Intuitive Surgical makes EndoWrist instruments for its surgical robotics systems in Mexicali, Mexico. [Photo courtesy of Intuitive Surgical]
Medical device manufacturers like Medtronic and Intuitive have offered few details about how they plan to respond to new import taxes imposed by President Donald Trump, who said new tariffs on goods from Mexico, Canada and China will soon take effect.
Previously: Trump proposes new import taxes on semiconductors and chips
The survey — which includes manufacturers of medical equipment and their suppliers among manufacturers of machinery, electronics and chemicals — indicated manufacturers broadly are experiencing the “first operational shock of the new administration’s tariff policy.”
“Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts,” Manufacturing Business Survey Committee Chair Timothy Fiore said in the report. “Although tariffs do not go into force until mid-March, spot commodity prices have already risen about 20 percent.”
Fiore said the latest indicators point to weakening U.S. manufacturing demand, with continued attrition in manufacturing labor and manufacturers cautious about expanding due to economic headwinds.
“Inputs — defined as supplier deliveries, inventories, prices and imports — revealed the first signs of supplier difficulties due to some pull-forward deliveries and discussions about who will pay for tariffs,” Fiore said.
Manufacturing leaders who participated in the survey said the tariffs have created uncertainty and volatility among customers, who are holding off on new orders and worried about retaliation from other countries.
One company in computer and electronics manufacturing said spending limits at the FDA and NIH are delaying orders from customers.
Commodities that are increasing in price include aluminum (for the 15th consecutive month), copper, electrical and electronic components, plastic resin, polypropylene, steel and solvents, while ocean freight prices are dropping.
Electrical components remained in short supply for the 53rd straight month.
“Panelists noted a weakening level of demand performance, with a 1.3-to-1 ratio of positive comments versus those expressing concern about near-term demand,” Fiore said. “Orders have also been impacted by discussions of which party will pay for potential tariff costs, causing a slowing in order placement. In addition, there is diminished confidence not only in additional interest rate cuts, but also the decline in long-term rates affecting durable goods and construction activity.”
Related: AdvaMed seeks medtech exemption on all import taxes
