US medtech firms, including GE Healthcare (NYSE:GE) and the thriving Minnesota-based medtech sector, are concerned that tariffs on Chinese products proposed by President Trump could significantly affect their business, according to two reports released this week.
GE Healthcare executives are worried that the tariffs could hurt the competitiveness of its products, including its magnetic-resonance imaging units which are produced in Waukesha, according to a Boston Business Journal report.
GE is reportedly requesting that the Trump administration remove certain parts and components made in China from a list of products that could be on the receiving end of new US tariffs.
“GE’s requests for adjustments to the proposed tariff list have been limited … to those products that should be removed because tariffs would impose significant and disproportionate costs on U.S. business, workers and consumers without advancing — or potentially even undermining — the President’s goals,” GE wrote in comments to the US Trade Representative, the BBJ reported.
Chinese-produced parts are essential for a number of GE’s devices, including ultrasound machines, patient monitors, MRI machines, CT machines and X-ray machines, some of which are produced by GE owned facilities in the region while others are produced by local Chinese companies, according to the report.
Despite having some parts from China, 75% of GE’s components are made in the US, the BBJ reported. The company is worried about the other 25% however, saying that it cannot quickly find replacement suppliers due to “the unavailability of non-Chinese substitutes.”
Proposed tariffs would impose “substantial costs” on GE’s business, according to the report.
Minnesota-based trade groups representing medtech in the region voiced similar concerns, according to a Star Tribune report.
Minnesota’s Medical Alley Association CEO Shay Mandle wrote to the US Trade Representative sharing worries that the tariffs could unfairly impact Minnesota due to its thriving medtech industry, according to the report.
“Decisions made by the federal government that impact the medical technology industry have a more significant impact in Minnesota than any other state. Minnesota is the home of the most densely concentrated medical technology cluster in the world and ranks second in the U.S. in the number of citizens employed in the medical technology industry,” Mandle wrote, according to the Star Tribune.
AdvaMed, the largest medtech trade group in the country, had similar concerns about the tariffs, according to the report, claiming that the Chinese tariffs account for more than half of all medtech imports from the region.
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