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How a Trade War Could Affect the US Healthcare Industry

Adaptive Medical Partners | Healthcare Information, Physician Recruiting

According to some experts, the United States is already in a full-blown trade war. The government has recently imposed significant tariffs on China, Canada, and Europe and has threatened more, particularly on China. In fact, the President recently threatened to put tariffs on all 500 billion plus products the US imports from China. Already, these tariffs are affecting a number of industries, including agriculture and manufacturing. Of particular concern, are the trade war’s effects on the healthcare industry. Healthcare in the United States is expensive, particularly when compared to other industrial nations. Tariffs promise to increase costs and put more pressure on healthcare manufacturers, providers and patients.

Medical Equipment

The first round of the trade war included a 25% tariff on Chinese products beginning in July. Included in the list of targeted products were sterilization and medical imaging equipment that are vital to clinics and hospitals. China also sells the US parts needed for hip replacement, a common medical procedure for the US aging baby boomers. The tariffs may significantly increase the cost of this procedure.

Many healthcare providers are already under financial pressure to stretch their thin operating budgets. Some tariff exemptions may help relieve this pressure, but inevitably, the price of these tariffs will be paid by American consumers.

Opioid Epidemic

The US is in a well-documented opioid crisis, with approximately 115 overdose deaths each day. The government places some of the blame for this issue on China, considered a primary supplier of illegal fentanyl, a powerful opioid coveted by addicts.

China has been working with the United States to reduce the shipment of these dangerous drugs. For instance, they added more fentanyl varieties to their list of controlled substances. Their cooperation has made an impact, which has been demonstrated by fewer of these drugs being seized by law enforcement in the US. Now experts fear that Chinese cooperation is at risk due to trade war tensions. An increase in illegal fentanyl will have deadly consequences on users and an already strained healthcare system.

Drug Prices

American consumers are facing increased prescription drug prices as a result of tariffs imposed on China. Approximately 80% of the active ingredients used in US drugs come from that country. Drugs such as insulin and a number of vaccines will be affected if all of the proposed tariffs are enacted.

In addition, experts warn that pharmaceutical companies may develop problems with their supply chains if tensions with China continue to rise. They may need to find new sources of these raw ingredients, which will take time. Plus, changing sources requires new inspections and approvals be completed before drug production can resume. American patients could experience higher prices and actual drug shortages due to US imposed tariffs.


Healthcare facilities need to take immediate steps to prepare for these tariff effects, including acquiring an increased inventory of certain drugs and medical devices. In addition, they should hire administrators with experience in finding new supply sources and who are experts in regulatory compliance.

While Chinese trade practices may indeed be unfair, these tariffs promise to be hard on the American consumer, at least in the short term. Medical supplies and pharmaceuticals may be more expensive and difficult to get. These difficulties will place extreme pressure on medical facilities that are already struggling financially.

Contact us if you are looking for an administrator who has the experience required to manage potential changes ahead due to the new trade wars.