Marcel Botha, CEO and founder of 10xbeta, a Medtech Innovation Company and Venture Studio, joined MobiHealthNews To discuss the widespread and unintended consequences of rates imposed by the Trump government to the MedTech chain of the female.
Botha states that these rates will not only influence definitive medical products, but also critical components and subassemblages, which hinders the ability of manufacturers established in the US to work efficiently.
MobiHealthNews: How do you think the rates that President Donald Trump has or will impose can influence the MedTech Supply Chain?
Marcel Botha: We already see a huge impact of the rates. We see a number of different things happening at the same time. It therefore influences components, subassemblages and ultimate meetings to enter the US, not only from China, but also from everywhere.
It is clear that China currently has one of the highest tariff percentages, but we also see many different types of behavior between different geographical geographies that bring the US back to match or impose comparable rates.
When we look at the rates for component and sub-component level, these are not end products; These are products that have usually gone to the US to be part of US end goods of higher value. It therefore influences our ability to produce quite seriously in the country at the moment. Companies that serve worldwide markets that have had a teshed production during the earlier administration to start investing in American production, withdraw that investment, because if their supply chain is not yet 100% established in the US, they will be punished for their limited production efforts to the US So that is precisely the opposite effect of what the expectation of rates was. And we don’t just see it for cheap things; We see it for high -quality pieces of $ 25,000 to $ 40,000 medical equipment.
We also see it affecting the material supply chain and adjacent supply chains for final goods. We see the reverse applying to end goods made here, travel to Europe and other countries – High -quality medical equipment that has added rates.
The American health care system is based on reimbursements such as the threshold for: “Is this a viable medical device or medical product or medically consusable, or not?” And the rates disrupt those economic models from yesterday that are no longer compatible with a profitable outcome. So, whether those therapies, those diagnostic instruments and those consumables will have to negotiate new higher rates for Medicare and Medicaid, which will not happen in time or will happen unlikely if different departments in the US government look at efficiency and, you know, the economic impact of these choices,/or they are not available.
We have seen that many end products do not reach the country, or subasemblies do not enter the country because people play a waiting game. So, what I call a siloing of all or part of products, so the system is detained in the dark. It is like a traditional clock that has just stopped working.
MHN: At the beginning of this year, President Trump and his partners project Stargate announced, where these large data centers are being built to accommodate AI. How will the rates influence the supply chain that ultimately allow these data centers to be constructed?
Botha: I think rates in the following ways influence Stargate and all other adjacent technical companies: it will affect assemblies and subasemblies at component level.
If you buy Nvidia or TSM [Taiwan Semiconductor Manufacturing Company Limited] Whether other suppliers worldwide, and they do not have onshore production to get mutual credits or forgiveness, you will see an increase in infrastructure costs. You will see an increase in electrical costs.
I mean, Enron, who was the Bad Boys 25 years ago, modulated artificial shortages in the offer or the network of California by closing electricity stations to artificially push the prize and then to fail well, and that is where most of those people went to prison. But you will see that it just happens automatically, such as a constant pressure on electric prices in markets where that price has not been set.
So I think that dynamic prices for electricity will be seriously influenced by the demand for AI data centers, which in turn looks back at alternative solar sources of energy production: solar energy, merger, clean energy, wind and water. All these have supply chains that, at component level, device level or product level, are influenced worldwide by the rates.
So all that kind of things, no matter how clean, becomes more expensive, cost -resistant. So they fight each other. The whole idea of global trade falls apart when the flow of goods is disturbed and we see exactly what happened during Covid. Now it is just made by man.
MHN: What can MedTech companies do to provide rates and the supply chain have not influenced that much?
Botha: Well, there are a few strategies. One is in stock. It still requires that you pay priceless amounts for importing products. Another looks at tariff breaks or rate for reciprocity to see if there are loans that can be negotiated with import/export exchanges.
I have seen this happen in other countries with luxury cars, such as BMW, made in Germany, for example, are not as heavily loaded as they are imported into a country like South Africa because they also have factories that produce the BMW 3 series and 4-series in the country. So a certain charge has been established in the interior, goodwill and credit with rates at the luxury import. So, that kind, let’s call it rates, I am sure we’ll see what happens.
State states in stock; We saw this specifically during the pandemic. We need Sensor X or device Y, where we climb and touch our local supply chains and local markets to buy surplus components from the local market. The risk there, again, is if you, especially with MedTech, if you have a high -quality resistance, transistor or sensor component, you must pay attention to what you buy from a third -party site and not the original production source is in fact a legitimate product and not counterfeit.
There is a major problem with counterfeit components worldwide, and this tension that we see as a result of rates can cause a stock in alternative sources that can be influenced by the quality chain of detention and quality control and potential conflict of goods that have a direct influence on power -reducing patient safety.
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