How the U.S. tariffs are reshaping healthcare software buying decisions in 2025
The U.S. healthcare sector is under pressure as the 2025 import tariffs begin to affect supply chains. With the reimposition of broad tariffs on nearly all imported goods, providers are facing rising costs across medical devices, pharmaceuticals, and technology.
Hospitals, clinics, and private practices already operate on thin margins. A recent survey suggests that 82% of healthcare industry experts expect a 15% increase in operational costs due to tariffs. While much of the attention has focused on medical supplies and drug costs, software procurement and digital infrastructure are also at risk.
On May 12, 2025, the United States and China announced a deal in Geneva to slash reciprocal tariffs and pause new trade measures for 90 days, cutting Chinese import duties from as high as 145% down to 10%.
Under the new deal, some of that pressure will ease temporarily. Buyers should monitor whether planned cuts are extended beyond the 90-day window.
Key trends and market insights
- Temporary relief ahead: The Geneva agreement institutes a 90-day pause and tariff cuts on Chinese imports (to 10%) and reciprocal U.S. exports (also to 10%). Suppliers and buyers should track which Harmonized Tariff Schedule lines are covered by the deal.
- Medical devices and supplies: Nearly 70% of medical devices used in the U.S. are imported. With tariffs now applied to items like surgical gloves and oximeters, procurement costs are climbing. These increases hit smaller providers hardest.
- Pharmaceutical inputs: Many finished drugs were temporarily exempt, but active pharmaceutical ingredients (APIs) from China were not. As noted by DelveInsight, this raises concerns about future shortages and price hikes.
- Digital health investments slowing: Telehealth and remote monitoring devices rely on imported electronics. According to MarketsandMarkets, new tariffs of up to 145% are making buyers reconsider planned investments.
- IT budget cuts: With rising costs across the board, many providers are delaying upgrades, including EHRs and infrastructure.
The chart above summarizes reported U.S. import duty rates before 2025 versus the announced 2025 tariffs for key healthcare product categories (prior to the Geneva deal). (MFN = Most Favored Nation/base rate; “reciprocal” refers to Trump’s April 2025 reciprocal-tariff orders). To avoid confusion, here’s how to interpret the rates:
- Mexico (medical devices): 0% for USMCA-origin devices; a 25% tariff applies only to non-USMCA imports.
- China (medical devices): The 54% rate reflects a new 10% global tariff plus a 34% “reciprocal” tariff on Chinese goods.
- China active pharmaceutical ingredients (APIs): The 245% figure reflects a stacked total of 125% reciprocal tariff, 20% drug-import penalty, and existing Section 301 duties ranging from 7.5% to 100%.
- Pharma machinery (India/EU): Major equipment now faces a 25% U.S. tariff (previously 0% under MFN).
- China (electronic components): A 125% reciprocal tariff now applies. Combined with existing Section 301 duties, effective rates on some components are even higher.
What software buyers need to know
Although software itself is not subject to tariffs, the hardware it runs on often is. Servers, networking equipment, and clinical computing devices are frequently imported.
For EHR buyers, it’s important to:
- Consider cloud over on-premise solutions: Cloud-based EHRs can reduce dependence on imported hardware. This may help lower costs and simplify operations.
- Ask about vendor infrastructure: U.S.-based vendors using domestic servers may be better insulated from tariff effects. Ask them directly where their infrastructure is located and how hardware is sourced.
- Avoid delays in upgrades: Holding off on replacing a legacy system in the hope it will save money could lead to higher costs down the road, especially when it comes to compliance or security risks.
What remote monitoring buyers should know
Tariffs affect remote monitoring devices more than most other health tech sectors. Devices like glucose monitors and blood pressure cuffs are often built with Chinese components.
If you are buying for a telehealth or remote care program:
- Audit device origins: Determine where your current devices come from and whether they are impacted by tariffs.
- Negotiate early: Lock in pricing now. Distributors are likely to raise costs as their own supply prices go up.
- Research domestic options: U.S.-made devices may be eligible for lower duties. Some may even fall under exemption categories.
- Plan for payment lag: Payers may not immediately adjust reimbursement rates to reflect increased device costs.
Tariff exemptions and how to reduce costs
While the tariff rules are broad, there are ways for buyers and vendors to seek relief. Sources like Knobbe Martens and Baker McKenzie recommend:
- Applying for product exclusion: Vendors or buyers can file for an exclusion with the U.S. Trade Representative. These are limited in scope and duration but can offer savings.
- Checking countries of assembly: Some products built or assembled in countries like India or Mexico may not carry the same duties. This depends on the supply chain and origin rules.
- Using the correct HTS codes: Errors in Harmonized Tariff Schedule (HTS) classification can result in overpayment. Work with customs experts to get this right.
The 2025 tariffs are changing how healthcare organizations plan and spend. Those in the middle of software projects should also factor in hardware and infrastructure sourcing when budgeting for new systems.
Cloud options, careful vendor selection, and proactive sourcing strategies can help avoid unnecessary costs. For EHR buyers and IT leaders, now is the time to ask detailed questions about hardware dependencies, cost projections, and long-term stability.
