China Tariffs are Impacting Medical Device Shortages

The last thing the United States saw coming was the novel coronavirus. Now that’s it’s here and in full swing, it has become obvious that the trade wars with China are impacting shortages of much needed medical supplies. According to Stanley Chao, a business consultant, “We desperately need thousands of ventilators as well as millions of respirators, test kits, latex gloves, hospital gowns, pipette tips, biohazard waste bags, hand sanitizers, and more.” In fact, Eric Boehm, writer for Reason, reports that the tariffs placed by President Trump are preventing much needed ventilators and other medical equipment from reaching hospitals.

To solve this problem, General Motors is working alongside OEM Ventec to supply 30,000 ventilators. According to Boehm, “Ventec will provide the designs and GM the manufacturing muscle.” Hospitals can expect the first shipment of ventilators towards the month’s end. But will this be enough?

In the meantime, the United States is feeling the impact of the trade war during this pandemic. Why? Because China already has the complex supply chains in place to manufacture ventilators and other medical equipment – not an easy task. In fact, General Motors has noted that it takes more than 700 components to create a ventilator and some of these parts need to be bought from China. Unfortunately, the trade war could curb GM from accessing these parts in a timely and cost efficient manner.

The medical supply chain has been interrupted in other areas as well. For example, the Wall Street Journal recently published an article that stated importers of hand sanitizer and disinfectants are reporting shortages and have requested tariff relief as a consequence. These items are absolutely necessary for the protection of both patients and staff at hospitals and medical centers across the country.

None of this comes as a surprise since medical professionals warned that imposing tariffs on China would severely hamper public health during a crisis. And here we are.

The supply chain for medical devices is so complex that one device may be shipped back and forth between the United States and China several times before it is complete. During these multiple transitions, taxes are applied, which eats into the medical supply company’s profits and, therefore, discourages the medical supply companies from sourcing material from China. But where else can they get what they need in such a short amount of time?

The answer keeps bringing us back to China, whose manufacturing chain is once again up and running and looking for customers. China is ready to help the United States and let President Trump save face in the process. In fact, China’s ambassador to the United States has recently dismissed any idea that the virus came from the United States via the U.S. Army’s visit to China last winter.

Diplomatically, China wants a good relationship with the United States. This is business after all – oh and saving lives, which is more important than saving face. China is ready to manufacture the much needed medical supplies we need during the pandemic. The question is whether Trump will accept and end the trade war for the sake of health and safety.