Article by Rashmi Raju, Medilink North of England and Yogan A Patel, MHA Baker Tilly International
Introduction
The imposition of recent tariffs by the United States has raised concerns across various sectors globally. This brief report will explore the potential impacts on UK medical device companies and UK biotech companies, key players in the country’s innovation and export sectors.
Background
The US has recently implemented tariffs on a range of imported goods. These tariffs are part of broader trade policies aiming to protect domestic industries but have significant implications for international trade relations and the global economy. The medical devices sector, which traditionally benefitted from low to zero tariffs, is now facing increased costs due to the recent announcement on U.S. tariffs.
Impact on UK Medical Device Companies
Increased Costs
UK medical device companies exporting to the US may face increased costs due to tariffs. These additional expenses can reduce profit margins and potentially lead to higher prices for US consumers, potentially decreasing competitiveness in the US market.
Supply Chain Disruptions
Tariffs could disrupt supply chains for medical device components sourced from or destined for the US. This disruption can lead to delays and increased operational costs for UK companies that rely on a seamless flow of goods across borders. This may also increase contractual complexity for products/ devices already in transit or held in U.S. inventory.
Pressure on Innovation and R&D Investment
Tariffs could affect the long-term projects, R&D pipelines, product updates and clinical trials for UK SMEs working with U.S. Investors. This will affect strategic innovation and slowing the competitive edge of the product. These disruptions may lead to delayed decision making within the investments space.
Market Access
The tariffs may limit access to the US market, which is a significant destination for UK medical devices. Restricted market access can hinder growth and expansion opportunities, forcing companies to look for alternative markets or scale down their operations. For SMEs, the additional financial burden will threaten competitiveness, margins, and long-term investments in innovation and R&D.
“The recent U.S. tariffs on UK manufactured medical devices are a real concern for our sector. For many of the companies we support, the U.S. has been a key market of growth. These trade measures not only impact commercial momentum but also patient access to innovative technologies. We are supporting our members navigate through this challenging phase while also actively working to identify and accelerate opportunities in international markets.“
Dr Rashmi M. Raju
International Manager
Medilink North of England
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Impact on UK Biotech Companies
R&D and Investment
Biotech companies in the UK often rely on international collaborations and investments, particularly from the US. Tariffs can create an environment of economic uncertainty, potentially affecting investment flows and collaborative research and development activities.
Export Barriers
Tariffs on biotech products can act as barriers to export, making UK biotech products less competitive in the US market. This can lead to a decrease in export volumes, affecting the revenue streams of these companies.
Regulatory Challenges
Alongside tariffs, heightened regulatory scrutiny and compliance costs can add layers of complexity to the export process. UK biotech companies may need to navigate additional administrative burdens, further straining their resources.
Conclusion
The recent US tariffs pose several challenges for UK medical device and biotech companies. Increased costs, supply chain disruptions, and market access limitations are key concerns for medical device firms, while biotech companies face hurdles related to R&D investment, export barriers, and regulatory challenges. Navigating these impacts will require strategic adjustments and exploring alternative markets.
Use exhibitions to diversify risk and open new markets. MEDICA is the world’s largest medical technology trade exhibitions in the world attracting visitors from more than 150 countries. Medical Fair Asia attracts visitors from more than 60 countries and provides UK MedTech companies a gateway to markets such as Singapore, Malaysia, Indonesia and Thailand.
Medilink remain committed to supporting the sector in navigating this challenge and ensuring UK maintains its position as a global leader in the Medical Technology sector.
For more information on exhibiting at medical technology trade exhibitions through Medilink contact [email protected]
Comment from MHA – Baker Tilly International one of our Corporate Partners
MHA | How will President Trump’s global tariffs impact UK businesses?
“Although the Pharma sector has, in some parts (such as finished medication under Chapter 30 of the Tariff) been excluded from the new US reciprocal tariffs, there is still a significant impact on sales of medical equipment and devices. Government data, via UK Trade Info, confirmed that exports of medical devices, falling under Chapter 90, totalled £116m in 2024. The addition of a 10% tariff on these goods will increase annual costs in the supply chain by c£12m.
This is just the base line figure as these tariffs are based on the origin of the products so , for many, the exported goods may have been manufactured in countries such as China. In the case of China, a 34% tariff will be applicable on the imported goods.
Although medicines are excluded from these tariffs, the raw materials may not. Where applicable, any import of raw materials into the US, for medicine production, will increase production costs and, where imported into the UK, increase the purchase price. For UK importers, this must be reviewed and discussed with suppliers to ensure any additional tariff costs are calculated to manage costs and profits.
It is critical that UK exporters review their supply chains and ensure the correct origin is known to minimise the risk of incorrect tariffs being applied. Where possible, it is also worth considering if the First Sale Rule can be applied to the US import, thereby reducing the value applicable to the tariffs.”
Yogan A Patel
Partner | Head of Life Sciences / Pharma / MedTech
MHA – Baker Tilly International (Medilink North of England Corporate Partner)
Additional Support
US imposes sweeping tariffs on all imports as Trump declares ‘national emergency’ to ‘increase competitive edge’
Chartered Institute of Export & International Trade