President Donald Trump’s affinity for tariffs is well known. For national trade policy, the executive branch also has quotas, license fees, and other mechanisms at its disposal. There’s a lot to admire regarding the administration’s renewed focus on trade. But it’s important to remember that not all imported products are created equal.
This is especially true when Americans’ access to essential healthcare products could fall in the crosshairs.
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A case in point: the Bureau of Industry and Security at the U.S. Commerce Department is continuing its Section 232 investigation into imports of personal protective equipment (PPE), medical consumables, and medical devices. PPE is now a household term after COVID-19. Medical consumables include items such as needles, syringes, bandages, blood collection tubes, and scalpels. And medical devices, per the Bureau, include everything from pacemakers and insulin pumps to X-ray equipment and MRI machines.
This investigation is examining whether imports of all these products pose a national security risk. Depending on its conclusions, new tariffs or other trade restrictions could result. This should give all of us as patients pause. Given the implications, the administration should also revisit this investigation and give it a second look.
At their core, trade restrictions on medical products would increase cost, upset long-established trading partnerships, and make it harder for physicians and hospitals to access the technologies patients depend on every day. There are three specific reasons why these products should ultimately be excluded from the Department’s ongoing investigation.
First, global supply chains are important for medical technology innovation. The components that go into our medical technology, which are also subject to this trade investigation, are regularly sourced from various nations for our final, highly skilled completion into finished products here at home. For our manufacturing partners, think about Germany, Ireland, Switzerland, and countries throughout Southeast Asia. Disrupting these supply chains would slow medical technology innovation, delay patients’ access to these technologies, and discourage continued investment in U.S.-based research and development. Last year, the U.S. medical device industry alone was estimated at $191.2 billion. It is predicted to increase to $203 billion this year and to $346.2 billion by 2035. Punitive trade tools applied broadly could impede this progress.
In addition, America’s strong manufacturing base for medical technology — totaling approximately 16,000 manufacturing facilities producing roughly 70% of medical technology used domestically — would pay a price. Our domestic medical technology industry also accounts for nearly two million direct and indirect jobs. Seeking trade protection here via Section 232, therefore, is misguided. The Trump administration should be applauded for its attempts to build additional domestic manufacturing capacity. But premature trade restrictions affecting our existing capacity and these employees would raise costs and risk patients’ ability to access these products before additional domestic production could meet demand.
Finally, national security and a healthy nation go hand in hand. As researchers have highlighted, “Medical product supply chains are essential for the national security…of the United States.” The administration can strengthen domestic manufacturing while preserving diversified global supply chains that ensure medical providers and their patients have uninterrupted access to these products. Harvard University’s David Blumenthal wrote a few weeks ago, “Why treat pandemics as national security threats? Because that’s what they are.” Our domestic trade policy then should not further complicate the supply of these products.
PwC analysts have estimated that tariff-related costs affecting the medical device, life sciences, and pharmaceutical industries could increase from approximately $500 million to as much as $56 billion annually, depending on the scope of tariffs. If we want to Make America Healthy Again, a better trade policy should improve resilience, not unintentionally reduce access to — and raise costs for — essential medical supplies and devices.
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A more strategic path forward would be to reshore segments of medical product industries that are vulnerable and avoid disrupting supply chains that are already functioning well. As such, policymakers should pursue policies that strengthen American manufacturing without compromising patient care or increasing healthcare costs.
When lives are on the line, Section 232 investigations should tread carefully. We can’t afford an overly broad trade policy that risks disrupting the supply of essential medical products. These policies must be surgical.
Nam D. Pham, PhD, is managing partner at ndp | analytics, an economic and communication research firm, and an adjunct professor at The George Washington University School of Business.
