Supreme Court ruling adds new uncertainty to health care tariff outlook
A recent U.S. Supreme Court ruling invalidating the federal government’s use of the International Emergency Economic Powers Act (IEEPA) to impose broad, reciprocal tariffs has injected new uncertainty into U.S. trade policy—and into health care cost structures already under pressure. While the decision does not require previously collected tariffs to be refunded, it raises the likelihood that a refund process will emerge, with industry estimates suggesting up to $175 billion in potential refunds across sectors.
Health care stakeholders have cautioned that tariff policy must be carefully calibrated. Industry leaders note that disruptions to global medical technology supply networks risk unintended consequences for providers and patients, particularly as cost pressures ripple through the system.
Tariffs are already affecting health care costs
Tariffs have begun to materially impact medical technology companies and, by extension, health care providers. Industry data from Bloomberg indicates that roughly 25% of hospital supply expense is exposed to baseline tariffs, while approximately 28% of supplies are sourced outside the U.S.—a manageable risk historically, but increasingly difficult to absorb as costs rise.
Medical device manufacturers experienced margin pressure throughout 2025, with impacts accelerating in the second half of the year. While many suppliers have attempted to limit price increases to preserve customer relationships, rising tariff costs have made partial pass‑throughs increasingly necessary. This is particularly challenging given that health care pricing is often governed by fixed, multi‑year contracts and reimbursement structures that do not readily adjust for supply cost inflation.
Rating agencies have noted that providers may experience cost increases of 15% or more related to tariffs, though these increases are likely to phase in over time as contracts reset. Publicly traded health systems have highlighted tariff mitigation as a strategic priority, emphasizing sourcing optimization, vendor collaboration and operational efficiencies to offset higher supply costs.
What providers should be doing now
Tariffs, in some form, are likely to persist in the near term. At the same time, the Supreme Court’s decision creates a potential opportunity to recover previously paid duties. Providers should consider acting now by:
- Strengthening vendor partnerships and improving transparency around tariff exposure
- Revisiting contract terms, including tariff allocation and renegotiation clauses
- Enhancing supply chain efficiency and inventory management
- Preparing for potential refunds by reviewing import records and supporting documentation
Learn more about what’s happening in health care in our industry outlook.
