By SARAH VARNEY, March 31, 2017
TIJUANA, Mexico — The North American Free Trade Agreement has transformed this sprawling border town from gritty party spot to something entirely different: a world capital of medical devices.
Trucks choke boulevards lined with factories, many bearing the names of American-run companies: Medtronic, Hill-Rom, DJO Global and Greatbatch Medical. Inside, Mexican workers churn out millions of medical devices each day, from intravenous bags to artificial respirators, for the global market. 
Nearly everyone in America who has a pacemaker — in fact, people all over the world — walks around with parts from here.
When President Trump threatens to redo trade deals and slap steep taxes on imports in an effort to add more manufacturing jobs, he focuses largely on car companies and air-conditioner makers. But the medical devices business makes a particularly revelatory case study of the difficulties of untangling global trade.
America imports about 30 percent of its medical devices and supplies. The trouble is, these jobs are among the most difficult to relocate to the United States. To ensure the safety of products that often end up inside the human body, medical devices are strictly regulated and require lengthy approvals from the Food and Drug Administration and other inspectors.
If the companies do keep major operations outside the country, new taxes on imports would most likely increase the cost of their products — a change that could jolt not only the devices industry in coming years, but also health care nationwide.
Here in Tijuana the factories are bound to stay put for years, at least. During that time, health executives say, a border tax could fracture the industry’s sophisticated global supply chain and force American hospitals to pay more for vital necessities — or worse.
“The real danger is the supplies won’t be available at all,” said Dr. John Jay Shannon, chief executive of the Cook County Health and Hospitals System in Chicago.
American hospitals rely on heaps of bandages and surgical gloves from China, suturing needles and artificial joints from Ireland, and defibrillators and catheters from Mexico. In all, the annual imports of medical devices more than tripled from 2001 to 2016, when it reached $43.9 billion, according to BMI Research, a unit of the Fitch Group.
Mexico is the leading supplier, ahead of Ireland, Germany and China. And few places illustrate this changing landscape, or help explain the complexity of the industry, as well as Tijuana, 20 miles south of San Diego.
The city houses the highest concentration of Mexico’s medical device firms, 70 percent of which are American-owned, according to the local development group. Companies including Medtronic, CareFusion, DJO Global and Hill-Rom-Welch Allyn — some that have their headquarters just up the road in San Diego — have invested heavily in Tijuana, constructing long, low-slung factories tucked into the hilly terrain. Giant banners hanging from manufacturing plants plead for workers to join them.