Medical device industry executives have a lot to like so far when it comes to President Donald Trump and the Republican Congress: U.S. corporations got a big tax cut, the moratorium on the 2.3% medical device excise tax has been extended to 2020, and FDA is becoming even more business-friendly.
But the escalating trade war with China is a different story. Under its “Made in China 2025” plan, the Chinese government seeks explosive growth in biomedical and high-end medical device manufacturing. So the Trump administration has included finished medical devices in the billions of dollars in tariffs the U.S. Trade Representative has levied against China.
The irony is that a decent chunk of the medical devices made in China and imported into the U.S. are actually made by U.S. medical device companies. The medical device industry in the U.S. could take a nearly $1 billion hit from the tariffs against Chinese goods, according to AdvaMed, which lobbied to get some some devices removed from the Trump administration’s list. And the estimate doesn’t even include items such as circuit boards and other components that go into medical devices.
Medtech companies, including GE Healthcare, lobbied the administration to reconsider the tariffs, even arguing that Trump’s plan could backfire: According to the Boston Business Journal, GE wrote that the tariffs would “impose significant and disproportionate costs on U.S. businesses, workers and consumers without advancing —or potentially even undermining — the president’s goals.”