Tariff Concerns Dominate Medtech Earnings Season Outlook

As the first-quarter earnings season approaches, the medical technology industry braces for the potential impact of President Donald Trump's evolving tariff policies. Companies are preparing mitigation strategies while investors eagerly await updates on how these trade tensions might affect supply chains and financial performance.

GE Healthcare and Medtronic Develop Contingency Plans

GE Healthcare has announced that its 2025 earnings outlook already incorporates a 10 basis point impact from China tariffs. A company spokesperson stated, "Our teams are working on potential mitigation plans as these trade policies evolve. Our top priority is to make sure patient and customer deliveries for products and services are not interrupted under any circumstances, while maintaining the best possible quality and cost."

Similarly, Medtronic is closely monitoring global tariff policies and assessing potential impacts on its operations. The company has indicated its readiness to implement necessary mitigations if required.

Reciprocal Tariffs and Industry-Wide Implications

President Trump recently announced a 90-day pause on most reciprocal tariffs, providing temporary relief to the industry. However, total duties on imports from China have been raised to 145%, while other countries remain subject to a 10% baseline tariff. This development has created a complex landscape for medtech firms to navigate.

Morningstar analyst Debbie Wang expects tariffs to be "highly topical" during first-quarter earnings calls. Companies may discuss strategies to realign manufacturing operations geographically to reduce exposure to tariffs.

Varying Impact Across the Industry

While larger medical device manufacturers like Boston Scientific, Edwards Lifesciences, and Zimmer Biomet have indicated that potential tariff impacts are already factored into their full-year guidance, some smaller companies face more significant challenges.

Masimo and Enovis have expressed concerns about new tariffs, particularly on products sourced from Mexico. Intuitive Surgical, which manufactures a significant portion of its instruments in Mexico, has warned that tariffs implemented there could materially affect the company.

J.P. Morgan analyst Robbie Marcus noted that Mexico has been excluded from the reciprocal tariffs list for now but remains subject to a roughly 25% tariff, with exceptions for goods compliant with the United States-Mexico-Canada Agreement.

As the industry grapples with these uncertainties, AdvaMed and other healthcare organizations continue to lobby the White House for exemptions on medical devices and critical supplies from tariffs. AdvaMed CEO Scott Whitaker has pledged to work with the administration to protect the medtech industry's interests, aiming for a "zero for zero" tariff outcome with key trading partners.