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Will Trump Tariffs Make or Break Healthcare Space? 3 Stocks to Rely On
Urmimala Biswas
5 min read

In This Article:

The American trade structure is witnessing a transformative shift, thanks to the Trump administration’s sweeping new tariff policy. Within the healthcare industry, the impact seems to be complex and widespread.

Apparently, pharmaceuticals are exempt from the steep reciprocal tariffs. However, the broader healthcare ecosystem—from hospitals to MedTech companies—is left exposed to the hefty tariffs, which may lead to significant retaliation from global trade partners and major supply chain disruption.

In this uncertain environment, investors looking to maintain exposure to healthcare may find greater stability in fundamentally strong large-cap U.S.-based stocks. Companies such as Universal Health Services UHS, BioMarin Pharmaceutical BMRN and Abbott Laboratories ABT stand out as resilient options in the face of escalating trade tensions.

Pharma Gets a Pass But Healthcare Supply Chains Brace for Impact

Pharmaceuticals have explicitly escaped from the heightened reciprocal tariffs, a notable win for drugmakers who lobbied intensely for the exemption. This move spares over $200 billion in annual U.S. pharmaceutical imports from immediate cost increases. However, the industry remains wary, considering Trump’s prior comments floating a “25% or higher” tariff on foreign-made drugs. That proposal, if reintroduced, could trigger pricing pressure and result in renewed challenges. A recent JAMA (The Journal of the American Medical Association) study showed that just a 25% tariff on Canadian drug imports alone could generate a $750 million increase in U.S. costs.

At the same time, medical devices and healthcare supplies appear to be bearing the brunt of the tariff fallout. According to a MedTech Dive report, AdvaMed — one of the medical device industry’s largest trade associations—reaffirmed its strong opposition to broad-based tariffs following the Trump administration’s announcement of new duties targeting most U.S. trading partners. The group warned that such measures would delay innovation, lead to job losses and drive up healthcare costs. Meanwhile, providers have been preparing for the financial strain, as the American Hospital Association and the Healthcare Distribution Alliance were unsuccessful in securing exemptions for essential medical supplies despite months of lobbying.

Economic Headwinds, Geopolitical Fallout

Beyond direct costs, the new tariffs introduce macroeconomic volatility. Goldman Sachs increased the odds of a U.S. recession from 20% to 35% last week and now again to 45%, citing trade-related uncertainty. Meanwhile, retaliation from affected trade partners, particularly the EU and China, could further squeeze access to vital materials and technologies.

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