The impact of tariffs on healthcare in 2025
Healthcare companies are experiencing turbulence, but taking steps to stabilize
US industries are familiar with the hefty import tariffs that have hammered them in the past year. But the large volume of imports in healthcare may affect the sector more than most. An estimated 62 percent of the medical devices in the US come from other countries.1 In addition, nearly 70 percent of available US-marketed devices are manufactured solely outside the US2—making the US government’s steep new tariff regimes particularly burdensome for the healthcare industry.
To find out how organizations in various industries are responding to a changing trade environment, KPMG LLP conducted a survey of senior executives.3 At that time, our healthcare respondents revealed that they’re holding the line for now, adapting quickly to the mixed impacts of tariffs and rethinking their investment strategies.
Imports and cost pressures
US healthcare organizations rely heavily on global suppliers. Our survey showed that China is the top import source for healthcare respondents (averaging 29 percent of imports), followed by Europe (16 percent) and Canada (12 percent). Tariffs have already bumped up the costs of imports from these sources: 43 percent of executives surveyed noted a 16 percent to 25 percent rise in the cost of products from China, while Europe and Canada saw more moderate increases.
Mixed feelings
Healthcare organizations fear the impact of tariffs, but so far companies’ market positions haven’t been dislodged. Just 20 percent of our survey respondents reported a weakened competitive position. Notably, while 43 percent of respondents indicated that 11 percent to 25 percent of their product portfolio was directly affected by tariffs and 57 percent reported no change in customer demand. Gross margins decreased for only 23 percent of respondents—the lowest among all sectors surveyed—though 43 percent anticipate future margin declines.
Coming home
Notably, despite uncertainty about higher tariffs, 47 percent of our healthcare sector respondents—higher than the proportion of executives surveyed overall—expressed confidence in the stability of current US tariff levels for planning and investment, outpacing the 33 percent who still feel insecure. While 37 percent are proceeding cautiously with capital investments, 40 percent have made no changes. But almost everyone is prepared for what may come next.
Despite uncertainty about higher tariffs, 47 percent of our healthcare sector respondents—higher than the proportion of executives surveyed overall—expressed confidence in the stability of current US tariff levels for planning and investment.
Ketan Patel
Principal, Healthcare Consulting Sector Leader, KPMG US
In a strategic move, most healthcare respondents are still revamping their investment strategies. Many are increasing investment in domestic markets (39 percent), lobbying for government support (39 percent), and reconfiguring supply chains (39 percent). No change in hiring or job loss was reported by 40 percent, while 23 percent reduced jobs by 1 percent to 5 percent. About a third of healthcare respondents are actively evaluating reshoring, with over two-thirds considering it at least somewhat feasible. However, higher labor costs—67 percent of respondents cited this as a major roadblock—and operating expenses, along with capital investment requirements, are significant hurdles to coming home.
Leveraging AI and analytics
Technology plays a pivotal role in tariff response strategies. Among our overall respondents , 47 percent said that they use artificial intelligence (AI) for scenario modeling, with workforce analytics and planning tools also gaining traction. Among healthcare respondents, 43 percent expect to use generative AI in the same manner they use it today, whereas 40 percent expected that the technology would be an integral part of the success of their tariff response and trade strategy.
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The healthcare sector’s response to tariffs is resilient, adaptable, and innovative. While challenges remain, organizations are leveraging technology, rethinking supply chains, and investing in strategic risk management. As the trade environment continues to evolve, businesses that embrace flexibility and data-driven decision-making will be best positioned to thrive.
Footnotes
1. “FDA globalization,” September 19, 2025
2. “Impact of Trump tariffs on US medical device market,” Medical Device Network, November 22, 2024 (https://www.medicaldevice-network.com/analyst-comment/trump-tariffs-us-medical-device-market/)
3. In September 2025, KPMG surveyed 300 US-based senior executives in various functions about their views on the US proposed tariffs and their effect on their company and industry. Of the total surveyed executives, 30 represented healthcare.
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