Hardware, Software, Apps, Devices: Where could UK HeathTech be hit the hardest with US tariffs?

Exec Summary

US tariffs could indeed affect the UK HealthTech industry in 2025, though the impact depends on how they’re applied and how the UK responds. The US is a major market for UK HealthTech exports, think medical devices, diagnostics, and digital health tools.

In 2023, the UK exported £60.4 Billion in goods to the US, with pharmaceuticals alone accounting for £8.8 billion. HealthTech, including MedTech and diagnostics, is a chunk of that too, though exact figures vary. If tariffs hit these sectors, costs could climb, squeezing UK firms that rely on US sales.

Take medical devices: the US imports a ton of them, and the UK’s a key player. Tariffs, like the 10% already slapped on UK goods or the 25% on steel and aluminium, could jack up prices for US buyers. That might mean lower demand, hitting UK companies’ bottom lines. The American Hospital Association’s already worried about this, warning that tariffs on medical supplies could mess with availability and cost in the US.

For UK firms, that’s a double whammy, less market access and pressure to cut prices to stay competitive.

Digital health is trickier.

The UK’s Digital Services Tax (DST) pulls in £800 million yearly, taxing US tech giants like Amazon and Meta. Trump’s griped about DSTs globally, and the UK’s hinted at tweaking it to dodge broader tariffs. If that happens, digital HealthTech platforms might skirt direct hits, but any US retaliation could still disrupt cross-border data flows or partnerships, vital for stuff like AI diagnostics or TeleHealth.

Then there’s the supply chain angle. UK HealthTech leans on global inputs, semiconductors for devices, raw materials for drugs. US tariffs on places like China (10-20%) or Canada (25%) could hike costs for those components, even if the UK’s not directly targeted. The OECD’s already flagging this as a “drag on global activity,” and the UK’s not immune. If firms like GSK or smaller MedTech startups face pricier imports, they might pass that on to the NHS or patients, or eat the loss and stall innovation.

On the flip side, some argue tariffs could push UK HealthTech to pivot, focus more on domestic production or EU markets. DeepSeek R1’s low-cost AI could help here, letting firms optimise locally without huge budgets. But that’s a long play; short-term, it’s disruption city. Jobs could take a hit too, the IPPR thinks 25,000 UK auto jobs are at risk from car tariffs. HealthTech’s not that exposed, but the ripple’s real.

Will it happen? Hard to say, Trump’s tariffs are a moving target. The UK’s negotiating hard for exemptions, banking on the “special relationship.” If they dodge pharma or device-specific levies, the damage might stay minimal. But if not, expect higher costs, tighter margins, and a rethink of where UK HealthTech plants its flag.

Nelson Advisors > HealthTech M&A

Nelson Advisors specialise in mergers, acquisitions and partnerships for Digital Health, HealthTech, Health IT, Healthcare Cybersecurity, Healthcare AI companies based in the UK, Europe and North America. www.nelsonadvisors.co.uk

We work with our clients to assess whether they should 'Build, Buy, Partner or Sell' in order to maximise shareholder value and investment returns. Email lloyd@nelsonadvisors.co.uk

Nelson Advisors regularly publish Healthcare Technology thought leadership articles covering market insights, trends, analysis & predictions @ https://www.healthcare.digital

We share our views on the latest Healthcare Technology mergers, acquisitions and partnerships with insights, analysis and predictions in our LinkedIn Newsletter every week, subscribe today! https://lnkd.in/e5hTp_xb

#HealthTech #DigitalHealth #HealthIT #NelsonAdvisors #Mergers #Acquisitions #Growth #Strategy #Cybersecurity #HealthcareAI #Partnerships #NHS #UK #Europe #USA #Canada

Nelson Advisors

Hale House, 76-78 Portland Place, Marylebone, London, W1B 1NT

Contact Us

lloyd@nelsonadvisors.co.uk

Meet Us

Digital Health Rewired > 18-19th March 2025

NHS ConfedExpo > 11-12th June 2025

HLTH Europe > 16-19th June 2025

HIMSS AI in Healthcare > 10-11th July 2025

How could the recent US tariff announcement affect UK HealthTech suppliers?

The recent US tariff announcement, rolled out in early April 2025 under President Trump’s “Liberation Day” trade policy, could throw a wrench into the works for UK HealthTech suppliers. With a 10% baseline tariff on nearly all UK exports to the US—plus steeper 25% hits on specific sectors like steel, aluminium, and cars, the ripple effects could sting, even if HealthTech gets some breathing room. Here’s how it might shake out.

First, direct costs could climb for physical HealthTech exports like medical devices and diagnostics.

The US is a massive market, £60.4 Billion in UK goods went there in 2023, with MedTech a solid slice of that pie. The 10% tariff, effective April 5, jacks up prices for US buyers, hospitals, clinics, whoever’s importing. Posts on X and reports like the Financial Times hint Trump’s eyeing pharmaceuticals and chips next, which could drag in drug-delivery devices or imaging tech reliant on semiconductors. If those tariffs land, UK suppliers might see margins shrink unless they eat the cost or pass it on, risking lost sales to US competitors or local producers Trump’s trying to boost.

Supply chains could get messy too. HealthTech isn’t an island, devices often use components from China (10-20% tariffs) or Canada (25% if delayed tariffs kick in). The American Hospital Association’s already fretting about shortages from global disruptions, and UK firms could face higher input costs or delays if, say, Chinese rare-earth metals for imaging tech get squeezed.

The OECD warns this could slow global growth, hitting UK suppliers reliant on smooth cross-border flows. Smaller players might struggle most, big dogs like GSK (50% of sales from the US) have US plants to dodge some pain, but startups lean on exports and imports more.

Digital HealthTech might dodge the worst, tariffs don’t hit software directly. But if the UK’s Digital Services Tax (DST) tweak to appease Trump flops, US retaliation could snag data-sharing or partnerships key to platforms like DeepSeek R1-powered systems. The DST pulls £800 million yearly; scrapping it might save tariffs but irk domestic critics, per Euronews. Either way, uncertainty could spook US investors or clients, stalling deals.

There’s a flip side, some UK suppliers might pivot. DeepSeek R1’s local deployment could let firms lean on domestic or EU markets, cutting US reliance. The Guardian notes a potential flood of cheap goods from China rerouting here, which could lower costs for UK HealthTech assemblers, though it risks swamping local makers if unchecked. The NHS, already budget-strapped, might push back on pricier imports, forcing suppliers to innovate or discount.

Jobs and growth? Shaky. The IPPR flags 25,000 UK auto jobs at risk from car tariffs; HealthTech’s less exposed, but a 1% GDP drop (government forecaster’s worst-case) could tighten R&D cash.The BBC says a deal’s “practically done” to ease this, but Trump’s unpredictable, May 1’s the deadline before UK retaliation kicks in.

Net result: UK HealthTech suppliers face higher costs, supply hiccups, and market wobbles, especially for device makers. Digital might skate by, but only if data flows hold. Smart firms will lean on local AI like R1 or EU ties to cushion the blow—otherwise, it’s a rough ride.

Why would UK HealthTech suppliers suffer from US tariffs?

UK HealthTech suppliers could suffer from US tariffs due to a mix of direct cost increases, supply chain disruptions, and market pressures, all tied to the US being a key trading partner. The recent US tariff announcement in April 2025, slapping a 10% baseline on most UK exports, hits physical HealthTech goods like medical devices and diagnostics right in the wallet.

The US is a huge market for these suppliers; in 2023, the UK shipped £60.4 Billion in goods there, with MedTech a notable slice. That 10% tariff means higher prices for US buyers, hospitals, clinics, distributors, which could shrink demand if they turn to cheaper US-made alternatives or competitors from countries with lower tariffs.

Then there’s the supply chain headache. UK HealthTech doesn’t operate in a vacuum, devices often rely on components from places like China (10-20% tariffs) or Canada (25% if those kick in). If those inputs get pricier or delayed, production costs rise. Big players like GSK, with 50% of sales from the US, might offset some pain with stateside plants, but smaller suppliers exporting finished goods or sourcing globally don’t have that cushion. The American Hospital Association’s already sounding alarms about supply shortages, and UK firms could get caught in that crunch.

Market dynamics add another layer. If US buyers balk at higher prices, UK suppliers lose volume, squeezing margins already thin in a competitive field. Digital HealthTech might dodge direct tariffs, software isn’t taxed the same way, but if US partners or investors get jittery over trade tensions, deals could stall.

It’s not all doom, some could pivot to EU markets or lean on local AI like DeepSeek R1 to cut costs—but short-term, it’s a slog. Tariffs jack up expenses, disrupt flows, and threaten market share, especially for device makers over digital players. That’s the raw deal UK HealthTech’s staring down.

Where could UK HeathTech be hit the hardest with US tariffs?

US tariffs in 2025 could hit UK HealthTech across hardware, software, apps, and devices, but the pain won’t land evenly. Let’s break it down, devices and hardware are likely to take the hardest punches, while software and apps might slip through with lighter bruises. Here’s why.

Devices

Think diagnostic tools, wearables, or surgical gear, could get slammed the most. The US tariff announcement from April 2025 tags a 10% baseline on UK exports, and physical goods like these are squarely in the crosshairs. The US is a massive market for UK MedTech; £60.4 billion in goods went there in 2023, with devices a chunky piece. That 10% hike means a £5,000 MRI component jumps to £5,500 for US buyers—hospitals might balk and pivot to US-made or tariff-free options from, say, Japan.

Smaller UK suppliers, without US production to dodge tariffs, could see sales tank. Posts on X flag MedTech execs sweating this already, and the American Hospital Association’s warning of supply cost spikes doesn’t help. Devices are the frontline casualty—high exposure, no easy workaround.

Hardware

The guts of those devices, like semiconductors or imaging tech parts, could hurt bad too, but indirectly. The UK imports a lot of this stuff from China (10-20% tariffs) or Canada (25% if applied). If those costs rise, building a device in the UK gets pricier before it even ships.

Say a UK firm makes a glucose monitor; a tariffed chip from China bumps the cost, then the 10% US export tariff piles on. Double whammy, production and sales both sting. Big players like Smiths Medical might lean on global footprints to offset this, but smaller outfits? They’re stuck. Hardware’s hit is a supply chain gut punch more than a direct tariff slap.

Software

Think AI platforms or TeleHealth systems, should dodge the worst. Tariffs target goods, not digital products. DeepSeek R1-powered platforms, for instance, can beam across borders without a 10% tag. But there’s a catch: if US-UK trade tensions flare (like over the UK’s Digital Services Tax), data flows or partnerships could snag.

The DST rakes in £800 million taxing US tech giants; Trump’s griped about it, and retaliation might chill US investment in UK digital HealthTech. Still, it’s a softer hit—more about market vibes than hard costs. Software’s got room to breathe.

Apps

Patient-facing tools like symptom trackers or therapy bots, sit in a similar boat to software. No direct tariff bite since they’re digital downloads. A UK app like Babylon Health’s old model could keep serving US users tariff-free. But if US hospitals or insurers, key clients face their own tariff-driven budget squeezes, they might cut app integrations to save cash. It’s a ripple, not a direct blow. Apps might even gain if devices falter, cheaper to deploy than hardware. Still, they’re not the main target.

Devices

They’re physical, export-heavy, and lack the tariff immunity of digital stuff. Hardware’s next, via supply chain chaos, but it’s less exposed than finished devices. Software and apps could skate by, maybe even pivot to EU or domestic markets with tools like R1. The NHS might feel it too—pricier devices could strain budgets, but device makers are the ones staring down the barrel. That’s where the tariff hammer drops heaviest.

Nelson Advisors > HealthTech M&A

We work with our clients to assess whether they should 'Build, Buy, Partner or Sell' in order to maximise shareholder value and investment returns. Email lloyd@nelsonadvisors.co.uk

Nelson Advisors regularly publish Healthcare Technology thought leadership articles covering market insights, trends, analysis & predictions @ https://www.healthcare.digital