How Trump's 100% Semiconductor Tariffs Will Impact Medical Device Manufacturers
#MEDeviceBoston
Date: August 8, 2025
Estimated Read Time: 6 Minutes
Introduction
The medical device industry faces a significant new challenge as President Donald Trump announced plans to impose 100% tariffs on semiconductor imports during a White House press briefing on August 6, 2025. This announcement has sent shockwaves through the healthcare technology sector, where semiconductors are essential components in everything from diagnostic equipment to implantable devices. As medical device manufacturers scramble to understand the implications, this blog explores what these tariffs mean for the industry and outlines strategic approaches to navigate this changing landscape.
Background: The Semiconductor Landscape
Semiconductors—the tiny chips that power modern technology—have become increasingly critical to healthcare innovation. However, the U.S. position in global semiconductor manufacturing has weakened significantly over the past three decades. According to the Semiconductor Industry Association, America's share of global semiconductor production has fallen from 37% thirty years ago to just 12% today, creating dependencies on foreign suppliers, particularly in Asia.
The Trump administration's tariff announcement comes amid an ongoing Section 232 investigation into semiconductor imports, assessing their impact on national security and domestic supply chains. This investigation follows similar probes that led to sector-specific levies for steel, aluminum, and copper.
The administration's stated goals include:
- Reducing dependence on foreign semiconductor suppliers
- Strengthening national security by ensuring domestic chip production
- Revitalizing U.S. manufacturing capacity
- Creating leverage in international trade negotiations
Impact on Medical Device Manufacturers
Unlike during the first Trump administration when medical devices and life-saving supplies were exempt from tariffs, the current administration has not announced similar carve-outs. This represents a significant shift in policy that directly affects healthcare technology companies.
- Cost Increases: With nearly 70% of medical devices sold in the U.S. manufactured abroad, the 100% tariff on semiconductor components will dramatically increase production costs.
- Supply Chain Disruptions: Medical device manufacturers face potential delays as they rush to secure semiconductor supplies or shift manufacturing strategies.
- Product Development Delays: New medical technologies requiring advanced semiconductors may face extended development timelines as companies navigate sourcing challenges.
- Pricing Pressures: Manufacturers will need to decide whether to absorb increased costs or pass them on to healthcare providers and ultimately patients.
- Manufacturing Relocation: Companies may accelerate plans to move production to the U.S. to avoid tariffs, though this requires significant capital investment and time.
- Component Redesign: Some manufacturers may explore redesigning products to use domestically available semiconductors, potentially compromising performance or features.
- Market Consolidation: Smaller medical device companies without the resources to adapt quickly may become acquisition targets for larger corporations.
- Innovation Impacts: The increased cost and complexity of accessing cutting-edge semiconductors could slow the pace of medical technology innovation in the short term.
Action Items: Navigating the New Tariff Environment
Immediate Steps for Medical Device Manufacturers
- Conduct Supply Chain Audits: Identify all products containing semiconductor components and assess vulnerability to tariffs.
- Explore USMCA Compliance: Determine if your manufacturing operations qualify for exemptions under the United States-Mexico-Canada Agreement.
- Engage with Industry Associations: Join forces with organizations like AdvaMed to advocate for medical device exemptions similar to those granted during the previous administration.
- Develop Multiple Sourcing Strategies: Establish relationships with both domestic and international suppliers to create supply chain flexibility.
- Review Pricing Strategies: Analyze how increased costs will affect product pricing and develop transparent communication strategies for customers.
Long-term Strategic Approaches
- Invest in Domestic Manufacturing: Consider establishing or expanding U.S.-based production facilities to reduce tariff exposure.
- Explore Component Substitution: Research alternative components or technologies that could replace imported semiconductors.
- Leverage R&D Tax Credits: Offset increased costs by maximizing available tax incentives for research and development activities.
- Develop Strategic Partnerships: Collaborate with domestic semiconductor manufacturers to secure priority access to U.S.-made chips.
- Monitor Policy Developments: Stay informed about potential exemptions, delays, or modifications to the tariff implementation.
Local Sourcing Solution: MedDevice Boston
By working with local suppliers like MedDevice Boston, manufacturers can reduce tariff exposure while supporting the development of domestic semiconductor production capacity. Their understanding of medical device regulatory requirements makes them particularly valuable partners during this transition period.
Register for MEDevice Boston and boost your manufacturing with the leading medical device suppliers and startups local to the New England region.
The imposition of 100% tariffs on semiconductor imports represents a significant challenge for medical device manufacturers, but also creates opportunities to strengthen domestic supply chains and reduce long-term vulnerabilities. By taking proactive steps to assess exposure, explore alternative sourcing, and potentially reshape manufacturing strategies, companies can navigate this disruption while continuing to deliver essential healthcare technologies.
As the industry adapts to this new reality, collaboration between manufacturers, suppliers, industry associations, and policymakers will be essential to ensure that innovation in medical technology continues unabated. The companies that respond most effectively to these challenges will emerge stronger and better positioned for success in an increasingly complex global marketplace.
- Trump, D. (2025, August 6). White House Press Briefing on Trade Policy. Retrieved from White House Official Website.
- Semiconductor Industry Association. (2023). "Strengthening the Global Semiconductor Supply Chain in an Uncertain Era." Retrieved from https://www.semiconductors.org/strengthening-the-global-semiconductor-supply-chain-in-an-uncertain-era/
- NBC Boston. (2023, February 9). "Local Leaders Look to Increase Manufacturing as Semiconductor Shortage Continues to Impact Electronics." Retrieved from https://www.nbcboston.com/news/local/local-leaders-look-to-increase-manufacturing-as-semiconductor-shortage-continues-to-impact-electronics/2969850/
- Karp, E. (2025, June 30). "Medical Manufacturers and Tariffs: Where Things Stand Today." Forbes. Retrieved from https://www.forbes.com/sites/ethankarp/2025/06/30/medical-manufacturers-and-tariffs-where-things-stand-today/
- Alpha-Sense. (2025). "Impact of Tariffs on Healthcare." Retrieved from https://www.alpha-sense.com/blog/trends/impact-tariffs-healthcare/
- Sermo. (2025). "How Tariffs Could Impact Healthcare." Retrieved from https://www.sermo.com/resources/how-tariffs-could-impact-healthcare/
- BBC News. (2025). "What are semiconductors and why is Trump threatening 100% tariffs?" Retrieved from https://www.bbc.com/news/articles/cly3r664q1eo
- Neuffer, P. (2025, August). "Trump plans 100% tariffs on semiconductor imports." MedTech Dive. Retrieved from https://www.medtechdive.com/news/trump-tariffs-semiconductors-100-percent-apple-ceo-tim-cook/757039/
- Deloitte. (2024). "How is the semiconductor shortage affecting medtech?" Retrieved from https://www2.deloitte.com/us/en/blog/health-care-blog/2022/how-is-the-semiconductor-shortage-affecting-medtech.html
