Beyond The Border: What’s Happening in FDA & Customs

Impact of New Tariffs on FDA and USDA-Regulated Goods

There have been significant developments regarding tariffs, particularly those affecting FDA and USDA-regulated goods. While Mexico and Canada successfully negotiated to avoid new tariffs, China remains a major focus of trade policies.

China exports a wide range of FDA-regulated products to the U.S., including seafood, pharmaceuticals, and medical devices. During the COVID-19 pandemic, concerns arose about the reliance on Chinese manufacturing for personal protective equipment (PPE). The Trump administration recently implemented a 10% tariff on all goods imported from China, adding a duty cost that importers must absorb.

Unlike seasonal imports from Mexico and Canada, China’s exports to the U.S. are steady, meaning the 10% tariff will significantly impact pricing. This cost will be shared among importers, manufacturers, and ultimately consumers.

Pharmaceutical Industry and Tariffs

Approximately 80% of pharmaceuticals consumed in the U.S. are imported. These imports include both finished drugs and active pharmaceutical ingredients (APIs) used in drug production. China plays a crucial role in pharmaceutical manufacturing, supplying raw ingredients and finished products.

Efforts to move pharmaceutical production to the U.S. are challenging due to FDA requirements. The FDA must inspect facilities manufacturing APIs and finished drugs, which is a time-consuming process. This means that shifting production away from China will take years. Consequently, the 10% tariff—and potential future increases—will likely drive up costs for pharmaceutical supply chains and consumers.

Medical Devices and Seafood Industry Concerns

Medical devices face similar challenges, albeit to a lesser degree. The FDA inspects foreign medical device manufacturers, but not as extensively as pharmaceutical facilities. However, China remains a major supplier of medical devices to the U.S.

Seafood is another industry heavily affected by tariffs. The U.S. imports a significant amount of seafood, much of which is processed in China before being re-exported. Some seafood items were already subject to earlier 25% tariffs, and with the new 10% tariff, certain products now face a 35% total duty. These tariff increases will influence market prices, especially for processed seafood such as breaded shrimp.

Future of China Tariffs

Recent developments suggest tariffs on Chinese goods may continue to rise. On February 18, 2025, the Trump administration proposed increasing tariffs on pharmaceuticals to 25%, which would raise total tariffs on some products to 35%. If implemented, this would further increase costs, impacting consumers and businesses alike.

Changes at the FDA and Department of Health and Human Services

There have been significant changes at the Department of Health and Human Services (HHS), with Robert F. Kennedy Jr. now serving as Secretary. His appointment led to numerous firings, primarily of probationary employees who had been with the government for less than a year. While this approach simplifies workforce reductions, it can result in the loss of key personnel.

The FDA has experienced staff reductions in critical areas such as medical device review, artificial intelligence applications in healthcare, and food additive regulation. Jim Jones, a senior official in the Human Foods Program, resigned, citing an inability to protect public health due to staffing cuts.

Impact of Layoffs on FDA Operations

Most FDA field operations, including inspectors and compliance officers, remain unaffected. However, headquarters have seen significant losses, particularly among probationary employees and senior policy advisors. This could impact the agency’s ability to review medical devices, pharmaceuticals, and food safety regulations efficiently.

Pharmaceutical and medical device approvals may not be as heavily affected since these programs are funded by user fees rather than taxpayer dollars. However, the loss of experts in AI and food safety could slow regulatory processes and innovation.

Conclusion

The coming months will be critical in determining the full impact of tariffs and FDA workforce changes. Higher costs for imports, particularly pharmaceuticals and seafood, could affect both businesses and consumers. Meanwhile, regulatory shifts within the FDA could lead to delays in product approvals and policy changes.

If you’re facing challenges with importing FDA-regulated products, we’re here to help you navigate the process smoothly. Let us be your guide through the complexities of trade tariffs, FDA compliance, and border issues. Visit us at FDAImports or contact us directly at contact@fdaimports.com for assistance.