MedTech sector faces blow as US imposes 10% tariffs

While Australian pharmaceutical companies dodged the bullet of Donald Trump’s sweeping tariffs on medicines, the same can’t be said for the medtech sector, which faces a direct assault. The Medical Technology Association of Australia (MTAA) has confirmed that the 10% tariffs on exports to the US will hit the medtech industry hard.

Ian Burgess, CEO of MTAA, told Health Industry Hub “We have been collaborating with our counterpart association in the US, AdvaMed, and share their disappointment that the imposition of tariffs on MedTech will negatively impact medical technology and innovation, cost jobs and will increase overall costs to the U.S. healthcare system.”

The global medtech supply chain is anything but simple, and the impact of these tariffs will likely ripple through Australia and beyond. Higher costs are expected to be passed down the chain, putting immense pressure on an industry that already struggles with complex international logistics. The fallout will inevitably affect not just the medtech sector but also the patients who rely on these life-saving medical devices and health technologies.

Cochlear, a leading Australian medtech company, has voiced its concerns, highlighting the complexity of the new tariff regime.

“There are complexities in understanding the application of the new tariff. Cochlear has long been importing its products under a chapter of the Harmonized Tariff Schedule of the United States that provides for duty-free importation on a range of products into the US, including hearing implants.

“We are expecting further detail in the US Customs and Border Protection Notice of Implementation, which is expected to be published in the next week. An update will be provided to the market in due course,” the company said in a statement while its shares fell by 2.4%.

AdvaMed, the US medtech lobby group, also voiced its discontent. Scott Whitaker, President and CEO of AdvaMed, criticised the tariff decision, saying “If implemented as proposed, broad-based tariffs of this nature would act much as an excise tax. It will have a negative impact on innovation, cost jobs, and increase overall costs to the health care system. Historically, industries with a meaningful humanitarian mission have been exempted from broad tariffs, and as a result we have seen no to low tariffs on medtech from all key trading partners.”

Burgess echoed these concerns and pointed to the Australian government’s commitment to not reciprocate tariffs as a silver lining.

“We will continue to work with AdvaMed and the U.S. Administration to ensure their understanding of the critical role of MedTech in the healthcare ecosystem in the U.S and across the world, the value MedTech provides to patients, and the importance of the industry to continued U.S. economic growth, in order to seek an exemption from these tariffs,” Burgess stated.

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