How tariffs could undermine a key pillar of the U.S. health care system

Scott Whitaker: ©AdvaMed

In testimony Wednesday before the Senate Finance Subcommittee on International Trade and Global Competitiveness, AdvaMed President and CEO Scott Whitaker warned that new tariffs on medical technologies imposed by the Trump administration threaten to undermine a key pillar of the U.S. health care system and jeopardize the country’s standing as the global leader in medical innovation.

Whitaker, who represents more than 600 companies as head of the MedTech Association, emphasized that the industry produces essential, life-saving equipment used daily in hospitals, clinics, and increasingly in home settings. "We are the backbone of the health care system, the engine that makes hospitals run," he told lawmakers. “Tariff policy, as proposed, puts this uniquely American success story at risk.”

A vital American industry

The medical technology sector is a cornerstone of the U.S. economy and health care infrastructure. It includes companies that design and manufacture diagnostic imaging equipment, surgical tools, implantable devices such as pacemakers and artificial joints, insulin pumps, and advanced technologies using artificial intelligence.

Collectively, these companies support an estimated three million direct and indirect jobs across nearly 17,000 U.S. manufacturing plants, generating more than $600 billion in domestic economic output, according to AdvaMed’s industry data. The U.S. also dominates the global medtech market, accounting for roughly 40% of worldwide sales, according to the U.S. Department of Commerce. “We are an American success story and the global superpower of medical innovation,” Whitaker said.

Why tariffs matter

Whitaker’s testimony comes as the Trump administration is imposing a series of tariffs on imports from China and other countries, affecting hundreds of components used in the manufacture of medical devices. The new trade actions are part of a broader “America First” strategy aimed at reshoring manufacturing and countering unfair trade practices.

Medtech is one of the most regulated industries in the world. Products must undergo rigorous clinical testing and FDA approval processes, and manufacturing facilities are subject to strict oversight.

While AdvaMed supports the administration’s long-term goal of reducing dependency on foreign manufacturing, Whitaker urged Congress to recognize the unique nature of the medtech supply chain. “Unlike smartphones or toys, our products are a matter of life and death,” he said. “Shifting production isn’t just expensive—it’s subject to regulatory delays that could last years.”

The complexity of the supply chain is massive, according to AdvaMed. A single diagnostic scanner or infusion pump can contain parts from more than 20 countries across three continents, many of which are not easily substitutable. Disruptions to this flow, Whitaker warned, could cause backorders, delays, and even patient harm—particularly in sensitive care environments like neonatal intensive care units. One AdvaMed member, for instance, supplies 50% of the NICU market for a specific product and 70% for another. “We are talking about patients measured in ounces, not pounds,” Whitaker said.

Adding to the challenge, most medical devices are sold through multi-year, fixed-price contracts with hospitals, and a large portion of revenue comes from federally funded programs like Medicare, Medicaid, and the Veterans Health Administration. This leaves companies unable to adjust prices quickly in response to cost increases caused by tariffs.

“Any tariff policy that would force increased costs onto these federally funded programs would be counterproductive,” Whitaker said, noting that any tariff revenue gains could be negated by higher costs to the federal government and consumers.

Whitaker called for a “zero-for-zero” tariff model—a reciprocal agreement among countries to eliminate tariffs on medical devices altogether. This policy framework was observed during President Trump’s first term when many medtech products were excluded from tariffs imposed on Chinese imports under Section 301 of the Trade Act. The model recognizes the humanitarian and essential nature of medical products and is common in global trade policy involving lifesaving technologies.

A longstanding global understanding

Historically, medtech products have been exempt from tariffs in most developed countries under global trade norms and humanitarian principles. For example, prior to recent policy changes, the average tariff on U.S. medtech exports to the European Union was just 1.3%, while tariffs in Japan and Canada hovered around 1%, according to the World Trade Organization. These low or zero rates reflect international recognition of the critical importance of unimpeded access to medical technologies.

Global coordination on medtech trade has proven particularly vital during health emergencies such as the COVID-19 pandemic, when supply chains were severely strained. The pandemic revealed how quickly disruptions to even minor components—such as test swabs or oxygen sensor chips—can cascade through the system, affecting patient outcomes worldwide.

Whitaker emphasized that maintaining this spirit of international cooperation is more urgent than ever, especially as medtech companies continue to lead in innovation areas such as AI-assisted diagnostics, robotic surgery, and wearable health monitoring. “Just weeks ago, a groundbreaking study of breast cancer patients—the largest of its kind—found a 29% increase in detection using AI. And that’s only the beginning,” he said.

Looking ahead

Despite current challenges, the medtech industry is expanding its U.S. footprint. In 2025 alone, more than a dozen companies have announced new domestic manufacturing investments, according to AdvaMed. The industry hopes the administration will allow that momentum to continue without additional disruption.

“We appreciate the President’s commitment to restoring fair trade,” Whitaker said. “But we urge the administration to treat medical technologies differently—recognizing their lifesaving role and preserving the policies that have allowed America to lead the world in medical innovation.”

He urged lawmakers to support permanent exemptions for medtech products and to advocate for their treatment as essential humanitarian goods in all future trade negotiations.