The medical device industry is bracing for a potential multi-million-dollar fallout from a proposed tariff on all products coming into the United States from Mexico.
The StarTribune of Minneapolis reports that the cost of these devices could skyrocket and that the effects would be widespread within the industry, costing tens of millions of dollars a month. The U.S. imports more medtech and device components from Mexico than from any other foreign country, according to an article in the newspaper.
The tariffs proposed by President Donald Trump are set to begin at 5% on Monday and rise to 25% by October, failing a diplomatic breakthrough. The two countries are still negotiating, with the Trump administration demanding that Mexico stem the flow of migrants through its borders into the U.S.
The United States imported $8.6 billion worth of medical devices and components from Mexico in 2018, accounting for 16.7% of the total in medtech imports, according to research group Fitch Solutions. Mexico led the pack, followed closely by Ireland, Germany and China, with Mexican-made goods including syringes, needles, catheters, therapeutic appliances, electrodiagnostic apparatus, orthopedics and prosthetics and portable aids.
Individual medtech manufacturers will have to decide who should cover the costs of the tariffs, Medical Alley Association CEO Shaye Mandle told MassDevice in an email.
“Increasing the cost of manufacturing medical devices leads to two possible pathways for the industry: shifting the costs to consumers and insurers, or absorbing the costs, forcing cuts in research and personnel,” Mandle said. Medical Alley is a medtech trade association in Minnesota.
National medtech trade group AdvaMed “strongly opposes” any tariffs on medtech products, according to Ralph Ives, the organization’s executive vice president of global strategy and analysis.
“AdvaMed is engaged with (the Office of the United States Trade Representative) regarding the proposed tariff increases on products from Mexico to make sure our views are known,” Ives said in an email. “We remain hopeful that alternatives can be found that will not impact patient access to innovative treatments and cures from the medical technology industry.”
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