The U.S.-China tariff war, which began in 2018, could have sweeping effects on the domestic healthcare industry, according to a report from Frost & Sullivan, a research and consulting firm.
Six quick things to know from Frost & Sullivan on the tariff war and how it will affect healthcare:
1. The tariff war began in January 2018, spurred by complaints of intellectual property theft by Chinese companies. It began with tariffs on solar panels, washing machines, steel and aluminum imported from China.
2. Both sides have subsequently upped the ante, and as part of that, the U.S. has imposed a 25 percent tariff on medical devices like pacemakers, MRI machines and X-ray machines imported from China. The tariffs affect $4.7 billion of medical technology imports from China.
3. Taken together, the tariff increases on medical technology, supplies and metals are expected to increase healthcare costs by $600 million to $800 million, according to Frost & Sullivan.
4. These costs, especially for high-value items like MRI machines, will likely be absorbed by the device manufacturers or passed on to hospitals. Consumers will likely have to directly absorb the costs for smaller "consumable" devices, according to Frost & Sullivan.
5. Medical imaging vendors plan to invest less in research and development and cut jobs to absorb the costs of the tariffs, according to survey cited by Frost & Sullivan.
6. Trade talks between U.S. President Donald Trump and China President Xi Jinping will resume Oct. 10. However, Frost & Sullivan believes the 25 percent tariff will remain in place for the "foreseeable future."
Read more about trade war and how it will affect the healthcare industry here.
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