Among medtech leaders, a central debate has taken hold: How long the industry can sustain a supply chain architecture built far from the patients and providers who rely on its products.

For years, offshore manufacturing, particularly in China, offered clear advantages in cost, scale, and supply base maturity. But that assumption is being strained. The U.S. government’s recently initiated Section 232 investigation into imports of PPE, medical consumables, and medical devices has heightened the possibility of new tariffs on a wide range of healthcare products. Costa Rica, which now earns more than 40% of its export revenue from medical devices, has warned that added tariffs would raise U.S. healthcare costs and weaken critical supply lines.

The timing adds pressure. Healthcare leaders are still contending with lessons from COVID-19, when shutdowns in Chinese factories contributed to shortages of PPE, contrast media, and other essential supplies. An AAMC (Association of American Medical Colleges) analysis this year concluded that many vulnerabilities identified during the pandemic remain unresolved, and the introduction of broad tariffs could magnify those weak points rather than shore them up.

Taken together, tariffs, geopolitics, and persistent logistics shocks are pushing medtech manufacturers to rethink where and how they build. Nearshoring has moved from conference-panel talking point to board-level strategy. What’s emerging now is a broader shift toward regional, digitally connected manufacturing networks built for long-term resilience.

Why Nearshoring Is Suddenly Urgent in Medtech

Tariffs as a Structural Planning Variable

Tariffs used to be background noise in supply chain strategy; today they are a headline risk. In 2025, Johnson & Johnson projected roughly $400 million in tariff-related costs, driven largely by levies on Chinese imports that hit its medtech division.

Broader policy shifts are amplifying those pressures. KPMG’s latest tariff outlook highlights life sciences as one of the sectors most actively exploring Mexico, India, and Costa Rica as alternative bases for APIs and medical devices, both to reduce exposure to China and to hedge against future tariff rounds.

For medtech OEMs, that means tariffs can no longer be treated as a temporary surcharge. They are now a core constraint in long-range network design, on par with labor and logistics.

A Healthcare System Wary of Shortages

Tariffs land on top of unresolved supply chain fragility. The AAMC notes that healthcare organizations still face periodic shortages of key medical products and, in response to economic and policy shocks, many have formed crisis teams specifically to manage tariff and supply risk.

Hospitals and IDNs are asking hard questions about where devices are made, how diversified the supply is, and how quickly manufacturers can recover from regional disruptions. Supply chain stability is directly tied to the stability of patient care. Decisions about where a device is produced have immediate consequences for hospitals and the people they serve.

Geopolitics and National Industrial Policy

Governments, meanwhile, are signaling a stronger desire to see critical products made domestically or in politically aligned “friendshore” locations. Costa Rica’s pushback on potential U.S. device tariffs is telling; it has become a key partner in U.S. healthcare.

The result is a powerful and constant push and pull. Risk and uncertainty push OEMs away from single-region dependence, and policy, incentives, and customer expectations pull them toward more regionalized networks.

Where Nearshoring Is Happening

Mexico: The Nearshore Workhorse

For North American medtech companies, Mexico is the most visible nearshoring destination. Over the last decade, it has evolved from a low-cost assembly base to a diversified manufacturing hub across electronics, automotive, and increasingly healthcare. A 2024 BCG assessment notes that Mexico has overtaken China as the biggest U.S. trade partner, powered by exports of manufactured goods and a surge of new factory investment.

The medtech layer is now catching up. Market analysis of the Mexican medtech sector points to strong nearshoring of device manufacturing, with multiple companies investing in new capacity to serve the U.S. market on shorter lead times. Contract manufacturers are highlighting fully integrated capabilities that allow OEMs to regionalize not just assembly, but critical finishing steps as well.

Costa Rica: Specialized Medtech Cluster

If Mexico is the dependable general practitioner of nearshoring, Costa Rica is fast becoming the specialist surgeon. Medical devices are now Costa Rica’s number one export, and it ranks among the world’s top medtech exporters relative to its size. It’s seen an 18% average annual growth in medtech exports since 2017, and is now the second-largest medical device exporter in Latin America and the fifth-largest supplier to the United States.

Analyses have called Costa Rica one of the biggest beneficiaries of medtech nearshoring, attracting higher-value activities like precision machining, catheters, and minimally invasive surgical devices. The U.S. International Trade Commission notes that Costa Rica’s medical-device output has steadily shifted from primarily disposables toward surgical instruments, therapeutic devices, and other higher-technology equipment.

What’s taking shape is a global model in which Asia remains a core manufacturing base, paired with new regional facilities that provide geographic diversity and faster access to end markets.

What Resilient Nearshore Operations Actually Look Like

You can’t simply pick up a line from Shenzhen and drop it into Guadalajara and call it resilience. Companies making the most meaningful progress are adopting three core operating principles.

1. Networks, not Nodes

McKinsey’s recent work on supply chain resilience shows that companies improving performance are leaning heavily on dual sourcing and regionalization, rather than relying solely on higher inventory buffers.

In medtech, that often translates into a primary manufacturing base in Asia for global volume, a nearshore facility in Mexico or Costa Rica dedicated to North American demand, and redundant tooling and qualified processes so that critical SKUs can be built in at least two locations.

From a systems perspective, that’s a network problem: How to orchestrate demand, capacity, and quality across multiple sites, versus optimizing a single plant.

2. End-to-End Quality and Regulatory Alignment

Nearshore facilities serving the U.S. and EU must meet the same bar as any domestic site: certifications, robust quality management, and additional registrations and compliance where applicable. Ensuring that level of alignment across multiple regions depends on a unified operational framework.

This is where digitally connected manufacturing ecosystems are becoming critical. That structure allows manufacturers to shift production between regions while preserving full traceability and maintaining validated processes, key requirements for regulated devices.

Industry surveys consistently show that OEMs weigh quality and regulatory competence above pure cost when selecting nearshore partners. As companies distribute more production across North America and other allied regions, digitally standardized systems and certified partners are increasingly viewed as essential enablers of flexibility, compliance, and uninterrupted supply.

3. Digital Infrastructure as Connective Tissue

In a distributed manufacturing model, digital tools are central to maintaining resilience. They allow teams to qualify a portfolio of regional suppliers instead of relying on a single factory, pivot rapidly in response to tariffs or other disruptions, and model lead times across multiple routing options, from Asia-only to hybrid domestic/overseas workflows.

This kind of multi-tenant digital ecosystem is what allows companies to treat nearshoring as a dynamic capability, i.e., work that can be shifted between regions, rather than a one-time relocation project.

The Nearshoring Trade-Offs

None of this is frictionless, and it’s important to be candid about the trade-offs.

Cost and Scale

While nearshore locations can reduce logistics costs and tariff exposure, labor and operating costs often exceed those of legacy Asian hubs. Analysis of Mexico’s nearshoring boom, for example, highlights rising wages, worker shortages in border industrial zones, and infrastructure constraints in power and logistics.

Local supplier ecosystems, especially for niche medtech components, may also be thinner. Many nearshore facilities still rely on imported subassemblies or materials, which means some tariff and risk exposure persists.

Talent and Know-How

Nearshore clusters are competing for a limited pool of experienced medtech manufacturing talent: process engineers, quality leaders, regulatory specialists. Costa Rica’s success has been driven in part by long-term public–private investments in workforce development and R&D capabilities; replicating that level of depth in newer hubs will take time.

Transition and Validation Risk

Finally, shifting or duplicating lines for regulated devices is not trivial. Process validation, change control, and regulatory submissions can take years for complex class II and III devices. That’s why many OEMs are adopting a portfolio approach, designing new products for nearshore networks from day one while selectively creating backup capacity for the most critical in-market products.

How Leading Medtech Firms Are Responding

Bain’s analysis of medtech supply chain strategies found that the majority of medtech leaders intend to adjust their sourcing strategies within the next three years, favoring onshore and nearshore capacity over heavy dependence on China.

In practice, I see three common playbooks:

1. Risk-Hedging Dual Networks

Maintain established high-volume lines in Asia. Stand up parallel lines in nearshore hubs for North American demand and as a contingency if tariffs or disruptions escalate.

2. New-Product Nearshore First

Design new device families from day one to be manufactured in nearshore facilities, with an eye on shorter time-to-market and more direct collaboration between engineering teams and factories.

3. Platform-Enabled Flexibility

Use digital manufacturing platforms and contract networks to pilot nearshore production of subassemblies or lower-risk SKUs, building confidence and data before committing to large capital projects.

Across these models, the common thread is optionality. Nearshoring focuses on creating credible alternatives across regions and developing the infrastructure needed to shift work as conditions change.

A Practical Roadmap for Medtech Leaders

For OEMs and scaling medtech startups alike, a resilient nearshore strategy can be built in stages. A pragmatic roadmap might look like this:

1. Segment the Portfolio by Risk and Sensitivity

Identify product families that are both critical to patient care and highly exposed to tariffs, single-sourced components, or long lead times.

2. Map Current Value Chains and Stress-Test Them

Use scenario planning: What happens to margin and availability if tariffs rise another 10–15%, or if a key shipping lane is constrained for six months?

3. Select Strategic Regional Hubs

For North America, that usually means a combination of the U.S., Mexico, and Costa Rica; for Europe, Eastern Europe and North Africa play a similar role.

4. Invest in Digital and Quality Infrastructure First

Before relocating hardware, make sure you have a unified QMS, shared data standards, and the ability to track performance across sites and partners.

5. Start Small, then Scale

Pilot nearshore production for a limited scope (prototypes, low-volume SKUs, packaging, and sterilization, etc.), then expand as quality and economics are proven out.

This approach turns nearshoring from a one-time bet into a continuous capability, something your organization can dial up or down as conditions change.

Nearshoring as a Permanent Feature, not a Temporary Fix

The medtech sector is unlikely to go back to a world where “lowest landed cost” is the sole north star. The experience of pandemic shortages, combined with ongoing tariff and geopolitical uncertainty, has fundamentally reset expectations among regulators, providers, and patients.

Nearshoring is part of that reset, emerging as a pragmatic alternative to both extreme dependence on distant suppliers and unrealistic notions of total self-sufficiency. By distributing production across trusted regions and tying those regions together with digital infrastructure, manufacturers gain the flexibility to maintain continuity, protect innovation cycles, and keep essential products flowing to patients.

The companies that win in this environment will be those that treat nearshoring not as a reactionary move, but as a strategic redesign of their operating model: balancing cost, resilience, and speed, and keeping the patient at the center of every sourcing decision.

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Dave Evans is the CEO and co-founder of Fictiv, a global supply chain and manufacturing company for custom mechanical products. He is a regular contributor for Fast Company and Forbes, has been featured on NBC News, Nasdaq, TechCrunch, and Discovery, and was named to Forbes 30 Under 30 list. Evans was the first hire at Ford’s Silicon Valley Innovation Lab and graduated from Stanford University with a B.S. in Mechanical Engineering. He is a hands-on dad of two, husband, builder, and creator.