Dive Brief:

• The U.S. Trade Representative announced Tuesday some medical devices are now exempt from the 25% tariffs placed on $34 billion of certain Chinese goods that went into effect one year ago. More determinations on pending requests for exemption will be made on a periodic basis, according to Joseph Barloon, general counsel for the Office of the USTR.
• AdvaMed has been active lobbying the administration for exemptions from tariffs. In recent testimony to the USTR, the trade group said tit-for-tat retaliation between the U.S. and China undermines President Donald Trump's objectives for a strong domestic medical technology industry.
• Some device components are no longer subject to the tariffs, such as veterinary ultrasound devices, certain parts and accessories of electro-surgical instruments and dental X-ray alignment and positioning apparatuses. But many items AdvaMed requested be exempted, such as pacemakers, appear to remain on the 25% tariff list for now.

Dive Insight:

Any importer will be able to take advantage of the exemptions granted to 110 product descriptions, even if they did not file an exclusion request, according to the Tuesday USTR notice.

The medical device industry will continue to work with USTR and officials in China as trade talks proceed, according to Ralph Ives, AdvaMed executive vice president of global strategy and analysis.

"AdvaMed strongly opposes tariffs by both sides on medical technology products that help save and improve millions of lives every day," Ives said in a statement. "We remain hopeful for a successful conclusion of the negotiations, which are delicate and with broad-reaching implications that our industry is watching closely on behalf of the patients we serve."

The U.S. currently is the largest supplier of medical devices to China, supplying more than 30% of its medical device and diagnostic imports, but AdvaMed fears the trade war could adversely effect that relationship if it continues.

"Chinese patients will continue to have access to innovative medical technology, but from other sources," AdvaMed recently told USTR. "China will look for countries outside the United States – Europe, Japan, Southeast Asia – as alternative sources for U.S. technologies. AdvaMed and our members do not endorse imposing import tariffs on medical technology as a means of changing China’s behavior in our industry."

The new exclusions apply retroactively to the July 6, 2018, effective date of the tariffs, and extend one year from Tuesday, according to the USTR.

Items AdvaMed requested that are now exempted from the 25% tariff include:

• Veterinary ultrasound device with black-and-white image quality used as a medical diagnostic tool (described in statistical reporting number 9018.12.0000)
• Microwave ablation antennas, whether or not with attached controls, as parts of ablation systems used to ablate live tumors (described in statistical reporting number 9018.90.6000)
• Parts and accessories of electro-surgical instruments and appliances, other than extracorporeal shock wave lithotripters (described in statistical reporting number 9018.90.6000)
• Smoke evacuation pencils with accompanying tubing and hoses designed to integrate smoke evacuation into electrosurgery by combining both features into a single handpiece, which is designed to apply mono-polar electrosurgical energy to target tissue in a surgical setting while simultaneously evacuating smoke from the surgical site (described in statistical reporting number 9018.90.6000)
• Suction coagulators, consisting of a hand-piece with mechanical and/or electrical controls and a disposable shaft, used for the coagulation of tissue and aspiration of fluids during surgical procedures (described in statistical reporting number 9018.90.6000)
• Vessel sealing and dividing devices that use electrical energy to separate and seal tissue during open or laparoscopic surgical procedures, consisting of a handpiece with mechanical and/or electrical controls, and a bipolar electrode intended to deliver electrosurgical current from a system generator directly to tissues for cutting/coagulation/ablation (described in statistical reporting number 9018.90.6000)
• Dental X-ray alignment and positioning apparatus, each valued over $5,000 (described in statistical reporting number 9022.90.6000)
• Multi-leaf collimators of radiotherapy systems based on the use of X-ray (described in statistical reporting number 9022.90.6000)
• Overhead tube suspension used to hold and position X-ray generating equipment (described in statistical reporting number 9022.90.6000)
• Instruments and apparatus that chemically analyze food to detect the presence of gluten or peanuts, valued at less than $55 per unit (described in statistical reporting number 9027.80.4530)