Relief might be fleeting for the healthcare industry after Supreme Court strikes down most tariffs

The Supreme Court decision striking down most of the Trump administration’s tariff policy negated many of the tariffs that have affected healthcare and other industries since beginning in August 2025.

The high court issued a 6-3 ruling Friday that found tariffs initiated under the International Emergency Economic Powers Act (IEEPA) are invalid because the statute does not grant authority for the executive branch to implement tariffs.

Specific tariffs canceled by the decision include duties of 25% on nonexempt imported goods from Canada and Mexico and a 20% hike on a previously issued tariff against China.

More broadly, reciprocal tariffs levied to close deficits with numerous trading partners must be retracted. Those were set at 10% at baseline but were increased to as much as 50% in a few cases. Others were lowered or voided following trade deals.

But the ruling does not affect sector-specific tariffs such as increased levies on imports of steel and aluminum, for which the tariff has been 50%, although the administration reportedly has been considering modifications due to concerns about the impact on consumer prices. Those tariffs and others on copper, timber and automobile parts can stand because they were assessed using separate statutory language, as was a set of pre-2025 tariffs on China.

In response to the court ruling, President Donald Trump immediately imposed a 15% global tariff via executive order, although any such tariff is statutorily limited to 150 days unless Congress approves an extension.

Trump also said he has long-term tariff options that would allow the administration to “charge much more” than previously. For healthcare, such an option could be in place by the time the temporary tariffs expire.

Why a big healthcare tariff still looms

One option for legally implementing tariffs involves a formal investigation by the U.S. Commerce Department into an industry- or product-specific trade deficit. The investigation requires a notice-and-comment period in the Federal Register and concludes with a report to the president, who then determines whether the deficit constitutes a national security threat that justifies tariffs.

One such investigation got underway in September and would have substantial implications for healthcare if the findings result in tariffs. The investigation is examining imports of personal protective equipment (PPE), “medical consumables” and medical equipment and devices.

A context for the investigation is the experience of the COVID-19 pandemic, which exposed gaps in the healthcare supply chain, especially with respect to PPE. In a published notice, the administration solicited comments on whether the trade deficit amounts to a national security risk.

Per the notice, medical consumables include single-use or short-term-use items with which to diagnose, treat and prevent conditions. Among the array of items that fall into the category are medical and surgical instruments, supplies and related parts. Medical equipment and devices subject to the investigation include carriages and wheelchairs, crutches and hospital beds.

Brand-name pharmaceuticals were the focus of a separate tariff investigation that was paused to allow for negotiations between the White House and manufacturers.

The tariffs on medical supplies could be ready for implementation within the next few months. By law, the investigation must conclude no later than 270 days after its start date, meaning a deadline of late May to submit the report to Trump, who then would have 90 days to make a final decision.

Pushback on the pending tariffs

“The complete onshoring of all medical supply chain elements is not feasible, much less in a short period of time,” the U.S. Chamber of Commerce stated in an October comment letter regarding the investigation. “U.S. healthcare systems thus depend on certain imports for goods not domestically available in sufficient quantities, requiring a blend of both domestic and international sourcing capabilities.”

The chamber noted that many medical devices already are indirectly affected by the legal excises on steel, aluminum and copper. Given the potentially adverse impact of adding a new tariff, the chamber recommended narrowing the investigation to specific healthcare items.

A foreseeable consequence of implementing the tariffs on a broad scale would be shortages of some products, resulting in constrained supply access for patients, hospitals and other stakeholders, the chamber wrote. Steep cost increases also could be expected.

“Hospitals would, in many instances, be unable to pass on the higher costs imposed by the tariffs,” the chamber wrote. “Policymakers should not regard this as a win, however, as hospitals’ tight margins — particularly in rural hospital systems — would instead compel reductions in service and capability.”

Healthcare stakeholders urge restraint

In a comment letter, the Association of American Medical Colleges (AAMC) echoed some of the chamber’s points and said any tariffs resulting from the investigation should be limited in duration and apply only to items “for which there is a demonstrated national security threat and only after it has been determined there is a sufficient supply of domestically manufactured goods to meet demand.”

Another consideration should be an exceptions process for vital supplies and devices, perhaps based on FDA lists of critical devices and medical device shortages, AAMC wrote.

The American Hospital Association (AHA) submitted a comment letter explaining that tariffs resulting from the investigation should adhere to an established exemption allowing for duty-free imports of medical devices that improve outcomes and quality of life for Americans with chronic conditions and disabilities.

Devices that the AHA says qualify for the exemption, known as the Nairobi Protocol, include pacemakers, insulin pumps and prosthetics.

The National Rural Health Association (NRHA) submitted comments to the effect that rural hospitals, along with federally qualified health centers and rural health clinics, could be particularly harmed by the pending tariff.

One of the NRHA’s recommendations, should the tariff take effect, is to establish a Medicare supplemental payment to help small, rural hospitals with medical supply purchases and other capital expenditures. Critical access hospitals also could be recipients if reimbursement to those hospitals does not cover the heightened supply and equipment costs.

What the Supreme Court did not decide

A key question to be resolved is whether importers are entitled to refunds for amounts already collected under the overturned tariff schemes, and if so, how that compensation might filter down to product purchasers.

The Supreme Court’s opinion did not resolve the issue of refunds, the amounts of which could be massive given that federal data as of December showed $133 billion in tariffs collected for 2025. Additional litigation could be needed to settle the refund question.

The administration reached trade deals with some countries following imposition of the tariffs, and the effect of the Supreme Court decision on those pacts remains to be seen. Among the deals was a limited agreement in late 2025 with China, although negotiations on the details were continuing.