China's medical equipment industry is under pressure due to the intensifying trade tensions between the United States and China, largely caused by high tariffs. The U.S., which imposed tariffs of up to 245% on some Chinese imports, is China’s second-largest trade partner in medical and pharmaceutical products after the European Union. In 2024, trade between the two nations reached $34.1 billion [para. 1][para. 2].
China heavily depends on U.S. imports for high-end medical devices, including components and advanced test reagents, which are critical for its healthcare sector. Industry representatives have reported disruptions in contracts and anticipated price hikes for high-value imported consumables, which affected hospitals and patients. A medical sales representative pointed out that these challenges impact the health system, requiring time for a new equilibrium to form [para. 3][para. 4].
Some medical sectors in China remain reliant on U.S. imports, while others show progress in substitution. Orthopedic consumables, for instance, are increasingly being replaced by domestic alternatives. However, devices used in neurology interventions, such as stents and imaging tools, remain over 70% dependent on imports from the U.S. This reliance poses challenges for hospitals that perform advanced procedures [para. 5][para. 6]. Johnson & Johnson, a major U.S. exporter of advanced medical equipment to China, expects $400 million in tariff-related costs in 2025 due to increased trade duties. In its financial report, the company noted significant revenue from its medical technology division — $8 billion in the first quarter alone, of which $3.8 billion came from international markets [para. 7][para. 8].
In the large-scale medical device segment, such as MRI machines and gamma knives, Chinese manufacturers have made significant progress and are nearing global standards. However, some equipment still falls short in sophisticated hospital settings. Additionally, key components like CT tubes, essential for X-ray systems, continue to be imported from the U.S., creating supply chain vulnerabilities. Chinese experts believe that domestic production of these components could take up to three years to fully substitute imports [para. 9][para. 10][para. 12]. In 2024, domestic devices represented 43% of China's medical equipment market, a steady increase over three years. Imports have simultaneously declined as local manufacturers improve the quality of their products [para. 13].
Exports from China's healthcare sector to the U.S., valued at $19 billion in 2024, primarily consist of low-value consumables such as hearing aids and thermometers. However, these exports are also facing challenges due to tariffs and manufacturing overcapacity, with the sector expected to undergo restructuring. Despite demand for Chinese-made products in markets like the U.S., Southeast Asia lacks the capacity to replace China in this domain. An industry expert noted that China, having benefited from past trade dynamics, will be severely impacted by disruptions caused by tariffs [para. 14][para. 15][para. 16].
In summary, while China's medical device sector is adapting with increased domestic manufacturing and substitution for some imported products, reliance on U.S. components and high tariffs has created significant challenges. The industry is expected to face extensive restructuring in the coming years as it adjusts to the changing trade landscape.
AI generated, for reference only
