A long and ominous shadow has been cast over Europe’s medical device industry by the US government’s decision to launch a “Section 232” investigation into the sector. This move, widely seen as a precursor to tariffs, has sent a shiver of anxiety through a host of companies that produce everything from pacemakers and prosthetics to X-ray machines.
A Section 232 investigation is a particularly potent threat because it operates under the powerful and often difficult-to-challenge justification of “national security.” This was the same mechanism used to impose tariffs on steel and aluminum, and its application to medical devices suggests the administration is willing to define “national security” in very broad terms.
The European Union is a global powerhouse in the medical technology field, and its exports to the US are substantial. The investigation therefore puts a huge volume of trade at risk. For European economic planners, this opens up a new and unwelcome front in the trade war, just as they are grappling with the threats to the auto and pharmaceutical industries.
The probe also raises serious questions about the durability of the EU’s existing 15% tariff agreement with the US. While that deal was intended to be an “insurance policy,” the Section 232 process may provide the US with a legal pathway to impose new tariffs that fall outside the scope of that agreement, effectively rendering the insurance policy void in this specific case.
As the investigation proceeds, the shadow of uncertainty will loom large over the medical device sector. Billions of dollars in trade, and the stability of the transatlantic healthcare supply chain, are now in question, all because of a legal process that has become a primary weapon in the US trade arsenal.