The Trump administration has made reducing dependence on foreign adversaries a cornerstone of its economic agenda. From attempting to reshore semiconductor production to attempting to limit the use of Chinese supply chains, this administration’s protectionist policies are a significant piece of its identity. Tariffs are a core tool of that agenda. Used temporarily, tariffs could possibly be used as a negotiation tactic, but in general, they are a tax on consumers — they are a tax on Americans.
The question now before the Commerce Department is whether to use tariffs on medical devices through Section 232. The answer should be no.
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Start with a fact that rarely gets mentioned: The United States does not need to build the medical device industry. We already lead it. Roughly 70% of medical technology sold in the U.S. is produced domestically, across 16,000 facilities employing 2.8 million Americans. We hold 40% of the global market share. Section 232, applied broadly, could do more harm than good. Our dependence on Chinese-sourced medical supplies is real, but instead of using tariffs, there are other methods, such as deregulation and lower taxes, that wouldn’t raise prices but would help U.S. companies produce and innovate more.
The free-market case for tariffs does not exist, but the administration’s argument rests on the critical assumption that American manufacturing capacity is there to fill the gap. In fact, in the medical device industry, it might, but with tariffs in place, prices will still increase, quality may change, and supply may be diminished. However, if it is not, prices will increase dramatically, and supply may decrease as well.
Tariff-driven cost increases eventually get passed downstream and paid for by consumers, not producers.
Research from the Federal Reserve Bank of New York found that roughly 90% of the burden of the 2025 tariffs fell on U.S. firms and consumers rather than foreign exporters. So far, many medical device manufacturers have absorbed those costs within their own margins rather than passing them on to hospitals and patients. That cannot last indefinitely. As inventories turn over and contract cycles reset, the pressure to reprice will build. When it does, because of fixed Medicare and Medicaid reimbursement rates, there is nowhere for those costs to go except into less supply, reduced services, or strained federal budgets if the reimbursement is increased.
That forecast should guide the broader approach. Target the genuine vulnerabilities in the U.S. market: Bureaucracy and regulation. Do not penalize those who have made the medical device industry the powerhouse American success story that it is today and patients. Affordability is this administration’s brand. It is the promise that animates everything. Across-the-board Section 232 tariffs on medical devices will increase prices.
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That is a political and fiscal liability the administration does not need to take on, particularly in an election year.
U.S. spending on our healthcare system is already out of control. We need more public policy that looks to reduce the cost of healthcare instead of increasing it. Tariffs, in any form, will at best raise the cost of goods. Instead of public policy that increases prices, the government should look at ways to make production in the U.S. cheaper and faster, such as removing regulations, streamlining approvals, and promoting innovation.
Charles Sauer is the president of the Market Institute.