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

Key Takeaways:

• On February 1, President Trump signed executive orders implementing tariffs on imports from Canada, Mexico and China.
• The U.S. has reached agreements with both Canada and Mexico, pausing the tariffs for 30 days. A 10 percent tariff now applies to all Chinese imports, and China has responded to U.S. tariffs with retaliatory measures.
• As the situation evolves, Premier will continue to deliver key updates and data-driven solutions to help healthcare organizations navigate, and thrive in, this complex environment.

Note: This situation is dynamic, and information below is current as of February 5. Premier continues to share the latest updates in our member community (available for Premier members with log-in).

Across the global economy and interconnected supply chains, a single event can set off a domino effect – impacting an organization’s operations, bottom line and the delivery of products and services that consumers and industries depend on.

Today, supply chains are confronting a new potential challenge through significant increases in tariffs, which could include tariffs on healthcare products.

In Premier’s 2024 Supply Chain Resiliency survey, respondents anticipated continued disruptions in 2025. Eighty percent of healthcare providers and 84 percent of suppliers expected supply chain challenges to worsen or remain the same this year. And nearly 85 percent of suppliers expected regulatory policy changes to affect their supply chain strategies.

On February 1, President Trump signed executive orders implementing tariffs on imports from Canada, Mexico and China. These tariffs were set at 25 percent on Canada and Mexico and at 10 percent on China as part of a broader strategy the administration cites as addressing illegal immigration and drug trafficking.

Let’s break down the latest updates:

• Mexican Imports Tariff Delay: As of February 3, tariffs on Mexican imports have been paused for 30 days following an agreement between the U.S. and Mexico – with Mexico’s President Sheinbaum announcing additional security forces to be deployed to Mexico’s northern border.

• Canadian Imports Tariff Delay: As of February 3, tariffs on Canadian imports have been paused for 30 days following an agreement between the U.S. and Canada. President Trump announced the pause after Canada committed to a $1.3 billion border reinforcement plan, which aims to enhance border security with new helicopters, technology, personnel and resources.

• China Tariffs Take Effect: As of February 4, a 10 percent tariff now applies to all Chinese imports, with no exception process announced for healthcare supply chain importers. This is in addition to tariffs on Chinese-imported medical items including needles, syringes and certain types of personal protective equipment (PPE) that went into effect in September 2024.

• China Responds to U.S. Tariffs: China has introduced export controls on rare earth minerals and other essential components for semiconductor and high-tech manufacturing, including tungsten, tellurium, bismuth, molybdenum and indium. China has also announced tariffs, effective February 10, including a 15 percent tariff on coal and natural gas imported from the U.S. and a 10 percent tariff on crude oil, agricultural machinery, large cars and pickup trucks.

China’s retaliatory measures appear to primarily target goods that heavily support industries such as high-tech, aerospace, automotive and electronics manufacturing.

Bismuth, however, is a rare earth mineral used in medical device imaging as a contrast agent and as a shielding material to reduce radiation exposure, as well as in some pharmaceutical applications. As a result, Chinese export control may have a more direct impact on healthcare lab and imaging facilities. In 2025, China accounted for 81 percent of the world’s bismuth production.

Tariffs are not a new tool – they have historically been leveraged by the U.S. to help establish U.S industries in the global economy. Then, and today, policymaker support for tariffs varies widely. The U.S. Constitution empowers Congress to set tariffs, but Congress has generally delegated that significant power and flexibility to the President over the last 80 years.

Premier’s Leadership and Action on Supply Chain Resiliency

Enabling both supply chain and financial resiliency, Premier’s industry-leading contract portfolio, initiatives to diversify production and sourcing, disaster preparedness and response program, and technology suite serve as a collective shield to help protect healthcare organizations against sudden price increases, which can lead to shortages and inflationary pressures.

• 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 launching into the market to identify potential risks as a result of tariffs, if and as they take effect. With continued uncertainty about final tariff implementation and duration timelines, Premier’s sourcing teams remain in active discussions with suppliers on potential impacts as well as resiliency strategies that could mitigate pressures for their own organizations and their customers.

• Premier’s supply 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 consulting solutions allow organizations to gain efficiencies, realize cost savings opportunities and gain access to critical, high-quality products and services.

• Premier and our members support domestic and diverse manufacturing. Through collaborations with Prestige Ameritech, DeRoyal Industries Inc, VGYAAN Pharmaceuticals and Exela Pharma Sciences, we are bolstering the availability of domestically made medical supplies and pharmaceuticals for providers and patients – while supporting job creation and stronger local economies.

• 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). The team also recently released a roadmap with robust recommendations to enable a better, faster and smarter healthcare industry – aligned to four main public policy objectives.

Tariff policies must be weighed carefully through a risk/reward lens, particularly for healthcare products. Should tariffs’ rewards outweigh the risks and move forward, they should be deployed to spur American ingenuity – with tariff funds collected for reinvestments that encourage healthcare supply chain innovation.

While Premier generally supports the reinstatement of tariffs as a mechanism to spur domestic ingenuity and supply chain resiliency, we have significant concerns that a drastic increase in the percentage rate of any tariffs, coupled with an aggressive timeline for implementation, would not be feasible. A gradual 'glidepath' approach to tariffs implementation on healthcare products would reflect a commitment to balancing the need for supply chain resilience with the realities of healthcare delivery and finances.

Regardless of how the situation evolves, Premier will continue to deliver the key updates and data-driven solutions for healthcare organizations to navigate, and thrive in, this complex environment.

Learn More:

• Read the STAT-published byline from Premier – Tariffs on medical items should be reinvested in the health care supply chain.

• Download your copy of Premier’s 2024 Supply Chain Resiliency Report for key strategies to bolster the supply chain.

• Take a deeper dive into Premier’s solutions that can support your supply chain optimization efforts.