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Analysis

Medical Equipment Costs Expected to Rise $400M Due to Trump's China Tariffs

By Steven Porter  
   July 12, 2018

Americans without health insurance and those with high out-of-pocket costs are expected to be worst affected.

The cost of certain medical equipment imported from China is expected to rise significantly in the U.S. due to escalating trade tensions between Washington and Beijing.

When the Trump administration announced a 25% planned tariff last month on $50 billion in Chinese goods, healthcare industry stakeholders worried the move could put them in a financial pinch. China responded tit for tat, then the White House escalated this week, proposing a 10% tariff on an additional $200 billion in imports from China.

All of this means that the cost of medical equipment in the U.S. will increase by about $400 million nationwide, assuming that import levels hold steady, according to research released Thursday by the American Action Forum, which describes itself as a "center-right policy institute."

The AAF research identified 55 products on the updated tariff lists, including medical imaging equipment and surgical instruments, which account for nearly $1.8 billion annually in imports subject to the tariff.

"Both medical practitioners and consumers of medical services can expect to shoulder the burden of these costs," wrote AAF Director of Immigration and Trade Policy Jacqueline Varas and AAF Deputy Director of Health Care Policy Tara O'Neill Hayes.

Providers will likely pass the estimated $400 million increase along to their patients by raising prices, but the impact on patients will differ depending upon the terms of their health insurance coverage, Varas and Hayes noted.

"These higher prices will hit the uninsured and those with substantial out-of-pocket liabilities hardest," they wrote.

The full list of medical imports identified by AAF, with dollar values, is available for download as a spreadsheet from the AAF website.

Steven Porter is editor at HealthLeaders.

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