U.S. hospitals face service cuts as China tariffs drive up medical supply costs

OHIO, UNITED STATES — Hospitals across the United States are bracing for financial turmoil as steep tariffs on Chinese imports drive up the cost of critical medical supplies. 

With supply chains already fragile, experts warn the added strain could force service cuts, staff reductions, and delayed upgrades, jeopardizing patient care.

Tariffs threaten hospital finances and care quality

The Trump administration’s 145% tariff on Chinese goods, including essential medical supplies like pharmaceuticals, personal protective equipment (PPE), and devices has left hospitals facing unsustainable cost hikes, Katie Adams, author at MedCity News notes. With many operating on thin margins, providers may resort to cutting services, freezing wages, or halting technology upgrades to offset expenses. 

A Black Book survey found 90% of hospital finance executives plan to pass higher costs to insurers and patients through increased service charges, while 94% of healthcare administrators may cut procurement or delay upgrades. 

Meanwhile, 84% of payers anticipate higher claims costs, and 48% expect insurance premiums to rise within a year due to supply chain pressures. Supply chain disruptions also risk care delays, particularly for time-sensitive treatments like chemotherapy and antibiotics. 

Akin Demehin of the American Hospital Association warns that shortages could force rationing or reuse of protective gear, endangering both patients and healthcare workers. 

Hospitals scramble for short-term fixes amid long-term uncertainty

Providers are auditing inventories, renegotiating contracts, and exploring alternative suppliers to mitigate tariff impacts. Tyler Giesting of West Monroe notes that group purchasing organizations (GPOs) may face broken contracts due to force majeure clauses, leaving hospitals paying more for supplies. Meanwhile, legal challenges and pending legislation, like the Trade Review Act of 2025, add to the uncertainty.

Long-term solutions, like reshoring medical manufacturing, remain unrealistic due to Food and Drug Administration (FDA) bottlenecks and limited domestic capacity. 

Dee Donatelli of Symplr argues hospitals must instead optimize resource use, as they did during COVID-19, by rethinking single-use items and streamlining costs. Donatelli says that there is a need to be creative again just like during Covid but with care quality hanging in the balance.