What do U.S. tariffs mean for Canadian medical device companies?

The looming threat of 25% U.S. tariffs imposed on goods from Canada presents significant challenges for medical device companies. Despite lobbying by industry associations on both sides of the border, medical devices — including raw materials and parts — are not exempt. In response, Canada has implemented 25% retaliatory tariffs on a wide range of U.S imports, effective the same date. While finished medical devices are not directly targeted, the tariffs encompass products that may be integral in the manufacturing and assembly of medical devices (see full list here).

As a result, some Canadian medical device manufacturers will see their costs increase twice: first when importing materials from the U.S., and second, when exporting finished devices back to the U.S. To remain competitive, companies should consider the following strategic adjustments:

Explore alternative markets, such as Europe, to mitigate reliance on U.S. trade. Europe represents the second-largest medical device market globally, accounting for more than 25% of the world market. Despite the complexities introduced by the Medical Devices Regulation (MDR) and In Vitro Diagnostic Medical Devices Regulation (IVDR), the regulatory environment in Europe is becoming more predictable, and notified body capacity has improved. Exploring the European market can offer a viable alternative to mitigate the impact of U.S. tariffs.

Assess and optimize supply chains to reduce costs. Historically, north-south cross-border trade has been more straightforward than east-west trade within Canada because of the country’s vast geography. However, the recent tariffs may change this dynamic. By engaging with domestic suppliers for materials, parts, and manufacturing, medical device companies can minimize reliance on cross-border trade, thereby reducing exposure to tariffs and associated uncertainties. This approach not only mitigates tariff impacts but also strengthens domestic supply chains, enhancing resilience against future trade disruptions.Several updates to the Canadian Medical Devices Regulations (CMDR) directly impact MDEL holders. Here’s what you need to know:

Actively engage with industry associations and government entities to seek support during this period. These organizations can offer resources, facilitate connections with local service providers, and advocate for favorable trade policies on behalf of the industry.  The Canadian government publishes a list of industry associations as part of its Medical Device Industry Profile.

At PASB MedTech, we possess extensive experience in the quality and regulatory requirements, as well as market considerations, for Europe (including the UK and Switzerland), the United States, and Canada. We can support your EU market entry through services including:

• Global regulatory strategy development
• Quality system considerations
• Testing requirements
• Technical documentation preparation
• Notified Body selection
• Supplier evaluation

Contact us today for more information!

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