Medtech Industry Continues Push for Tariff Exemption

AdvaMed president claims medical technology innovation and healthcare's 'humanitarian principle' are at stake.

By: Michael Barbella

Managing Editor

Photo: Lightspring/Shutterstock.

The medical device industry is not giving up the fight for tariff relief.

Its latest salvo was fired last week by AdvaMed President/CEO Scott Whitaker in a two-page editorial published in The Baltimore Sun. In the editorial, Whitaker outlines his reasons for exempting medical devices from the sweeping tariffs President Donald J. Trump is threatening to impose this summer. AdvaMed has been lobbying for an exemption for the past several months.

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.

In his editorial, Whitaker commends the president for attempting to correct America’s trade imbalance and enticing manufacturing to return to the United States. But he contends that increased tariffs would threaten U.S. medtech’s global leadership and provide an unfair advantage to foreign competitors. “Retaliatory tariffs, which China has implemented and other countries have threatened, could result in a policy environment that disadvantages export-competitive U.S. companies and gives advantage to foreign competitors, including China,” Whitaker wrote.

Related: Nine Medical Groups Request Medical Product Tariff Exemption

Tariffs also would increase costs for the medtech industry, and those costs could not easily be passed along to patients and providers, Whitaker claims. Many companies would “bear the full impact of tariff costs” by cutting jobs and/or reducing R&D, which in turn, would negatively affect innovation. Small business and startups would be particularly vulnerable. “…approximately 80% of medtech companies are small businesses and startups. They often make only one product as they get underway,” Whitaker said. “Increased product costs could drive them out of business. And who loses from a diminished U.S. medtech industry?”

Patients, of course. Whitaker cites several examples of worst-case scenarios from higher tariffs: delays in surgery, setbacks in diabetes care, longer waits for heart valve implantations or knee replacements, and restricted access to the latest technologies. “Medtech is critical to making America healthy again. Longer term, patients could miss out on the next greatest innovation, such as an AI-enabled tool to diagnose breast cancer or prostate cancer earlier, with greater accuracy than ever before,” he stated.

Whitaker’s editorial also noted that any increased costs to medtech products will mostly be borne by taxpayer-funded healthcare programs like Medicare, Medicaid, and the U.S. Department of Veterans Affairs. “Given the challenges we have with federal spending, now is not the time to add costs to taxpayer-funded health programs,” the April 17 editorial stated.

Besides the significant impact to medtech innovation and increased costs to the healthcare system, tariffs are a threat to the basic “humanitarian principle” of good health. “We all want to live health, pain-free lives for as long as possible. But that is not the case for far too many,” Whitaker wrote. “So, we should avoid any policy that would increase the financial burden of patients, never mind the increased costs to Medicare, Medicaid, and the V.A. This is precisely why medical technologies have traditionally been exempt from tariffs among America’s key trading partners for decades.”

“This humanitarian principle, as well as the primacy of the United States in medtech innovation and the restoration of American health, are at stake. Taking tariffs on medtech off the table would eliminate that risk,” Whitaker continued. “We agree with the president’s ultimate goal of lowering and eliminating tariffs everywhere. As the administration continues country-by-country negotiations, we urge at the very least that all parties agree to a reciprocal ‘zero for zero’ tariff policy in which each country agrees to zero tariffs on all lifesaving and life-enhancing medtech.”

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