President Trump’s tariffs have sent shockwaves throughout every sector of the American economy. Recently, the U.S. government has upped its focus on using tariffs to encourage domestic industry growth while discouraging economic reliance on imports. Launching on April 2nd, the ripple effects have already hit industries like automotive manufacturing and agriculture. Healthcare may soon experience the fallout, with 71% of surveyed physicians concerned it will impact medication costs and access.
From rising production costs to potential drug shortages, the healthcare industry faces major challenges. Physicians, already dealing with inflation, staff shortages, and reimbursement issues, worry these changes will affect the supply chain, including medical devices and essential medications. Let’s explore how tariffs will impact physicians and patients, with insights from the frontline to help you prepare for what’s to come.
What are tariffs and how do they work?
To understand how tariffs could affect healthcare, it’s important to grasp the basics. Tariffs are taxes imposed on imported goods, typically aimed at either protecting domestic industries or as a negotiation tool in trade agreements. For example, the U.S. may impose tariffs on the GLP-1 drug Semaglutide (which originates from China) to encourage domestic production, aiming for more self-reliance.
Typically, tariffs are a percentage of a product’s value. A 10% tariff means a $100 product would have a $10 tax added, taking the total cost to $110. Sermo surveyed physicians in our community to determine their reaction to the tariffs. We asked, “How concerned are you about the impact of tariffs on access to affordable medications in your practice?”
- 34% Extremely concerned – patients already struggle with drug costs
- 37% Somewhat concerned – could worsen costs and access issues
- 17% Neutral – unclear how much this will affect my patients
- 6% Not very concerned – our supply chain seems stable
- 5% Not concerned at all – I don’t think tariffs will have much impact
The function of tariffs in macroeconomics is complex. While they aim to level the playing field in trade imbalances, they often lead to unintended consequences, such as supply chain disruptions or inflated costs, especially if they escalate into a trade war between countries. A Sermo member and dermatologist sums this precarious situation perfectly, “Although our supply chain has not yet been affected, we feel we should, in the words of Captain Kirk, brace for impact.“
Potential positive impacts of tariffs on healthcare
Despite the challenges, tariffs aren’t all doom and gloom for the healthcare industry. Physicians and policymakers alike have pointed to positive impacts tariffs might bring if combined with careful political implementation.
U.S. companies could increase domestic development of products
One bright spot in the tariff debate is reducing dependence on foreign suppliers. Higher import fees could encourage domestic investment and innovation, particularly in manufacturing medical supplies and equipment. For instance, localizing drug production could reduce vulnerabilities in global supply chains and increase patient access.
In Sermo’s survey, physicians shared their opinions on whether or not tariffs could benefit the U.S. healthcare system in the long term by encouraging domestic production. 20% said yes – that boosting local manufacturing will improve resilience, however 28% said possibly only with significant policy support. 19% were not sure as the pros and cons seem evenly balanced. 33% said no, citing that short-term harm may outweigh gains and that tariffs will increase costs without fixing supply chains.
Reduced international dependence
During the height of the COVID-19 pandemic, U.S. healthcare faced significant challenges in sourcing necessary PPE and medications due to international bottlenecks. By increasing the cost of foreign medications and medical supplies, tariffs could accelerate investment in a more resilient domestic supply chain.
The possibility of long-term resilience
Short-term challenges from tariffs could lead the U.S. healthcare sector to develop greater resilience over time. Tariffs may encourage healthcare providers and supply chain managers to adopt more strategic procurement practices, such as collaborating with group purchasing organizations (GPOs), diversifying suppliers, and using data-driven spend analytics to manage costs and maintain quality standards.
Increased government revenue
From 2015 to 2017, the average U.S. tariff rate on imports was about 2.8–2.9%. During the U.S.-China trade war under President Trump (2018–2020), this rate temporarily spiked, with some products as high as 13.8% in 2019, though most suggest it stayed around 3–4% for most products. By 2024, the average tariff rate dropped to 2.5%. However, new tariff proposals for 2025, including blanket tariffs, could push this rate above 10% if Trump’s broadest plans are carried through.
By July 2025, the government had collected $104 billion—more than double the previous year. Under Trump’s latest proposals of 10% on all imports and 60% on Chinese imports, annual tariff revenue could reach $140–$200 billion in 2025 and over $1.5 trillion in the next decade. The funds generated from tariffs can be reinvested in healthcare initiatives, infrastructure improvements, patient access, or funding groundbreaking research.
Potential negative impacts of tariffs on healthcare
While Conservative politicians are betting on long-term benefits from tariffs, the immediate reality feels far less encouraging for many physicians. Tariffs carry significant drawbacks that could hinder patient care and elevate costs across the board. An internal medicine doctor on Sermo writes, “Although the US needs secure access to medications and equipment, it will take years to shift production to this country. Even if this happens, costs will likely increase due to higher labor costs here as opposed to overseas. Tariffs will not help”.
In a recent Sermo poll, physicians shared their views on which areas of healthcare will be most affected by increased tariffs. The top concern, cited by 42%, was drug prices and access to medication. Another 23% pointed to supply chain reliability and logistics, while 22% highlighted the availability and cost of medical devices. Only 5% of respondents identified pharmaceutical innovation and R&D, and another 5% pointed to clinical operations and hospital funding as the most impacted areas.
Increased production costs
Tariffs raise the price of imported medical products, raw materials, and essential components. Rising supply costs are often passed down to patients through higher insurance premiums, out-of-pocket expenses, and service fees. Physicians and clinics may experience expenses rising by 15% or more, especially for products heavily reliant on global supply chains like pharmaceuticals, personal protective equipment (PPE), and medical devices.
Supply chain disruptions
Reliance on global suppliers is deeply entrenched in the healthcare sector. Nearly 70% of medical devices sold in the U.S. are fully manufactured abroad. On March 4, 2025, President Donald Trump announced a 25% tariff on all imports from Canada and Mexico and a 10% tariff on goods from China. These countries are vital to the U.S. health care supply chain. Canada supplies lower-cost prescription medications, Mexico produces devices like syringes, diagnostic tools, and surgical instruments and China provides products such as masks, gloves, and respirators.
Physicians may face stalled shipments, have to renegotiate contracts, or search for alternative suppliers—actions that take time and can result in temporary shortages or delays of critical supplies. This is particularly risky during public health emergencies or periods of high demand, when supply chain resilience is crucial.
Increased drug prices
The pharmaceutical sector is particularly vulnerable to these tariffs. Many prescription drugs are manufactured abroad in Canada, Mexico, and China. The U.S. imported $8.4 billion in medications from Canada in 2024. China is also a key supplier of raw pharmaceutical ingredients and finished generic drugs, which make up 90% of U.S. prescriptions. Tariffs could drive up medication costs, impacting both health care providers and patients—especially those relying on affordable drugs for chronic conditions.
Potential drug shortages
If manufacturers reduce exports to the U.S. due to tariffs, there could be shortages of essential medications, placing vulnerable populations at significant risk. This will strain physicians and clinics who rely on “just in time” supply logistics and don’t necessarily have a medical stockpile. In the long run, we could see a ramp-up in domestic supply, although this will not necessarily result in cheaper prices for providers.
Risk of stagflation
Stagflation occurs when inflation rises while economic growth stagnates, and it poses a real danger to the 2025-2026 U.S. economy. Historically, tariffs have often contributed to stagflation by increasing costs without improving productivity. The resulting economic climate may lead to decreased funding for public health programs, placing greater financial burdens on individuals in need of healthcare services.
Medical institutions must pay more for essential supplies
82% of surveyed doctors in this report expect tariff-related import expenses to increase hospital and health system costs by 15% within the next six months. Certain products, like enteral syringes, now face tariffs as high as 245%, making price hikes especially sharp for items with few or no alternative suppliers.
Hospital systems are seeing annual cost increases estimated in the tens of millions of dollars. Everyday essentials like syringes or surgical gloves could become more expensive, forcing institutions to make tough budgetary decisions.
Negative impact on innovation
Healthcare industry associations and experts warn that tariffs would hurt innovation, reduce jobs, and increase healthcare costs. The added financial burdens and uncertainties can deter investments in cutting-edge medical technology. Some companies even face revenue drops due to retaliatory tariffs in foreign markets, which further dampens their global competitiveness and capacity to fund innovation.
Independent clinics and smaller hospitals may struggle more than larger networks
Higher costs hit small facilities harder. Tariffs significantly raise prices on imported medical supplies, devices, and pharmaceuticals. Independent clinics and small hospitals, which have less purchasing power or diversified supplier contracts than large systems, are less able to negotiate discounts or absorb sudden cost increases.
Operating margins in independent clinics and rural hospitals are notoriously slim, often falling below 4%. Even a modest hike in supply costs could push these providers into deficit, risking service cuts, staff reductions, or even closure.
Higher prices for medical devices
Medical devices often rely on a complex global supply chain to source raw materials, including specialized plastics, metals, semiconductors, and electronic components, from multiple countries. Tariffs impose additional taxes on imported materials, leading to higher manufacturing costs. From MRI machines to surgical equipment, tariffs could mean skyrocketing costs for devices already priced in tens of thousands of dollars.
Economic contraction will reduce healthcare funding
The Penn Wharton Budget Model (PWBM) projects that Trump’s 2025 tariffs will cut U.S. long-run GDP by 6% and wages by 5%, signaling a major economic slowdown affecting household incomes. The Organisation for Economic Co-operation and Development also expects U.S. economic growth to drop from 2.8% in 2024 to 1.6% in 2025 due to higher tariffs.
J.P. Morgan and Bloomberg predict a U.S. recession in late 2025, with GDP shrinking 1% in Q3 and 0.5% in Q4. Rising tariffs have disrupted supply chains, increased market volatility, and heightened economic uncertainty.
It’s no secret that physicians have already begun to feel the effects of tariffs on medical supplies, drugs, and equipment in their workplaces. 16% of surveyed doctors on Sermo say prices have already risen noticeably. An additional 21% are experiencing shortages or delays, 34% say they haven’t been impacted yet, but are preparing for potential disruption.
What physicians are saying about tariffs and healthcare
The precarious nature of these changes has healthcare workers on high alert. Physicians are voicing a range of opinions about how tariffs may affect the healthcare industry.
In a recent Sermo poll, we asked physicians how patients will be most affected if tariffs lead to higher healthcare costs. Here’s how they voted:
- 32% said patients will delay or forgo healthcare treatment due to affordability
- 24% think that low-income and chronically ill patients will suffer most
A Sermo member and general practitioner warned, “Not only will drug prices be impacted, but so will medical supplies, which will make access harder for vulnerable individuals.”
- 21% believe out-of-pocket expenses will increase across the board
- 16% think insurance premiums will rise
Only 7% of those surveyed don’t believe the impact will be significant.
“An increase in tariffs will increase the cost of healthcare, whether in procuring drugs or conducting an investigation,” said an orthopedic surgeon from the U.S.
Some physicians see potential for growth, arguing that focusing on domestic production could safeguard U.S. medical reserves long term. “It seems to me that the tariffs may increase prices in the short term, but they will bring manufacturing back to the US and, in the longer term, will guarantee essential medicines and medical supplies will be available at a reasonable cost,” noted a family medicine doctor on Sermo. An internal medicine physician agrees, “We need to make more medical items here instead of relying on imports.”
Key takeaway
Tariffs are a double-edged sword. On the one hand, they present a genuine opportunity to foster self-reliance and bolster domestic manufacturing. On the other, they run the risk of inflating costs, reducing innovation, and jeopardizing access to healthcare essentials. The resulting uncertainty in the healthcare industry—particularly for smaller clinics and financially vulnerable patients—demands a thoughtful approach that minimizes harm while maximizing benefits. As one pediatrician on Sermo said, “The most alarming aspect is reduced access to medical supplies due to higher costs. However, tariffs could benefit local production. The healthcare system should prepare by diversifying suppliers and investing in domestic manufacturing.”
We surveyed over 1,000 physicians, and only 45% agreed that healthcare leaders are adequately prepared, at least to some degree, to manage trending changes in healthcare. For physicians grappling with the complexities of tariffs, Sermo remains a crucial platform for peer collaboration, real-world insights, and mutual support. Curious about how others are adapting to these shifts? Join Sermo today to engage in discussions that seek solutions and shape the future of healthcare.
