Your MRI May Depend on Foreign Minerals

Senators raise alarms over medical manufacturing and supply risks tied to global trade policies

May 14, 2025

⚡️NIMITZ HEALTH NEWS FLASH ⚡️ 

“Trade in Critical Supply Chains”

Senate Finance Committee

May 14th, 2025 (recording linked here)

WITNESSES & TESTIMONIES

HEARING HIGHLIGHTS

🚛 Medical Technology Supply Chain Vulnerabilities

The hearing revealed the vulnerability of the U.S. medical technology supply chain, which depends heavily on globally sourced components like plastics, rubber, and specialized metals. Although most medical devices are assembled domestically, tariffs on these inputs could disrupt hospital supply and raise costs. Shifting production is slow due to strict regulatory approvals, making broad tariffs especially risky for patient care and system stability.

⛏️Critical Minerals for Health Manufacturing

Access to critical minerals like cobalt, dysprosium, and rare earths was highlighted as essential for producing health technologies such as MRIs and ventilators. While countries like Brazil and Vietnam hold major reserves, restrictive sourcing rules have excluded them, limiting investment. A mix of tax credits, trade incentives, and strategic sourcing partnerships was identified as necessary to reduce reliance on China and support health-linked manufacturing.

MEMBER OPENING STATEMENTS

  • Chair Mike Crapo emphasized that reliable supply chains are critical to American productivity, particularly in sectors like healthcare where timely access to components can be life-saving. He warned of China’s dominance over essential materials such as rare earths and cobalt, which are used in advanced medical devices and diagnostic technologies. Domestic regulatory hurdles, he argued, delay projects that could strengthen U.S.-based health manufacturing. Crapo called for a proactive, deregulation-friendly trade policy that ensures consistent access to medical inputs and protects America’s economic and health security.

  • Ranking Member Ron Wyden criticized the Trump administration's trade approach, stating it created instability in supply chains for critical medical goods and raised prices on everyday healthcare items. He pointed to increased costs and decreased access to essential medicines and medical supplies due to unpredictable tariff cycles. Wyden argued that lives are at risk when pharmaceutical supply chains are disrupted, and stressed that the U.S. needs a stable, bipartisan trade framework to safeguard health access and support medical manufacturing. He warned that continued tariff escalation could deepen reliance on China for medical needs, despite national efforts to re-shore production.

WITNESS OPENING STATEMENTS

  • Mr. Whitaker described the medical technology sector as a vital, innovation-driven industry supplying life-saving tools like pacemakers, imaging devices, and insulin pumps. He warned that poorly targeted tariffs could destabilize supply chains and delay production, given that many components are sourced globally and subject to strict regulatory timelines. Since most products are sold through long-term contracts with fixed reimbursement from Medicare and Medicaid, sudden cost increases are difficult to absorb. Whitaker called for med tech to be excluded from tariffs through reciprocal trade deals, to ensure both affordability and patient access.

  • Dr. Baskaran highlighted America’s dependence on critical minerals essential to health technologies such as MRI machines, medical lasers, and digital diagnostics. She explained that China’s control of 65–90% of global mineral processing was achieved through strategic trade and investment, not geology alone. She cautioned that tariffs could harm emerging U.S. mineral processing capabilities, many of which are needed to support medical supply chains. Her recommendations included flexible trade agreements with resource-rich nations and better integration of mineral sourcing into U.S. trade and industrial policies to protect health-sector resilience.

  • Mr. Isaacs emphasized that semiconductors are foundational to healthcare systems, powering medical imaging, electronic records, and AI-driven diagnostics. Tariffs that raise costs on critical components, he warned, would hinder domestic production and delay access to next-generation medical technologies. He advocated for targeted trade policy, expanded tax credits, and smart regulation to strengthen semiconductor-based health infrastructure.

  • Mr. Ragland noted that soy is not only a food product but also a component in bioplastics, nutritional supplements, and pharmaceutical inputs. He recounted the lasting damage from previous retaliatory tariffs, which caused soybean exports to China to collapse—harming both farmers and downstream health-related industries. With new tariffs emerging, he warned of similar disruptions that could affect both the import of farm inputs and the export of health-linked products. He urged policymakers to avoid trade wars that risk weakening agricultural contributions to health supply chains.

QUESTION AND ANSWER SUMMARY

  • Chair Crapo asked how trade and tax policies could better support medical supply chains, particularly under the Inflation Reduction Act. Dr. Baskaran explained that the Act’s narrow sourcing rules excluded key mineral-rich nations, limiting inputs for medical technologies. Mr. Whitaker stressed that broad tariffs on essential components like plastics and tungsten disrupt access for U.S. hospitals. Mr. Isaacs recommended targeted exemptions and phased tariffs to avoid undermining semiconductor supplies vital to health innovation.

  • Ranking Member Wyden asked about the challenges medtech companies face when adapting to trade disruptions. Mr. Whitaker responded that medical technologies often involve hundreds of global components and face long regulatory timelines, making quick adjustments to tariffs unrealistic.

  • Senator Maggie Hassan asked whether the U.S. should prioritize mineral trade with Canada to secure supply chains for medical and energy technologies. Dr. Baskaran confirmed that Canada plays a critical role in refining minerals used in medical devices, and deeper trade integration is necessary.

    Senator Hassan asked if tariffs on allied countries harm U.S. health-related exports. Mr. Isaacs said that tariffs on allied trading partners reduced market access for U.S. firms and threatened the economic scale needed to innovate in health technologies.

  • Senator Thom Tillis asked how to reduce U.S. vulnerability to foreign medical supply chain disruptions exposed during COVID. Mr. Whitaker said medtech firms had relocated production closer to the U.S., but tariffs on imported inputs remained a barrier to resilience.

  • Senator Catherine Cortez Masto explored how tax credits and trade policy could bolster domestic production of rare earth magnets vital to medical equipment. Dr. Baskaran affirmed that tax credits would offset China’s price manipulation and incentivize U.S. investment in technologies like MRIs and ventilators, while sourcing incentives for allied nations could help secure critical mineral supply chains for American health manufacturing.

  • Senator Ben Ray Luján questioned whether tariffs would disrupt access to imported technology essential for AI-driven health innovation and medical device availability. Mr. Isaacs warned that tariffs could raise costs on the 80% of chipmaking equipment that is imported, slowing progress in health applications. Mr. Whitaker emphasized that medical devices are not comparable to consumer goods and that tariffs would raise costs and restrict patient access, especially if import disruptions persisted. Mr. Ragland added that trade instability is weakening the farm economy, which in turn threatens the viability of rural health infrastructure dependent on agricultural revenues.

  • Senator Raphael Warnock asked whether tariffs on chip components would threaten health-sector manufacturing. Mr. Isaacs said tariffs could raise input costs for semiconductor facilities tied to healthcare equipment production.

    Senator Warnock asked how tariffs on raw minerals could harm clean tech and health device manufacturing. Dr. Baskaran said minerals like dysprosium, used in car and device motors, had already seen related layoffs and rising costs due to trade disruptions.

  • Senator Peter Welch asked how fertilizer tariffs affected farm viability and access to food-based health products. Mr. Ragland said fertilizer price hikes hurt all farmers, including those growing inputs for health nutrition, and would accelerate farm closures.

    Senator Welch asked how arbitrary tariffs undermine responsible policy planning for health-linked mineral trade. Dr. Baskaran said strategic, not blanket, tariffs were needed to ensure mineral supply chains remain viable for medical and defense manufacturing.

  • Senator Marsha Blackburn highlighted Tennessee’s concentration of medical device manufacturing and asked how to strengthen supply chain resilience for smaller medtech firms. Mr. Whitaker responded that broad tariffs disproportionately harm small companies relying on complex global inputs, and emphasized that short-term tariff exemptions for medical technologies would protect innovation and prevent cost increases in patient care.

  • Senator Todd Young asked how trade enforcement policies could account for the life-critical and highly regulated nature of medical devices. Mr. Whitaker responded that broad tariffs were harmful and urged a policy approach combining favorable tax and reimbursement structures with regulatory streamlining to support U.S. medtech innovation.

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