UPDATE – Premier Supply Chain Special Report: Potential Impacts of Tariffs on Healthcare

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Key Takeaways:

• Effective April 5, the Trump Administration implemented 10 percent tariffs on imported goods worldwide.
• Reciprocal tariffs have been paused through early July, apart from China, where tariff rates are currently up to 245 percent.
• Premier continues to deliver key updates and data-driven solutions to help healthcare organizations navigate this complex environment.

Note: This situation remains dynamic, and the information below is current as of April 28. Premier continues to share the latest updates with our member community (resource site available to Premier members with log-in).

Much has changed since Premier's first special report on tariffs in early February. The Trump Administration's tariff measures have continued to evolve, reflecting broader shifts in trade strategy and global economic dynamics.

More recently, President Trump announced a comprehensive tariff policy with a baseline 10 percent tariff on all imported goods, effective April 5, 2025.

The Administration's tariff measures have now entered a critical transition period.

On April 9, a 90-day pause on reciprocal tariffs was announced, extending through early July. During this window, the universal 10 percent tariff rate will apply to most countries and products originating from them - with the notable exception of China, which faces up to a 245 percent tariff on U.S. imports. China has retaliated against President Trump's country-specific tariffs by raising its levies on U.S. goods to 125 percent from 84 percent.

As of April 28, the table below provides an overview of various U.S.-imposed tariffs on different countries and entities. Please note that this information will likely remain dynamic.

* USMCA-compliant goods are those that meet the specific rules of origin outlined in the United States-Mexico-Canada Agreement (USMCA).

What Tariffs Could Mean for U.S. Healthcare

The Trump Administration's pause is intended to allow U.S. trading partners time to engage in reciprocal trade discussions, but for the healthcare industry, it prolongs a period of volatility and cost uncertainty.

The new tariff measures, paired with the rollback of de minimis exemptions, may introduce significant complexity and cost pressures, including for personal protective equipment, medical devices, pharmaceuticals, foodservice and capital projects.

For example:

• Enteral feeding syringes have no current known manufacturing outside of China and are currently subject to a 245 percent tariff.
• Tariffs on imported goods could affect the prices and availability of the approximately 75 percent of U.S.-marketed medical devices that are manufactured out of the country, and more specifically the 69 percent of U.S.-marketed devices that are manufactured exclusively outside of the U.S.
• Pharmaceutical imports, which had been exempt from initial tariff rounds, are now under consideration. President Trump announced in early April that "major tariffs" on pharmaceuticals will soon be introduced.

China continues to play an integral role in manufacturing medical devices, pharmaceutical ingredients and other technological components. Because ex-U.S. manufacturing is a critical reality in sourcing for healthcare operations, escalated trade tensions with China could create further supply chain availability and cost risks for the healthcare industry.

More generally, while the Administration's tariff policy is aimed at addressing trade imbalances and revitalizing domestic industries, we recognize the added pressure that tariffs could present to hospitals and health systems - and to our industry at large - without a thoughtful, preemptive partnership for the procurement of supplies.

A January survey of 200 healthcare industry experts found that 82 percent expect tariff-related import expenses to drive up hospital and health system costs by 15 percent within the next six months.

Preparing for Tariffs: Three Steps Healthcare Leaders Can Take Now

Healthcare organizations are already burdened by product shortages, sustained inflation and persistently thin operating margins, all of which make any added import costs particularly difficult to absorb. The tariff changes only add stress as we seek definitive answers for clarity and to model the potential impact.

Healthcare organizations and leaders need a proactive strategy to help safeguard their supply chains and budgets. Here's how to get ahead:

• Call for Supplier Transparency: Ask suppliers for detailed data: manufacturing country of origin, exposure risk, product attributes, and other relevant information and evidence. This level of reporting is essential to inform your strategies for resilience - both now and for the long term.
• Identify Vulnerabilities: Leverage business intelligence and financial planning tools to assess risk and variability across your contracts. Pinpoint which agreements lack tariff protections to create a customized exposure map for your organization.
• Explore GPO Alternatives: If you are buying supplies under local agreements or other contracts without built-in tariff protections, evaluate whether an equivalent GPO-contracted product exists. Transitioning to GPO contracts may help provide insulation from potential price impacts.

Taking these steps now can help healthcare organizations absorb less financial impact and navigate tariff-related disruption with greater confidence.

Premier's Leadership and Action on Supply Chain Resiliency

Premier is engaged in ongoing discussion and discovery to better understand how tariffs might affect our contracted suppliers and products. We recognize that the process of assessing tariff impacts, particularly for manufacturers with complex global supply chains, is highly nuanced.

Amid the evolving trade policy announcements, our team is compiling and analyzing supplier updates, leveraging our robust supply chain data, aligning impacted categories with applicable countries and rates, and seeking as much clarity as possible from Premier-contracted suppliers.

To help our group purchasing organization (GPO) members and customers navigate these complexities:

• Premier's contract portfolio is designed to deliver value, including long-term stability and protection for competitive pricing. Additionally, as part of our competitive bidding process, Premier receives data on where product and raw materials are sourced, safety stock requirements, data on quality records and rapid replenishment capabilities. We remain committed to contracting with suppliers who value transparency and demonstrate manufacturing resiliency, redundancy and quality investments.
• Premier is evaluating new contracts to identify potential risks as a result of tariffs, if and as they take effect. To support fair and transparent pricing discussions, we've established a framework that outlines the expectations, data and supporting evidence required of Premier-contracted suppliers.
• Premier has developed tools to help assess potential tariff-related impacts on both medical-surgical products and pharmaceuticals at the individual health system level. Premier's Foodservice team is also providing information < /a>on contracted items and country of origin to help members navigate tariff developments and potential impacts on food. (Links/resources available for Premier members with log-in).
• Premier encourages the entry of new, reliable domestic manufacturers across the full spectrum of healthcare products, including personal protective equipment, medical devices and pharmaceuticals.
• Premier's transparent,expedited sourcing process enables us to bring high-quality, cost-effective products to our members in as little as two weeks. This process also helps ensure that suppliers meet our rigorous standards for safety, efficacy and value, while supporting a more responsive healthcare supply chain.
• Premier'ssupply chain technology suite helps organizations accurately manage contracts, automate invoicing and payments, predict supply shortages, streamline operations and manage supply chain costs, all in one place. Together with our technology suite, Premier's supply chain optimization team allows organizations to gain efficiencies, realize cost savings opportunities and gain access to high-quality products and services.
• Premier's Disaster Preparedness and Response team offers dedicated support for members during an emergency or disruption, providing real-time intelligence and key resources, including our weekly product watch list (available for Premier members with log-in), to minimize impacts to patient care.
• Leveraging actionable data, collaboratives and experience working with healthcare organizations nationwide, Premier's Advocacy team continues to advocate for strategies that enhance supply chain resiliency, including proposed recommendations for tariff reinvestments to serve this goal (STAT byline available with log-in). 50 organizations also recently joined Premier in sending a letter of support for the bipartisan, bicameral Medical Supply Chain Resiliency Act. This Premier-endorsed bill would enable the President to enter into trade agreements with trusted trade partner countries to diversify sourcing for critical medical devices and pharmaceuticals, protect public health and bolster national security.

Targeted and thoughtful tariffs on healthcare products could offer a chance to bolster supply resilience and ensure access to critical medical supplies. But they cannot live in a vacuum, lest they become just another cost without real impact. Premier believes that tariffs need to be put to work, funding innovation that ensures long-term stability and a stronger, more resilient U.S. supply chain.

A strong, sustainable supply chain isn'tjust good policy - it's the foundation of high-quality, affordable and accessible healthcare for all Americans. Premier stands ready to partner with policymakers to build lasting solutions that make a difference and ensure American patients have access to the medical products they need.

For More:

• Watch Premier's April 23 Tariff Webinar (available for Premier members with log-in) that unpacked the latest tariff actions, their specific implications for the healthcare industry and practical strategies to help mitigate the impact.