The potential indirect impact of American tariffs on healthcare manufacturers
Following the announcement by the US administration to impose a 25 percent duty on the import European steel and a 10 percent duty on European aluminium, BES Corporate’s Barend ter Haar shared his thoughts regarding the potential impact of UK manufacturers.
Trade, tariffs and Trump
In early June, new tariffs were introduced by the US on steel and aluminium, resulting in higher import charges for anyone importing metal to the United States from the EU, as well as Canada and Mexico.
Originally, the EU and UK were exempt from the tariffs introduced by President Trump on grounds of national security, to allow time for ongoing negotiations.
The exemption ended at midnight on the 31st May however, leading to the new taxes to take effect as of the 1st June.
Discussing the effect of the tariffs on BES Corporate, Barend ter Haar told THIIS: “Since most of the products we handle are medical products, they still benefit from zero rated duties in both directions across the Atlantic.
“However, it is the indirect effect of the new import tariffs that will be noticeable.”
In particular, Barend highlighted how the effect of the recent announcement on stainless steel imports from America had an indirect impact on the supply chain, causing some US products to become uncompetitive in UK domestic market.
Whilst many medical products are exempt from duties, a large proportion of the components used to source products are not and following the announcement by the Trump administration, prices of commodities such as steel saw an immediate impact.
“We have been bringing in industrial sized equipment washers, the AquaPhase, for loan stores and hospitals for over 20 years from a specialist company in Wisconsin. We were first hit, immediately after the Brexit referendum, when the pound’s fall against the US dollar meant our costs went up over 25% overnight,” he explained.
“The washers are made from Stainless Steel. When President Trump first indicated the introduction of tariffs, the cost of the steel rose 40% overnight. This raised the cost of the products we were importing by a further 20%. The post-Brexit pound revaluation and the steel tariffs have combined to make these US products barely competitive in the marketplace, and we have turned to a German company as an alternative supplier.”
In the wake of the American tariffs, the EU has been preparing counter-measures to respond to the tariffs, imposing retaliatory tariffs on US-based products and potentially leading to a trade war.
For Barend, he believes the US tariffs will not have the desired effect of protecting US steel producers, instead continuing to make US imports progressively less competitive in the global market.
“Where Trump is being short-sighted and unrealistic – and this happened some years ago when the US Government last introduced steel import tariffs – is that the US steel producers closed down years ago, and those that still existed did not have means to make the specialist steels most sought after in the US,” stated Barend.
“Thus, the imposition of tariffs has made US raw materials more expensive for US manufacturers, and thus will make their domestic products and exports more expensive. A lose-lose game throughout.”