Navigating the Challenges of International Trade Under Trump 2.0
By Guillaume Corpart
Whether it’s due to transportation, logistics, government regulations or other issues, international trade always poses unique challenges, particularly when it comes to medical equipment. With U.S. President Trump wielding the tariff cudgel on many international trading partners, that atmosphere has become even more unpredictable.
The tariffs have far-reaching impacts, including a 10% baseline tariff on goods sent to the U.S. from most countries, but Mexico was hit even harder with a 25% tax on imports. Other countries and regions, ranging from the European Union to Guyana may also face a higher tariff rate in the near future. Some countries have imposed reciprocal tariffs on U.S. exports into their countries, which will complicate the international landscape for medical equipment and devices that are largely imported into Latin America.
Staying Strong in Latin America
What can international healthcare, medical device and equipment companies do in the face of this uncertain trade climate? Fortunately, there are a few key tenets companies can focus on to maintain trading advantages and stay ahead of the shifting landscape. Here are some of the top strategies for maintaining good trading relations within Latin America, even in an increasingly complex trade environment.
Strategy #1: Look for Opportunities Locally
If your business is already heavily invested in Latin America, one of the best ways to avoid the challenges of shipping, logistics and retaliatory tariffs is to keep as much business as possible within the region. If your firm already does heavy business in an area, perhaps you have an opportunity to do more, including storage, distribution and manufacturing.
“Global supply chains are always under pressure, and the recent news regarding tariffs in the United States has only complicated issues,” says Marc Duocastella, General Manager of Philips Mexico. “Phillips handles these challenges by diversifying our manufacturing with factories all over the world. If one site has an issue, we have other alternatives.”
Sergio Arturo Dominguez Miranda, Head of Cardiovascular Care & Interventional Radiology, Latin America, for Siemens Healthineers, agrees that focusing on manufacturing close to the source is key to solving supply chain challenges, and there is plenty of opportunity for this manufacturing within Latin America. “There is definitely an opportunity to increase manufacturing here,” he says. “We have sites in Costa Rica, Brazil, Mexico and other locales around the region, but it’s continuing to grow.”
Even if local manufacturing isn’t an option for your company, it’s worth pursuing other strategic partnerships or initiatives with local businesses. Good relationships with local partners can provide your business with advantages over competitors even in the face of economic challenges. Being heavily invested in different regions also offers advantages beyond logistics, including enhancing the resiliency of your business overall. Being geographically diversified can serve to protect your business from unexpected economic factors in specific regions.
Strategy #2: Optimize Your Operations
Nobody likes to talk about belt-tightening, but it’s the reality in many situations. With innovative thinking, companies can uncover ways to continue doing strong business with limited impact on product price or workforce.
Steven Bipes, Vice President of Global Strategy and Analysis for the Advanced Medical Technology Association (AdvaMed), says that dealing with regulatory delays and navigating the approval process in different Latin American countries can end up costing companies more money than tariffs. “We estimate the total financial burden of unnecessary regulations at about $50 billion annually across Latin America,” he says. By working closely with government regulators and ensuring there is a smooth path toward entry and adoption in the region, you can enhance efficiency and save your company millions, he says.
Another way that companies can optimize and make their operations more efficient is by taking a closer look at their supply chain. Whether it’s trade routes, inefficient shipping practices or other wasted costs, there are often ways to tighten up without downsizing. For example, you might find a more efficient route or method for shipping needed supplies and equipment. In some cases, you can bundle or consolidate materials to save costs. Packaging can also be a major cost factor that’s worth a closer look. It’s not uncommon for inefficiencies to creep into the supply chain over time, so all these items are worthy of review.
Making use of GHI’s detailed regional databases of hospitals and medical centers, such as HospiScope, PriceScope, SurgiScope and more, also can help refine your business strategy and tailor your offerings to what hospitals and medical centers truly need. This can minimize wasted efforts and maximize the volume of outreach that leads to actual sales.
Part of that strategy in Latin America is understanding the distinction between the public and private markets and tailoring your offerings accordingly based on who you’re providing equipment to. “If you talk to private hospitals, they may want AI, robotics and the latest equipment. Other hospitals have very basic needs,” says Hector Orellana, Vice President of North Latin America for Medtronic. “You need to understand both sides to navigate the differences and approach them with the right services. We must be adaptable to help all patients as effectively as possible.”
Strategy #3: Explore Disruptive Strategies
In an ever-changing and hostile trade landscape, you can’t pursue business as usual and expect it to keep working. Atypical and even disruptive thinking is the key to turning a sales plateau or downswing into a trade advantage in a challenging market.
Take the growing volume of Asian (and specifically Chinese) medical supply and equipment manufacturers as an example. Many companies are finding it challenging to compete on price in what seems to be a “race to the bottom.” The disruptive thinking here is the opposite approach: Make your higher quality (and prices) work to your advantage by promoting trust and positioning your business as a strategic ally to your clients, thus making your equipment more desirable than less expensive competitors. Factors such as safety, durability and reliability are at the center of decision-making.
You can go even further by reinforcing your portfolio with product training, product support and medical certifications. If your clients know they can trust your business not only for its high-quality products but can also rely on you for everything they will need to use those products successfully, then you’re on your way to earning a client for life, even if it costs a little bit more.
Another disruptive strategy that has yielded success specifically in Latin America is an adaptive approach to public vs. private hospitals. You may sell devices and equipment with all the latest bells and whistles, and there may be a small volume of private hospitals and centers throughout the region that are interested in paying a premium for the latest and greatest.
However, many hospitals and medical centers across Latin America may be more focused on increasing access than on delivering the latest technology – thus looking for savings along the way. They still want good, reliable equipment, but something a little less cutting edge, but just as reliable at a lower cost will suit their needs just fine. By employing an adaptive strategy that caters to both markets, you can increase your sales across the region without sacrificing innovation.
Next Steps
Contact GHI to learn more about international sales trends and their potential impact on the healthcare industry in Latin America. Our team of researchers can provide the analysis you need to gain valuable insights to support strategic decision-making in your industry.
