The potential introduction of a 25% tariff on imports from Canada, proposed by U.S. President Donald Trump, could significantly impact the medical device market in both countries. Set to take effect on Saturday, this tariff threatens to drive up costs for essential medical equipment, including MRI machines, ventilators, and wheelchairs. In 2022, the value of medical device imports from the U.S. was approximately C$5.2 billion, which accounted for 38% of Canada's total medical device imports. The United States remains Canada's largest trading partner for medical devices.
The Canada-United States-Mexico Agreement (CUSMA) currently exempts medical equipment from tariffs between the two nations, allowing for a relatively stable trade environment. However, if the proposed tariffs are enacted, Canadian manufacturers may face increased production costs that could ultimately burden healthcare providers and patients alike. Many Canadian medical technology companies rely heavily on U.S.-based suppliers for raw materials and intermediary products, making them particularly vulnerable to any trade disruptions.
In 2022, Canada exported C$3.08 billion worth of medical devices to the U.S., representing 74% of its total medical device exports. The looming tariffs may not only increase costs for Canadian manufacturers but could also diminish their competitiveness in the U.S. market. Medtech Canada, a national association representing 120 medical technology companies, has raised alarms regarding the potential ramifications of these tariffs on the healthcare system.
Medtech Canada emphasized that “the integrated nature of the North American supply chain of medical technologies means that tariffs from both sides of the border will reduce market access and impact the affordability and accessibility of healthcare in both Canada and the U.S.” The organization has been actively advocating on behalf of the medical technology industry, stressing the importance of ensuring that patients and clinicians maintain access to necessary medical technologies.
The association's letter to Finance Minister Dominic LeBlanc highlighted that retaliatory tariffs imposed by Canada on U.S. products could also have an "immense" impact on the healthcare system. “We’re working with our partners in government and other key stakeholders to help ensure that patients and clinicians have continued access to all the necessary medical technologies they need,” stated a representative from Medtech Canada.
Furthermore, the potential tariffs could significantly raise the cost of health technologies in both countries, adversely affecting patients who already face numerous challenges in accessing affordable care. The organization cautioned against targeting the medical technology sector for retaliatory tariffs, as “the impact on our health-care system and patients would be too immense.”
The pandemic and subsequent supply chain challenges have underscored the critical importance of Canada's medical technology sector. Although there has been substantial growth in manufacturing within Canada, many companies remain reliant on U.S.-based suppliers. As discussions around trade continue, Medtech Canada urges careful consideration of the potential consequences that tariffs could bring to the healthcare landscape.
