How Trump’s Tariffs Could Threaten Innovation, Investment, and Access in Global Healthcare

by: Adam Brown, MD MBA

For healthcare business leaders, public health officials, and clinicians around the globe, it feels like we are moving from crisis to crisis. The world has moved on, but hospitals, health systems, practices, and caregivers are still recovering from the financial shocks of the pandemic. And now we face a new threat — one that could quietly undermine innovation, investment, and access to care all over the world. 

President Donald Trump already has imposed tariffs on all imports into the United States from Canada and Mexico. He has added a 10 percent baseline tariff for all imports from all countries and, in a few months, is expected to impose reciprocal tariffs on more than 60 countries the Trump administration has erected significant trade barriers to U.S. products.

Then, in mid-April, launched a Section 232 investigation into imports of pharmaceuticals. This investigation, which will look at the impact imports have on U.S. national security, could lead to high tariffs on drugs imported into the United States. The goal is simple - reshoring. 

Countries around the world have responded in kind, imposing penalties of their own on U.S. exports crossing their borders. 

These tariffs will impose new costs on every patient, every provider, and every innovator. On its own, Johnson & Johnson expects to incur about $400 million in tariff-related costs this year, The Associated Press reported. The costs will be felt primarily within its medical technology unit, which makes a range of medical devices and surgical products. 

A Global Industry, At Risk

Tariffs on European-manufactured healthcare products could create a chilling effect on innovation. Why? Because these manufacturing hubs are not just factories, they are sites for pilot programs, clinical trials, and product refinement.

Places like Clonmel, Ireland (Boston Scientific), Winterthur, Switzerland (Zimmer Biomet), and Cork (GE Healthcare) are centers of excellence where companies test and scale their next-generation technologies. If importing from these regions becomes prohibitively expensive, firms may deprioritize research and development (R&D) in Europe, or delay time-to-market for critical innovations.

The result? A fractured innovation pipeline. Slower product launches. Reduced cross-border collaboration. And a delay in the availability of life-saving tools for patients.

Additionally, of the world’s leading U.S.-based healthcare companies do rely on manufacturing hubs throughout Europe to supply key products and components to the U.S. market. Along with Johnson & Johnson, Medtronic, Stryker, Abbott, Zimmer Biomet, Philips, and Dexcom all have significant operations in countries like Ireland, Switzerland, Germany, Poland, and the Netherlands. These European facilities produce everything from orthopedic implants to diagnostic tests, surgical robots, and insulin pumps. 

President Trump’s tariff will not just affect the cost of goods, the consequences will cascade through global supply chains, pricing structures, R&D cycles, workforce dynamics, and even public-private investment flows.

Perhaps this is why, in a recent letter to the head of the European Commission (EC), nearly three dozen global pharmaceutical companies pleaded for help to maintain their operations in the European Union. In the letter, which was sent to EC President Ursula von der Leyen, the signatories, which include Pfizer, Eli Lilly, and AstraZeneca, noted they already face cost disadvantages in Europe since their products are less costly there. To improve the odds of survival, companies asked the EU to simplify regulations, including for multi-country clinical trials for drugs, and also asked for relief from a fee the sector will soon need to pay to protect wastewater from micropollutants.

Increased Costs for U.S. Patients and Providers and Reduced Investment, Especially in Europe

Tariffs are a tax, one that is typically passed on to the end user. According to the American Progress Institute, “Empirical research shows that, over the past several years, the cost of U.S. tariffs has been passed through entirely to consumers. According to the Budget Lab at Yale, Trump’s tariffs are expected to raise prices this year by 2.3 percentage points, costing American households an average of $3,800 annually.” In the United States, medical devices and equipment imported from Europe will become more expensive, affecting everything from surgical tools and infusion pumps to imaging systems and diagnostics. This cost inflation will hit U.S. hospital systems, government payers, and ultimately, patients or consumers.

At a time when U.S. hospitals are already navigating razor-thin margins (median at 7%) and patients are facing unprecedented levels of medical debt, tariffs that affect the healthcare supply chain are likely to increase costs for everyone. And in value-based care arrangements, where providers are already managing financial risk, this kind of unpredictability in the supply chain is more than inconvenient, it is destabilizing.

We are likely to see job losses around the globe too. 

European countries, in particular Ireland, Spain, Poland, and Hungary, have spent decades cultivating healthcare manufacturing as part of their economic development strategies. These facilities support thousands of jobs and inject tax revenue into local communities.The U.S. tariffs will cause multinational firms to pause or cancel expansion plans in Europe. Instead, these companies may reroute investment to Asia or lower-risk countries outside the European Union. Maybe this investment will head to the United States, but that bet is not a sure one. 

Even if the United States does benefit from reshoring, in the long run such moves could erode the strategic trust between the United States and EU, disrupting the regulatory harmonization and research collaboration that have fueled decades of medical progress. 

Healthcare Cannot Afford a Trade War

While tariffs may be politically expedient (and it is not clear they are given world stock and bond markets’ reaction to them and given President Trump’s falling approval numbers), they are economically shortsighted, especially in healthcare. 

The healthcare industry relies on stability, precision, and trust. Introducing uncertainty into the supply chain could lead to long-term damage that far outlasts any single administration.

Healthcare innovation is borderless. It depends on global partnerships, integrated systems, and shared investment in science. Tariffs on healthcare goods do not just shift where things are made, they risk weakening the entire ecosystem on which patients.

As a physician, healthcare executive, and educator, I urge policymakers and healthcare leaders to oppose the Trump tariffs and highlight how they will harm patients, innovation, and global cooperation. Because when we fracture the system that delivers care, we all pay the price.