Chair File: Leadership Dialogue — Tariffs and Health Care with Brian Pomper and Akin Demehin

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Tom Haederle
Welcome to Advancing Health. Most experts agree that less reliance on foreign made medical and pharmaceutical products would be a good thing for U.S. health care. But experts also agree it's going to take some time to increase control over our supply chain. In today's podcast hosted by Tina Freese Decker, president and CEO of Corewell Health and the 2025 Board Chair of the American Hospital Association, we hear from two experts about the potential impact of the Trump administration's trade tariffs on our supply chain and what they could mean for patients and providers.

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Tom Haederle
This podcast was recorded on May 15th.

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Tina Freese Decker
Hello, and thank you so much for joining us today. I'm Tina Freese Decker, president and CEO of Corewell Health and board chair for the American Hospital Association. This month, we are diving into a topic that is top of mind for all of our leaders, not just in health care. It's tariffs. As our nation watches the changing tariff policy play out for those in the hospital field, there are serious considerations as it relates to our supply chain.

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Tina Freese Decker
Every day at Corewell Health and I'm sure at every hospital health system across our country, we use a wide array of products, devices and pharmaceuticals to deliver safe and effective care to our communities. The lives of the people we serve often depend on these items being readily available, making a robust health care supply chain critical. While the field shares the administration's long term goal of strengthening the domestic supply chain for essential medical and pharmaceutical products,

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Tina Freese Decker
we know that achieving this goal will require significant time. In the short term, there is concern that tariffs could inadvertently disrupt that availability of these essential care delivery products, increase the complexity of delivering patient care, and significantly raise hospital costs. So today, I'm joined by two guests who will help us better understand the current environment as it relates to tariffs and the potential implications to health care supply chain.

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Tina Freese Decker
Brian Pomper is a partner at Akin Gump Strauss Hauer and Feld, a D.C. based law firm, and he specializes in international trade policy. Welcome, Brian.

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Brian Pomper, JD
Thanks for having me.

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Tina Freese Decker
Before joining Akin Gump, Brian formerly served as the chief international trade counsel to the Senate Finance Committee, where he advised of all aspects of the committee's international trade and economic agenda. So we'll get into some of your expertise today. And we are also joined by Akin Demehin. Welcome, Akin.

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Akin Demehin
Thank you Tina.

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Tina Freese Decker
Akin is AHA's vice president for quality and safety policy. He leads public policy analysis, development and advocacy efforts related to quality, patient safety and workforce on behalf of the American Hospital Association. He also leads a regulatory policy development efforts related to the health care workforce. So thank you so much for joining us today. There's so many ups and downs, so many negotiations about what's happening with tariffs.

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Tina Freese Decker
So Brian, I'm going to start with you. Can you tell us where we are today about what's happening for tariffs.

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Brian Pomper, JD
Sure thing. Well there's a couple different avenues that the administration has taken on its trade and tariff plan, I'd say. The first I'd just talk about the giant reciprocal tariff regime that the president announced on Liberation Day, as he calls it, on April 2nd. On April 2nd, he announced that he would be imposing 10% tariffs on every country in the world and higher tariffs on 57 of those countries on April 9th.

00:03:29:23 - 00:03:53:27
Brian Pomper, JD
And so the 10% tariffs went into effect April 5th and then April 9th - for about a few hours - you had much higher tariffs on those 57 countries. The bond market and the stock market reacted quite negatively at the time. And so he decided he would pause those higher tariffs on the 57 countries for 90 days to allow for negotiations.

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Brian Pomper, JD
He said at the time it was because the bond market had gotten, in his words, yippy. So they were watching what was happening in the broader market. Concerned about where the market was trending, decided to pause this enterprise to allow for these kind of bilateral negotiations over the course of 90 days. And so that's where we are now. Where there are, really, one hears 18 to 20 countries that are in active negotiations with the administration.

00:04:18:21 - 00:04:38:22
Brian Pomper, JD
There are many more that have proposed some degree of, measures they could take for their own economy. So there are really are dozens of countries that are engaged in negotiations with the United States during this 90 day period. There's been one announced agreement with the United Kingdom that was late last week or earlier this week.

00:04:38:24 - 00:04:58:07
Brian Pomper, JD
I would just note that that agreement with the U.K., it's much less of an operational agreement and much more really of a kind of a scoping exercise in agreement to agree sometime in the future on certain matters. And so it's really just a little bit of an appetizer for what maybe these agreements might look like in the future.

00:04:58:07 - 00:05:22:03
Brian Pomper, JD
And the hard part in even negotiating with the U.K. has yet to be done. There's a rumor that there's another agreement that should be announced here fairly soon, but I expect there will be a whole series of these kinds of announcements over the course of the next 90 days, until July 9th. I wouldn't expect the very high reciprocal tariffs on those 57 countries to snap back immediately into place on July 9th.

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Brian Pomper, JD
My expectation is that countries that are able to negotiate, as the U.K. did, will end up with a 10% tariff. They won't get their higher tariff. But even for those countries that have expressed a willingness to negotiate with the United States, I don't think that the higher tariffs will go into place. I think the president will extend the pause there.

00:05:39:08 - 00:06:05:14
Brian Pomper, JD
So that's reciprocal tariffs. And then there are section 232 investigations. This is a mechanism whereby the president can ask the Department of Commerce to do an investigation into the national security impact of certain imports. And there has been, a variety of investigations that this president has, has undertaken and actually imposed tariffs on steel and aluminum and autos. All those tariffs are in place under the section 232 authority.

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Brian Pomper, JD
But there's also investigations into pharmaceuticals, into semiconductors, trucks, timber, lumber, copper, aerospace, potentially more coming down the pike. And so we're expecting those investigations to be announced here in the coming months. But we don't know exactly where the president will land yet. The premise of those investigations is supposed to be the national security impacts of those imports.

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Brian Pomper, JD
But really, the president seems to be using them as a cudgel to try to force companies to restore their manufacturing from overseas to the United States by tariffing the imports. He seems to like a tariff of 25%. That's the tariff that applies on steel, aluminum and autos. I think that's where we see him landing on some of these others.

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Brian Pomper, JD
And unlike the reciprocal tariffs where there's a lot of negotiation that's ongoing, the section 232 tariffs feel a lot stickier. They'll be a lot harder to get out from underneath them. And then of course there are the China tariffs. When the president announced the 34% reciprocal tariff for China. China retaliated and we ended up in a tit for tat retaliation that ended up really with, 145% base tariff on imports into the United States from China and 125% tariff from US exports to China.

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Brian Pomper, JD
That really was like an economic blockade. And both economies really needed to lower those and in fact, they did agree. The United States and China agreed to lower those tariffs. And so now the tariffs on products coming into China, the base tariff is 30% plus whatever additional tariffs might apply. And from the US side into China, it's 10%.

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Tina Freese Decker
I was just recently reading a book, history book and talked about tariffs. So can you share how tariffs have been handled differently compared in the past, how they are different today than they were used in past administrations or past years and strategies?

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Brian Pomper, JD
Yeah. Thank you. I love this question. Allows me to bring out my inner professor. So I would say for the first 150 years of American history, there was no topic that was more often and more frequently debated in Congress than what should be the level of the tariff. You had the incipient industrial industries in the North that wanted higher tariffs to protect their growing power up there.

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Brian Pomper, JD
And then you had growers in the South who wanted open export markets, and so they wanted low tariffs so that other countries don't go there. So there was this just constant negotiation. We ended in 1930 with something called the Smoot-Hawley tariff, which people may remember from their high school history class, as blamed for having deepened the Great Depression, I think widely perceived as a negative economic outcome.

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Brian Pomper, JD
And since 1930, what the Congress has really done is to delegate to the president quite a bit of authority over trade policy. This is why we have things like the section 232 investigation, where Congress has understood that well, you know, maybe it's not the best use of congressional time to negotiate on what the tariff on salmon imports should be.

00:09:10:13 - 00:09:33:18
Brian Pomper, JD
You know, we're going to let the president kind of deal with that stuff. So we have for the last almost 100 years, had this kind of joint authority between Congress and the president where they would share this, this sort of responsibility. And I think there are those who will argue that that President Trump is using this authority in ways that hadn't been contemplated.

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Brian Pomper, JD
In particular, I would say, with a line of tariffs that I didn't talk about, which are these tariffs under the International Emergency Economic Powers Act that were imposed on Canada and Mexico, also on China. And actually, I should say IEEPA is the underlying authority the president used for this entire reciprocal tariff regime. It is a very aggressive use of this authority.

00:09:56:20 - 00:10:17:18
Brian Pomper, JD
That that's unusual. The president is much more willing to push legal boundaries, of course, not just in tariffs, but we certainly see it in tariffs here. So much so it is currently being challenged in the courts. And it's really anybody's guess whether the courts are going to decide that he may have exceeded his authority under the IEEPA statute to him to impose these tariffs.

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Tina Freese Decker
And can you explain the IEEPA statute?

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Brian Pomper, JD
Sure. I'm happy to. So IEEPA stands for the International Emergency Economic Powers Act. It was passed in 1977 to allow the president to act quickly in cases of some sort of economic emergency. It's actually the basis for our entire export controls regime. It has never been used before to impose tariffs. President Trump is the first president to use it to impose tariffs.

00:10:43:21 - 00:11:08:13
Brian Pomper, JD
There was a predecessor statute called the Trading With the Enemy Act, that President Nixon used to impose tariffs when we were in the process of going off of the gold standard, because there was a balance of payments crisis at the time. That was challenged in the courts, and the court at the time decided that was okay because the court decided, well, those tariffs that the president imposed were really in response to a true economic crisis.

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Brian Pomper, JD
There wasn't enough gold in Fort Knox to cover the number of dollars that were in circulation at the time. And those tariffs were imposed for a relatively short period. It was only four months. And it wasn't every country and every product. If you fast forward now to the successor statute, the IEEPA statute, which was written largely because the Trading With the Enemy Act...it was an awkward fit for some of these actions that President Nixon took.

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Brian Pomper, JD
Here you now have a president who has used IEEPA to impose tariffs on every country, every product, effectively forever. And so the question that the court in Yoshida, which is the case I'm talking about, the court in Yoshida decided the president in that case was not seeking to usurp the role of Congress, which is clearly given to Congress in the Constitution to control international economic relations, trade with foreign nations.

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Brian Pomper, JD
The president wasn't seeking to stand in the role of Congress in resetting tariffs, because it was only time limited and, you know, limited in coverage. Here it's a much different circumstance where you really do have the entirety of the harmonized tariff code that covers all of our trade with every country being reset through executive order. I do think that there are very strong legal arguments that will be made and are being made in court, literally right now as we speak, that the president exceeded his authority under

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Brian Pomper, JD
IEEPA. So it's not inconceivable in the next few weeks, you could see a court order that would invalidate the president's actions and really get rid of this entire reciprocal tariff regime.

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Tina Freese Decker
Thank you very much. That was an excellent summary, we really appreciate that. I'm going to switch to Akin. Akin, can you share an overview of concerns specific to hospitals as how it relates to the tariffs may impact access to pharmaceuticals, medical supplies, other needed devices, and do you think that there is going to be a concern about exasperate some of the shortages that we have experienced to date?

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Akin Demehin
Absolutely. I think the complexity that Brian was talking about in terms of how these tariffs are being rolled out is really needing the complexity of the health care supply chain. And the concern that we hear from members and that we really put front and center in our own advocacy efforts is what does this mean for the delivery of patient care?

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Akin Demehin
What does it mean for our caregivers in health care facilities? Hospitals and health systems are constantly weaving together both domestic and international sources for their drugs, for their medical devices, and for other critical supplies. And we know that even temporary disruptions to the flows of those goods can have significant impacts to how hospitals deliver care. Great example are cancer drugs. 00:13:54:24 - 00:14:20:02
Akin Demehin
Many of those are manufactured in China or rely on a significant number of key starting materials that are manufactured in China or in other locations across the globe. The disruption from tariffs could potentially lead to disruptions in those carefully planned cancer treatments that really rely on careful scheduling. The same thing is true of things like cardiovascular medicines.

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Akin Demehin
As you raised at the outset, Tina, we certainly support ongoing efforts to onshore production and really strengthen the domestic supply chain. At the same time, even those medical goods and devices that are manufactured here in the U.S. often draw in content from abroad. Great example is an infusion pump, where even those infusion pumps are manufactured here in the US might have parts from 20 or more different countries, ranging from the aluminum that goes into manufacturing the pole to the computer chips to the plastics.

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Akin Demehin
All of that involves a considerable amount of complexity. And switching sourcing and offshoring production really is a long term effort. So we've really tried to elevate those concerns in our work around tariffs.

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Tina Freese Decker
So can you tell us what the American Hospital Association is doing to secure exemptions for medical devices and pharmaceuticals?

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Akin Demehin
Sure. So early in the rollout of the tariffs from the administration - going back to early February - we actually sent a letter to the president outlining our concerns about the potential impacts of tariffs to the delivery of patient care, to our ability to provide things like personal protective equipment to frontline providers. And we've continued to follow that up with ongoing proactive dialogue with the administration to really focus on advocating for exemptions for pharmaceutical products and for medical devices.

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Akin Demehin
Bryan talked about the section 232 investigations. The administration has one ongoing for pharmaceutical products, and had an opportunity for the field to share feedback. And we share our concerns with the administration and continue to ask for exemptions. The other thing that we are trying to do is to really provide the hospital and health system perspective to policymakers, to the media, to the administration.

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Akin Demehin
We're in a bit of a unique position versus other kinds of fields where we are large consumers of the goods within the supply chain. Our ability to stockpile any of these supplies is often constrained by just the sheer availability of the supplies. The shelf life for things like pharmaceuticals is finite, so it's not necessarily something that you can just have hanging out on a shelf.

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Akin Demehin
There's space that you have to have in order to warehouse some of these materials. And the way that hospitals and health systems are reimbursed means that it's really our members that bear the costs of tariffs. Because our rates are set by government and by contracts in the private sector, the potential cost impacts of tariffs are ones that we really feel quite directly for our members.

00:17:20:14 - 00:17:33:17
Tina Freese Decker
Akin, you answered all of my questions coming through there. That was fantastic, because those are all of the concerns that we have as members and what's going on. Brian, do you think that exemptions are likely knowing this administration?

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Brian Pomper, JD
An excellent question I get from many, many clients. And I would go back to what I mentioned earlier. My expectation is that the American economy is going to struggle a bit under the weight of all of the tariffs that the president has imposed in all these ways. And there are more tariffs coming under these section 232 investigations that are currently ongoing.

00:17:54:20 - 00:18:27:09
Brian Pomper, JD
I think that many in Congress, especially on the Republican side, have expressed privately but not publicly concern about the president's strategy with respect to tariffs and how it might impact their constituents. But I think over time, the political and economic pressure is going to force some kind of adjustment in the administration. And I think the most logical pressure valve to be released for the administration is for them to reimpose some type of exclusion process, as we did have in the first administration.

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Brian Pomper, JD
So if I'm a betting person, yes, I think we will have some kind of exclusion process.

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Tina Freese Decker
We'll come back to see if you're right. And so to close out our conversation today, this has been really helpful, a great history lesson and understanding of what's going on. Brian and Akin, can you share with us what your advice would be for our members? What should we be thinking about doing, planning for, as we think about these tariffs and the impact that they have?

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Brian Pomper, JD
Yeah, I always tell clients if something is important to you, important to your bottom line, you need to be vocal about it, and you need to be telling people how these measures are going to impact you. It's hard to argue with the goal, or at least one of the goals the president has of increasing manufacturing employment in the United States.

00:19:13:08 - 00:19:34:21
Brian Pomper, JD
Who doesn't want that? I think where there's debate is how best to achieve that. But I do think it's important for organizations like AHA to go talk to your members, talk to the people who focus on the policy issues, the policy areas that you deal with. Let them know how these tariffs are going to impact you, and ask them to weigh in on your behalf.

00:19:34:21 - 00:19:46:01
Brian Pomper, JD
And just make sure that whatever the administration does, they try to maximize benefit while minimizing harm. So I would just say where there's an opportunity to engage, I encourage the AHA to do so.

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Tina Freese Decker
Maximize benefit and minimize harm. Great statement. Akin?

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Akin Demehin
You know, Brian's counsel here is extremely wise. I'll just build on it in a couple of ways. One of the things that I know hospitals and health systems are so good at doing is bridging that gap between data and story. And often it is those stories of what's happening on the ground, how the steps that you go through to access supplies to deliver care, how those are affected, and playing that out for what it means for patients.

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Akin Demehin
Those are the kinds of stories that I know policymakers respond to. It really makes the issue even more real for them. And as Brian alluded to, raising some of those concerns with policymakers and certainly reaching out to us here at AHA, we can always be strong advocates on your behalf when we have intel and stories, and other information from all of you to help make the case as best we can.

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Akin Demehin
So we want to stay connected as we possibly can with all of you going forward so that we can push for those exemptions for pharmaceuticals and medical devices.

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Tina Freese Decker
That's wonderful. And your example about the cancer drugs or the smart pump or MRI and how all of those pieces come together is one of those stories that we can talk about and how it impacts us. So Brian and Akin, thank you so much for your time today and sharing in your expertise. I know this is an evolving issue and the AHA will continue to monitor closely and advocate on behalf of our field.

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Tina Freese Decker
And thank you to everyone tuning in today. We'll be back next month for another Leadership Dialogue conversation.

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Tom Haederle
Thanks for listening to Advancing Health. Please subscribe and rate us five stars on Apple Podcasts, Spotify, or wherever you get your podcasts.