Trump tariff order exempts pharmaceuticals, no word on other medical practice supplies
New tariffs from the Trump administration exempt pharmaceuticals but may still raise costs and disrupt supply chains for medical practices.
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The Trump administration’s sweeping new tariffs on imported goods will not apply to pharmaceuticals, but doesn’t specifically name any carveouts for other practice supplies.
The executive order, signed April 2 and taking effect this week, declares a national emergency over persistent U.S. trade deficits and authorizes a 10% ad valorem tariff on most imported goods starting April 5. Additional country-specific tariff hikes are set to begin April 9.
Pharmaceuticals and certain critical minerals are explicitly exempt under Annex II of the order. Other exemptions include products already covered under existing tariffs—steel, aluminum, automobiles and parts, energy products, and lumber.
In response to tariffs proposed by the Biden administration last year, the American Hospital Association highlighted that tariffs don’t just pose a threat to practices through pharmaceuticals but also through other medical supplies.
“Comprising approximately 10.5% of the average hospital’s budget, medical supply expenses collectively accounted for $146.9 billion in 2023, an increase of $6.6 billion over 2022,” the organization said in a fact sheet at the time. “AHA supports efforts to incentivize domestic manufacturing of essential medical supplies to improve the resiliency of the health care supply chain. However, higher prices for high-volume medical supplies, such as personal protective equipment and syringes, are likely to exacerbate and prolong the financial headwinds that hospitals already face today.”
Because of the nature of health care in the U.S., practices would be limited in their ability to counteract these increased prices, according to Anders Gilberg, senior vice president for government affairs for the Medical Group Management Association (MGMA).
"Practice expense calculations in fee schedules within commercial contracts and government programs such as Medicare and Medicaid are already fixed and won't account for any cost increases resulting from new tariffs or taxes," he said in a statement. "Already reeling from recent Medicare reimbursement cuts and multiple years of post-COVID inflation, medical groups will be forced to absorb any increased costs to the detriment of their businesses and, ultimately, patients."
The Trump administration cited concerns that large trade deficits have weakened U.S. manufacturing, undermined domestic supply chains and national security, and exposed the country to unfavorable foreign economic policies. The new tariffs are part of a broader effort to impose “reciprocal” trade measures that respond to tariff imbalances and non-tariff barriers faced by U.S. exporters.
The order stipulates that tariffs will apply only to the non-U.S. portion of an imported item, provided at least 20% of its value originates domestically. Customs and Border Protection has been directed to verify content claims.
While the overall effect on the health care sector remains unclear, the pharmaceutical exemption indicates an attempt to protect access to essential medications and avoid some disruptions in care. Practice administrators should monitor upcoming guidance to ensure compliance and to understand how supply chains may be affected, especially for non-exempt items such as office electronics, furnishings, or non-pharmaceutical medical supplies.
The executive order grants authority to the Secretary of Commerce and U.S. Trade Representative to adjust the tariff list in response to foreign policy shifts or domestic manufacturing changes. Reports on the declared national emergency will be submitted to Congress.
