country. “We’ve been working directly with the (United States Trade Representative) … to limit the scope and take medtech off the list,” Whitaker said.
AdvaMed is working on a more detailed examination of devices and companies impacted for a report it expects to issue in the next two months.
Despite the potential negative impact on the medtech industry, some medtech companies do like the Trump administration’s effort to call out China for trade practices that have negatively impacted medical technology firms.
Trump has shined a “spotlight” focusing on unfair trade practices of some multinational companies based in China, said Nadim Yared, AdvaMed’s chair who is president and CEO of CVRx, Inc., an implantable medical device maker.