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9 July 2018Americas

US tariffs on med tech prevent patient access: trade association

A medical technology trade association has warned that the US tariffs recently implemented in response to Chinese IP theft may hinder patient access to life-saving technologies.

The Medical Imaging & Technology Alliance (MITA), which represents companies operating in the medical imaging equipment field, urged US President Donald Trump’s administration to consider their plea on Friday, July 6.

MITA said it has called on the US government to give “special consideration” for medical imaging devices and components which are affected by the tariffs.

Last month, Trump said that the US would implement a 25% tariff on $50 billion worth of goods from China that contain industrially significant technology, “in light of China’s theft of IP and technology and its other unfair trade practices”.

Tariffs on $34 billion worth of Chinese products became effective on July 6. On the same day, Trump said that US tariffs could also be applied to more than $500 billion worth of Chinese goods, which is approximately the total amount of US imports from China last year.

Trump said the tariff targets goods that “contain industrially significant technologies”, and are central to China’s strategic plan to “dominate the emerging high-tech industries”. As well as medical technologies, this includes automobile machinery and industrial equipment.

China retaliated with its own 25% tariff on US products, including medical equipment and chemical products, which are worth approximately $50 billion.

MITA sent US trade representative Robert Lighthizer a letter in May, in which it raised “significant concerns” about the impact the proposed tariffs would have on the importation of medical imaging devices.

According to the letter, medical devices are “integral to global public health” and “should be exempt from trade sanctions as a humanitarian good”.

The letter explained that a large amount of the trade impacted by the tariffs is actually inter-company trade in the manufacturing industry. For example, a manufacturer in China will send products to their manufacturing facility in the US, where they are “transformed” and re-exported to places including China.

“Taxing these products on both ends of the supply could serve as a disincentive to manufacture in the US,” MITA said.

Following Trump’s section 301 investigation into China’s trade practices, which found China’s practices to be actionable under the Trade Act 1974, MITA undertook a survey of manufacturers in the medical imaging field.

The survey determined that subjecting medical technology products and components from China to section 301 tariffs may cost American manufacturers more than $138 million this year. X-ray devices, such as CT scanners, are expected to be the most significantly affected, the survey suggested.

According to MITA’s most recent plea, a “timely and robust exemption process” from the tariffs needs to be arranged in relation to medical imaging products and components which come from China.

Patrick Hope, executive director at MITA, said the tariffs on imaging products “will harm the American medical technology sector’s ability to stay competition and will adversely affect the US economy in ways that could compromise patient access to care”.

He added: “Though the administration has stated that it will implement an exemption process, we have not yet seen any information about how or when it will do so.”

AdvaMed, a medical device trade association, has similarly claimed that the tariffs may slow the growth of the US manufacturing industry and prevent timely access to medical technology.

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