Navigating Tariff Impacts on the Supply Chain: Preparing for an Unpredictable Future

How tariffs and trade policies are reshaping supply chain strategies and what S2S Global customers can expect in the short-term.

The impact rising tariffs have on the healthcare supply chain is detrimental. Given the constant shifts in geopolitical climates, policy changes, and natural disasters, supply chain executives can never fully relax knowing their inventory and cost forecasts are not immune to disruption.

As significant changes unfold in the US legislature, we are closely monitoring several updates regarding supply chain disruptions and their impacts. These measures are set to take effect over the next two years and beyond.

Tariffs Impact on Healthcare Supply Chain – An Overview

In September 2024, the USTR concluded their review of President Bidens proposed China tariffs on US imports such as electric vehicles, solar cells, steel, and medical equipment. The reason behind these tariffs stems from US President Biden’s mission to counter China’s unfair trade practices.

The current proposed tariffs are to be phased in over the next three years. Tariffs to take effect in 2024 include electric vehicles (EVs), steel, aluminum, syringes, needles, and more. Some tariffs will see the steepest increase by 2026.

These tariff increases are intended to bolster up a strong domestic medical supply industry that was essential during the COVID-19 pandemic. It aims to support those domestic manufacturers and suppliers who continue to produce products used daily in every hospital across the country.

Domestic Manufacturing Becoming a Focus to Mitigate Tariff Impacts

The federal government and the private sector continue to invest in domestic industrial ventures in order to ensure other medical products reach American health care workers and patients and they have access to critical medical supplies when needed.

American companies continue to struggle with the competition (China) and low-priced supplies available on the market. With that being said, more domestic options mean more market competition and the drive to bring cost savings to customers who seek domestic options.

What you need to know when it comes to YOUR Supply Chain 

• The tariff rates on syringes and needles will increase from 0% – 100% in 2024.
• For certain personal protective equipment (PPE), including certain respirators and face masks, the tariff rates will increase from 0-7.5% to 25% January 1, 2025.
  • Additional increases from 25% to 50% will occur January 1, 2026 (masks).
• *Partial Supply Impact* Nitrile & Latex Exam Gloves tariffs will increase to 50% January 1, 2025, then to 100% January 1, 2026.

Tariffs that do NOT impact S2S Global Customers at this time

• Products like lithium-ion EV batteries will see a tax jump from 7.5% to 25% in 2024.
• The tariff rate for battery parts will see a tax jump from 7.5% to 25% in 2024.
• The tariff rate on natural graphite and permanent magnets will increase from zero to 25% in 2026.
• The tariff rate for certain other critical minerals will increase from zero to 25% in 2024.
• Tariffs on rubber medical and surgical gloves will increase to 50% in 2025 and 100% in 2026.
  • S2S Surgeon Gloves not impacted and are a great option for those impacted by tariffs

How the recent election could impact future tariffs

In light of the recent election results, many are questioning the future of our supply chain amid talks of even higher tariffs; not to mention other geopolitical issues making headlines. While the future remains uncertain, partnering with a trusted supply chain partner who proactively addresses potential challenges and seeks solutions is a crucial first step toward navigating what’s ahead.

To learn more about S2S Global’s supply chain strategy and product offerings, visit www.s2s-global.com.