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www.fdanews.com/articles/12977-trump-administrations-china-tariffs-hit-medical-devices-components

Trump Administration’s China Tariffs Hit Medical Devices, Components

April 6, 2018

U.S. medical device manufacturers could be impacted by the Trump administration’s proposed 25 percent tariffs on thousands of Chinese goods, which include medical devices and device components.

The tariffs would hit a large number of devices such as catheters, imaging devices, anesthetic instruments and defibrillators, as well as hearing aids, pacemakers and artificial body parts, according to the administration’s tariff list. Components used in medical devices would also be taxed, such as parts of medical and laboratory sterilizers and medical mirrors and reflectors.

China represents “the most significant growth market for the medical device industry today and for the foreseeable future,” according to AdvaMed, and many of the association’s members have established research and manufacturing facilities there.

In response to the administration’s tariff list, China announced its own proposed tariffs on $50 billion of U.S. goods, spanning 106 products in a range of categories that did not appear to include medical devices. The implementation date depends on when the United States imposes its tariffs, the Chinese Ministry of Finance said.

The tariffs are likely to impact U.S. medical device companies more than Chinese firms, especially for imaging products, according to China regulatory specialist Grace Fu Palma, founder and CEO of China Med Device.

“The tariffs could have more negative effects on the medical imaging industry, as many firms that once manufactured scanners in the U.S. have moved operations to China to take advantage of lower labor costs,” she says.

“However, most of the imaging products made in China are mid to low end products. U.S. hospitals tend to purchase higher end products. Imaging centers and outpatient centers who are more price sensitive may hurt more,” Palma says.

The tariffs could also affect the domestic Chinese imaging equipment export industry. Homegrown Chinese companies have begun to look for customers in the U.S. and Europe, among other locations. A 25% tariff could negate much of the price advantage of these companies but mostly in the mid to low end tier, she says.

Read the administration’s tariff list here: www.fdanews.com/04-04-18-Section301.pdf. — James Miessler