Financial & Business

Could Medtech Tariff Exemptions Be on the Way?

AdvaMed president/CEO expects a 'chunk of exemptions' to come through soon.

By: Michael Barbella

Managing Editor

Photo: Lightspring/Shutterstock.

AdvaMed’s tariff concerns may not be falling on deaf ears much longer.

In a recently posted interview, the organization’s President/CEO Scott Whitaker told the Mullings Group founder/CEO that he expects China to issue its own set of tariff exemptions as soon as this week.

“China is going to have their own set of exemptions from tariffs and it feels like an element of that is going to be in medtech,” Whitaker told Joe Mullings, who founded and heads the life sciences/healthtech search firm. “We’ve argued really aggressively with the Chinese officials that they need to exempt medtech products on behalf of patients. So we’re starting to see some movement there and I can imagine by the end of the day, maybe early next week we’ll see a chunk of exemptions that might come through in medtech, maybe in the diagnostics space, to some degree in the imaging or X-ray space as well. We’re very focused on that.”

Whitaker’s optimistic prediction follows months of lobbying on the industry’s behalf for an exemption to President Donald J. Trump’s tariffs. Earlier this month, Whitaker penned an op-ed piece in The Baltimore Sun calling for a “zero-for-zero” reciprocal trade policy and warned of the tariffs’ damaging impact on the healthcare industry.

Whitaker repeated his call for a “zero-for-zero” trade pact, noting that such an agreement would enable medical device companies to compete fairly and evenly with each other.

“We’ve been making the argument in every country, but particularly in Europe, at the end of the day why don’t we just all move to a zero-for-zero tariff model? There’s zero tariffs from Europe on us, though they’re already really low, zero tariffs from the U.S. on Europe, and let’s everyone compete against each other,” Whitaker commented. “All of our companies feel very confident. Just let us compete fairly, evenly. No tariffs, let us serve patients the best we can, let’s impact people’s lives, and the best companies are going to win. That’s the way the system should work.”

Thus far, the Trump administration is not showing any signs of supporting such a trade policy. After months of threats false starts, the president on April 5 instituted a baseline 10% levy on all countries trading with the United States but increased those duties for partners with the largest U.S. trade deficits. Most countries importing goods to America were being charged more under the plan.

Four days later, however, Trump announced a three-month pause on all “reciprocal” tariffs except for China, the world’s second-largest economy. Trump increased tariffs on the Middle Kingdom to 125% from 104% after China announced additional retaliatory tariffs against the United States on April 9. All other countries that were subjected to reciprocal tariff rates are currently being charged the universal 10% rate—for now.

“Let’s just do zero-for-zero. Let’s get rid of all these tariffs and let companies operate close to each other, keep the supply chain connected—Canada, U.S., Mexico, one big continent and serve the patients better,” Whitaker argued. “If we can get to a zero-for-zero model with a sort of humanitarian exemption concept in place, that’s the best place for everyone to land. We’ve told that to the White House, the president, and everyone else in the administration. I know there’s a bigger issue at play here with trade imbalances but on behalf of patients and medtech, I think that’s the place we need to land.”

Despite Trump’s hard stance on tariffs and his determination to reverse America’s “large and persistent trade deficits,” Whitaker is hopeful the president will eventually support the medical device industry.

“I’m not pessimistic,” he said. “I think the president’s going to come back around to supporting innovation in a way that’s helpful.”

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