New tariff policy is here, and DME providers are once again stuck between rising costs and unclear timelines.
Current as of May 12, 2025, the U.S. has a 10% tariff across the board on many categories of imported goods, with hikes affecting Chinese-made medical equipment and components.
That includes a 30% tariff on a wide range of products from China, plus a 125% tariff that is currently suspended for 90 days.
If you’re sourcing products overseas, especially from China, these moves matter. They impact your margins, inventory strategies, and cash flow planning. More importantly, tariff uncertainty creates real operational risk, especially for providers already navigating tight reimbursement and rising labor costs.
On May 6, 2025, Philips, key supplier to DMEs, lowered its profit forecast, citing a €250–300 million ($283–$340 million) tariff impact despite mitigation efforts.
As a major respiratory equipment supplier, this could affect DME providers. CEO Roy Jakobs pointed to pricing changes and supply chain shifts as key responses.
These are moves likely to influence product costs and availability in the months ahead.
What China Tariffs Mean for DMEs in 2025
- Higher Costs on Core Products
CPAP supplies, mobility equipment, wound care items, and respiratory accessories are all in the mix. If they’re sourced from Chinese manufacturers or include Chinese components, costs are going up.
- Budgeting Just Got Harder
With the 125% tariff paused but not ruled out, it’s very difficult to plan long-term. You may price for a 30% increase, only to be hit with a quadruple hike three months from now.
That level of volatility can’t be easily absorbed by DME providers already operating on slim margins.
- Inventory Strategy Is Now a Risk Management Play
Stockpiling may protect you from short-term price jumps, but it ties up capital and warehouse space. On the other hand, just-in-time ordering leaves you exposed to sudden tariff enforcement or supply chain delays.
The Real Issue: Reimbursement Isn’t Moving
Tariffs don’t affect what Medicare or private payers will reimburse. That’s the core problem.
Even if your costs go up 30%, your revenue per claim stays the same. That creates an unsustainable squeeze, especially for providers already locked into fee schedules that haven’t been adjusted in years.
Without policy changes or exemptions, providers are left footing the bill.
The 90-Day Suspension: What It Does (and Doesn’t) Mean
The suspended 125% tariff gives the industry a temporary window, but it doesn’t solve the underlying problem.
In fact, it adds a new one: uncertainty.
How do you set pricing, negotiate supplier terms, or plan growth when your costs could double in 90 days? For smaller DME businesses without pricing power or direct manufacturer relationships, the risk is even greater.
What DME Providers Can Do Now
- Review sourcing immediately. Talk to your vendors. Find out where your key SKUs originate and what percentage of your costs are exposed to tariffs.
- Watch inventory cycles. Avoid panic stockpiling, but don’t be caught flat-footed if the 125% tariff kicks in.
- Document cost impacts. The more concrete data the industry can gather, the stronger the advocacy case for exemptions or policy relief.
- Consider automation. While automation doesn’t eliminate material costs, it can offset some of the financial pressure by improving efficiency and reducing overhead.
Bottom Line
DME providers are caught in a supply chain crossfire, and the latest round of tariffs only adds to the pressure. With 30% tariffs now in effect on Chinese goods and a potential 125% hike looming, providers are forced to navigate rising costs with fixed reimbursement.
The next 90 days are critical.
Whether or not the 125% rate goes into effect, the message is clear: uncertainty is the new constant, and operational resilience will matter more than ever.
