Raphael Stevens

Medical technology, medical device and hospital trade groups are pushing the Trump administration for tariff exemptions on medical equipment
Consultants at PwC and BCG say manufacturers are looking to switch production to lower-tariff countries, more so than bringing production back to the U.S.
J&J forecasts $400 million tariff impact on its MedTech division
U.S. makers of personal protection equipment are applauding the new tariffs on Chinese goods, hoping they will help level the playing field here at home

President Donald Trump’s tariffs are creating a divide in the medical community.
Medical devices and protective gear made in China, Mexico and Canada were exempt from duties during the first Trump administration, but so far have not gotten a reprieve from his newest round of levies. While device makers who would take a big hit from the tariffs are pushing for a new carve out, the makers of personal protective equipment — who stand to benefit from the barriers — are not.  

The duties could also increase costs for hospitals — and therefore patients — and reduce access to critical equipment and care.
“MedTech supply chain leaders are already reporting supply chain concerns, and we cannot afford to drive up the cost of health care for patients, or on the health care system,” said Scott Whitaker, CEO of AdvaMed, the trade group which represents medical technology and device makers. “The reality is, any increased costs will be largely borne by taxpayer-funded health programs like Medicare, Medicaid and the VA.”
Hospital trade groups have also been sounding the alarm, saying that tariffs could reduce the quality of care.
“The AHA has and will continue to share with the Administration, disruptions in the availability of these critical devices — many of which are sourced internationally — have the potential to disrupt patient care,” said Rick Pollack, the CEO of the American Hospital Association. “AHA continues to push for a tariff exemption for medical devices to ensure that hospitals and health systems can continue to serve their patients and communities.”

Tariffs add pricing complexity

WUHAN, CHINA – APRIL 08: Models of United Imaging medical devices are on display during the 7th World Health Expo on April 8, 2025 in Wuhan, Hubei Province of China.
Zhang Chang | China News Service | Getty Images

Trump in February imposed 25% tariffs on imports from Canada and Mexico, but later delayed duties on many items that fall under the U.S.-Mexico-Canada Agreement.

There has been no reprieve for goods from China. Trump’s new levies on imports from the country during his second term have brought the tariff rate up to 145%.
Dozens of other countries face 10% tariffs after Trump delayed proposed steeper rates.

Medical equipment seller squeezed

Many businesses can simply raise their prices to help offset increased costs from tariffs. That doesn’t apply to a range of hospitals and other organizations buying medical equipment.
Many of those groups will have trouble passing on higher costs under current insurance coverage contracts, which they say have locked in prices for the year.
“With the level of tariffs that we’re looking at in China, businesses are going to be completely upside down on these products … they can’t pass those costs on to the consumer.,” explained Casey Hite, CEO of Aeroflow Health, a firm which provides insurance-covered medical devices ranging from breast pumps for nursing mothers to CPAP machines for sleep apnea patients.  
Hite spent last week lobbying members of Congress on Capitol Hill for an overall MedTech tariff exemption — or at the very least more time to adjust.
“I think what we would like to see, more than anything, is a runway or some predictability,” Hite said, adding “let’s do this over the next 12 months, next two years, so that U.S. organizations can prepare.”

PPE makers see tariff boost  

On the opposite end of the tariff divide, U.S. companies that produce personal protective equipment have applauded the Trump administration’s latest levies on China.
“I don’t know if it’s going to help the economy overall, but I do know that in our case, successive administrations — both Republican and Democratic — have recognized that these products are not competing on a level playing field,” said Eric Axel, CEO of the American Medical Manufacturers Association, the trade group which represents PPE Makers.
Analysts at Boston Consulting Group estimate roughly half of PPE used in the U.S. is produced in China, with roughly 10%-15% in Canada and Mexico.
The latest tariffs will add to duties imposed on PPE by the Biden administration last fall, which included 100% levies on syringes and needles imported from China. Those items will now face a total 245% tariff.
Altor Safety, which manufactures masks, N95 respirators and gloves in the U.S., has welcomed the tariffs on China. The PPE maker contracts with the U.S. government and companies like FedEx, but has not been able to gain much market share with health systems because Chinese manufacturers subsidized by Beijing undercut U.S. manufacturers on price.
Altor president Thomas Allen said the new tariffs could help the company win new contracts, adding that as Altor increases capacity, “we can actually lower our prices.”

The challenges of U.S. manufacturing

Trump has said he has imposed tariffs in large part to encourage manufacturing in the U.S. In the case of PPE, that may not happen.
But near term, consulting firms say multinational producers are looking to shift manufacturing away from China to other countries with lower tariffs rather than bring it back to the U.S.
“Managing that and the complexity there becomes super hard,” explained Vikram Aggarwal, a BCG managing director and partner.
For American-based medical device and protective gear manufacturers, one strategy now is to shift international production to Mexico and Canada, where they can potentially secure exemptions for products made under USMCA.
Many of the major medical technology and device makers produce many of their goods in the U.S., but do have multiple points for manufacturing internationally. Analysts at Canaccord Genuity note Zimmer Biomet and Stryker, two of the largest makers of knee replacements, have dozens of facilities across North America, Europe and Asia that help them navigate tariffs, but will still face a financial impact.

J&J sees $400 million tariff impact

Johnson & Johnson calculates that its MedTech division, which produces orthopedic and cardiac implants, could face a $400 million dollar tariff headwind this year, due in large part to the magnitude of duties on Chinese imports, as well as levies on non-USMCA compliant imports from Canada and Mexico.
It was one of the first MedTech firms to report first-quarter results and give a glimpse into the effects of tarrifs. CFO Joseph Wolk told analysts on the company’s earnings call that existing contracts with hospitals make it hard to raise prices in the near term.
Longer term, J&J CEO Joaquin Duato said the disruptive nature of tariffs does not create the right incentive to boost manufacturing in the U.S.
“If what you want is to build manufacturing capacity in the U.S., both in MedTech and in pharmaceuticals, the most effective answer is not tariffs but tax policy,” Duato said, noting the company is already investing $55 billion over four years to produce its advanced medications in America.
“Tax policy is a very effective tool to be able to build manufacturing capacity here in the U.S., both for MedTech and pharmaceuticals,” he added. More

Heineken first-quarter revenue beat estimates and it maintained its full-year outlook, but beer sales waned.
The company’s CEO previously described President Donald Trump’s tariffs as “relatively manageable,” but now the company says it must remain “agile.”
The 25% tariff on imported canned beer and empty aluminum cans that went into effect on April 4 remains in place.

Imported beer, including Heineken, for sale at a store in New York City on April 10, 2025. 
Timothy A. Clary | Afp | Getty Images

Heineken shrugged off the threat of tariffs earlier this year, but now the company is raising more concerns about potential disruptions to its business.
In the Dutch brewer’s earnings report released Wednesday, Heineken indicated new U.S. tariffs, particularly those targeting canned beer, could force it to adjust spending and investments.

“There are broader uncertainties, including recent tariff adjustments and potential increases, as we go forward,” the company said in its earnings release. “To navigate this fluctuating environment, we remain agile in our allocation of capital and resources.”
While Trump’s steep tariff rates on dozens of countries remain in flux under a 90-day pause, he has maintained the 25% duty on imported canned beer and empty aluminum cans that went into effect earlier this month.
Heineken reported first-quarter revenue growth that beat analysts’ expectations on Wednesday morning and affirmed its full-year guidance despite the tariff risks. But its beer sales fell 2.1% in the first quarter.
CEO Dolf van den Brink said the company expected weaker beer sales, given ongoing risks from inflation, weak consumer sentiment, and currency fluctuations, in addition to the uncertainty surrounding global tariffs.

Van den Brink’s comments mark a departure from earlier statements in February, when he described proposed U.S. tariffs, including those on aluminum used in beer cans, as “relatively manageable.”

“The beer industry is capital intensive and it’s very local. So, as such, it’s an industry that’s a bit less susceptible to disruption in international trade flows,” he told “Squawk Box Europe” in February.
At that time, AB InBev, the world’s largest brewer and owner of brands including Budweiser and Stella Artois, similarly downplayed the threat of tariffs.
“We don’t think that we’re going to have big topics to discuss during this year in terms of tariffs,” CEO Michel Doukeris said.
But now, a growing global trade conflict has led Heineken and others to reassess.
Constellation Brands reported a quarterly earnings beat last week, but lowered its long-term guidance for 2027 and 2028, citing in part “the anticipated impact of tariffs.”
“The guidance that we have provided reflects the fact that there are a lot of unknowns today, including things like tariffs,” said CEO Bill Newlands. More

Funding for the Supplemental Nutrition Assistance Program, which covers some grocery costs for low-income Americans, could be slashed by as much as $230 billion over the next 10 years.
At the same time, at least 11 states have proposed banning using SNAP benefits to buy soda, candy or other junk food.
If implemented, those changes would impact millions of U.S. shoppers and the retailers and food and beverage companies that sell to them.

Shoppers at the Walmart Supercenter in Burbank in Burbank Thursday, Nov. 21, 2024.
Allen J. Schaben | Los Angeles Times | Getty Images

For millions of low-income Americans — already rattled by the threat of tariffs and higher prices — changes to a program that helps with grocery costs could make life more expensive.
House Republicans are seeking to cut $230 billion of the U.S. Department of Agriculture’s budget over the next decade to pay for tax cuts. The Senate version of the bill calls for at least $1 billion in USDA cuts. Most, or all, of those savings would come from cutting funding for the Supplemental Nutrition Assistance Program, formerly known as food stamps.

The proposed cut, if approved, would be three times steeper than the largest previous reduction ever made, after adjusting the average annual cut for inflation, according to UnidosUS, which advocates for Latinos in the U.S.
Still, the plan faces hurdles: Congress still needs to reconcile the two very different bills passed by the House of Representatives and the Senate, and it could ultimately toss out the potential reductions to the food assistance funding to avoid losing critical votes needed to pass the farm bill.
But the changes could threaten sales for major retailers or divert spending to lower-priced brands at a time when consumers have already shown signs of financial stress.
In a statement, the USDA defended the cut and said the Trump administration “is attempting to right size the program.”
“The Supplemental Nutrition Assistance Program is just that, supplemental,” the statement said. “It was never intended to be a windfall for food companies and retailers, rather a temporary safety net for families and communities in need.”

The number of people participating in SNAP has historically fluctuated with the state of the economy and rules around eligibility, but the cohort is a significant sales driver.
Shoppers who use the benefits tend to come from larger households and spend 20% more on their monthly groceries compared with non-SNAP shoppers, according to Numerator, a market research firm that surveys U.S. consumers.
SNAP accounts for about $112.8 billion, or 4% of the total U.S. food spending, according to an Evercore ISI analysis of USDA data. For the likes of Walmart, Kroger, General Mills and PepsiCo, the sales from SNAP shoppers meaningfully add to their top lines every quarter.
On the state level, changes could be coming, too. At least 11 states have proposed limits on what families could buy with funding from the SNAP program, such as bans on using the government funding to buy soda, candy or other junk food. On Tuesday, Arkansas and Indiana both formally requested to prohibit the use of SNAP funds for such products.
Those state-level efforts to ban sugary and less-nutritious food and beverages from the program look likely to move forward, given support from the Trump administration. The proposals have gotten a boost from Health and Human Services Secretary Robert F. Kennedy Jr. and his campaign to fight chronic diseases, dubbed “Make America Healthy Again,” or “MAHA” for short.
“I’m working with [Secretary of Agriculture Brooke Rollins] and governors now in 24 states for advancing MAHA legislation to get soda pops off of the food stamp program, off the SNAP program,” Kennedy said during a Cabinet meeting at the White House on April 10.
While Kennedy doesn’t have the authority to approve those changes, Rollins has already said that she will sign waivers that states need to ban those purchases using SNAP benefits.

Already stretched

About 42.1 million people per month used SNAP benefits to buy their groceries in fiscal 2023, according to data from the USDA. That translates to roughly 1 out of every 8 people living in the U.S., based on U.S. Census data.
For low-income families who rely on SNAP benefits to buy groceries, the proposed funding cuts come at a time when grocery budgets are already stretched by inflationary pricing.
Dollar General, which caters to lower-income shoppers, has noticed strain among its customer base, CEO Todd Vasos said on a mid-March earnings call.
“Our customers continue to report that their financial situation has worsened over the last year as they have been negatively impacted by ongoing inflation,” he said on the call. “Many of our customers report that only have enough money for basic essentials with some noting that they have had to sacrifice even on the necessities.”
Walmart — the nation’s largest grocer — said consumer spending patterns have looked bumpier in recent months. Its Chief Financial Officer John David Rainey said during the company’s investor day in Dallas last week, “the uncertainty and decline in consumer sentiment has led to a little more sales volatility week to week, and frankly, day to day.”
More recently, tariffs on imported goods from across the globe, including clothing, furniture and shoes, have fueled concerns that prices will rise again and force Americans to pick and choose where and what to buy.
Consumer sentiment this month came in worse across all demographics, including age, income and political affiliation, according to Joanne Hsu, the director of the closely watched University of Michigan survey.
Even recent sales results of luxury retailers, including Restoration Hardware and Tiffany & Co. and Louis Vuitton parent LVMH, have reflected a slowdown.

Benefits at risk

As rising prices and potential SNAP cuts eat into grocery spending, food and beverage makers like Hershey and Monster Beverage could feel the sting.
Nearly 9% of food-at-home spending comes from SNAP recipients, according to Bernstein Research estimates.
Widescale cuts to SNAP would hit General Mills the hardest, thanks to its cereal lineup, according to Bernstein analyst Alexia Howard. J.M. Smucker is the next-most exposed, fueled by its frozen Uncrustables and sweet snacks portfolio resulting from its acquisition of Hostess. Then there’s Kraft Heinz, with its lunch meats, and Tyson Foods, with its meats and frozen options.
Beverage companies would also likely be affected by any belt-tightening. About 5% of SNAP benefits are spent on soda alone, according to USDA studies. More broadly, about 9% of SNAP spending goes toward “sweetened beverages,” which also includes sports drinks, energy drinks, juices and powder mixes.
That leaves beverage company Monster at risk, given its high exposure to the energy drink category and lower-income consumers, according to Citi Research analyst Filippo Falorni. Beverage giants Coca-Cola and PepsiCo would likely see their sales take a hit, too, but their diversified portfolios and away-from-home demand puts the risk to global sales at roughly 1.5%, according to a Citi Research note from late March.

Walmart did not comment on potential changes to SNAP at its investor day last week. The big-box retailer, known for its low-priced, no frills approach, has attracted wealthier shoppers in recent years.
Yet the retailer is still the top grocer for consistent SNAP shoppers, with nearly 26% market share as of late July, according to Numerator, and CEO Doug McMillon told reporters at the investor event that the big-box retailer remains focused on having “opening price points” on items that families need, such as offering alternatives to national brands with its own cheaper private label versions.
The top three grocers for SNAP shoppers are rounded out by Kroger, which captures about 9% of the group’s annual grocery spend, and Albertsons, with nearly 7%, according to the market researcher’s data.
The total amount that Walmart and others make from the taxpayer-funded food program is unclear. The USDA doesn’t release data on the amount of money grocers and retailers receive from SNAP. The Supreme Court in 2019 ruled to keep that data from the public after the Food Industry Association, then called the Food Marketing Institute, an industry group that represents grocers and food manufacturers, fought to keep it private.

Dollars stores like Dollar General and Dollar Tree are most exposed to any changes in SNAP benefits, according to Bernstein retail analyst Zhihan Ma.
“If you’re a dollar store, your full value proposition is predicated on servicing the lower-income consumers,” Ma said.
About 60% of Dollar General’s overall sales come from households with an annual income of less than $30,000 per year, CEO Vasos said at a Goldman Sachs’ retail conference last year.
Shifting behavior at the dollar store can ripple back to food and beverage companies.
Since dollar stores rely on SNAP shoppers, they are more likely to make changes on their shelves to serve those customers, Ma said. If Utah consumers can no longer use their SNAP benefits to buy soda, for example, dollar stores in that states might prioritize stocking other products.
“They’re smaller box, and they have more limited shelf space,” Ma said. “It may be a move in the right direction from a health and wellness perspective, but could be a double whammy for some of the food manufacturers, on the other side of things.”
If low-income households have less money from SNAP to cover their grocery bills, that means they’ll have less to spend on housing, electricity or other expenses outside of the grocery aisles, said Lauren Bauer, a fellow in economic studies at the Brookings Institution.
Shoppers that receive SNAP funding turn to low-priced retailers for non-grocery purchases, too. About 95% of SNAP shoppers purchased non-grocery items at Walmart in the past year and spent an average of $1,878 during that time, according to Numerator. Dollar Tree and Dollar General also win many non-food purchases from the group, the firm found.
And, Bauer added, if customers have less grocery money, they may be able to afford fewer healthy items like lean meats and fresh fruits and vegetables because those tend to be pricier than processed and packaged food.

Challenges in cutting

Despite the support of the Trump administration, states still face an uphill battle to ban sugary drinks and junk food from SNAP. For starters, there is opposition from the suppliers.
“You’re not cutting the program, you’re just dictating what certain people can and cannot purchase and putting government in the business of picking winners and losers in the grocery store and deciding for consumers,” said Merideth Potter, senior vice president of public affairs for the American Beverage Association.
Previous attempts to ban soda or candy from SNAP on the state level have failed, no matter who is sitting in the White House. The previous Trump administration denied a waiver because of the added cost to administer the restrictions, according to Potter.
To restrict certain products from SNAP after a request from a governor, a state would have to institute a cost-neutral pilot, which would have to include a trial period, evaluation and a start and end date.
Court challenges to the USDA’s legal authority to grant state waivers are also possible, Deutsche Bank analyst Steve Powers wrote in a note to clients in late March.
Shrinking the program could also have economic implications, since it would reduce the money flowing to retailers, farmers markets and other businesses that accept SNAP across communities, said Bauer of the Brookings Institution.
In the past, funding for the program has increased during challenging economic times.
The U.S. increased SNAP funding to get more dollars into the hands of needy Americans during the Great Recession and the Covid-19 pandemic.
“It’s stimulus,” Bauer said. “It creates economic activity and it especially creates economic activity during economic downturns.” More

Supplies of new and used vehicles for sale are declining rapidly as consumers flock to stores ahead of potential price increases due to tariffs.
The days’ supply of new vehicles – calculated by an estimated daily retail sales rate – dropped from 91 days at the beginning of March to 70 days this month, according to Cox Automotive.
There’s concern that the sales could come to a grinding halt once automakers and dealers sell out of their tariff-free inventories.

Brand new KIA cars are displayed on the sales lot at Serramonte Kia on March 26, 2025 in Colma, California. 
Justin Sullivan | Getty Images

DETROIT – Supplies of new and used vehicles for sale in the U.S. are declining rapidly as consumers flock to purchase cars and trucks ahead of potential price increases due to tariffs, according to auto dealers and industry analysis.
The days’ supply of new vehicles – calculated by an estimated daily retail sales rate – dropped from 91 days at the beginning of March to 70 days this month, according to Cox Automotive. Used vehicle days’ supply, which had already been low, declined by four days to 39 days, the company said.

“Consumers are trying to get ahead of tariffs on imports,” Cox’s chief economist, Jonathan Smoke, said Tuesday during an online update. “The decline in [new] days’ supply was one of the largest drops we’ve seen in several years.”
That compares with a typical monthly days’ supply move in a normal market of roughly five days to seven days, according to Cox.
New vehicle sales are running 22% above the seasonally adjusted pace of last year and are up more than 8% on a year-to-date volume basis, Smoke said. In the used vehicle market, Cox estimates sales are “up sharply,” with a 7% increase thus far this year compared with 2024.
Increased sales are good for the automotive industry, which many analysts expected to be roughly level heading into the year. But there’s concern that the sales could come to a grinding halt once automakers and dealers sell out of their tariff-free inventories.
Auto advisory firm Telemetry expects the higher costs for production, parts and other factors to result in upward of 2 million fewer vehicles sold annually in the U.S. and Canada, in part due to higher costs and associated price increases.

Automakers and suppliers may be able to bear some of the cost increases, but they’re also expected to pass them along to U.S. consumers, which could in turn lower sales, according to analysts.
Many automakers built up inventories of imported cars and trucks before President Donald Trump’s 25% tariffs on imported vehicles went into effect on April 3. But some have altered imports, held vehicles in ports or completely halted them, as in the case of Jaguar Land Rover.
General Motors has been strategically increasing some U.S. production, including upping output at a pickup truck plant in Indiana as well as canceling previously announced downtime next month at a facility in Tennessee.
Ryan Rohrman, CEO of Indiana-based Rohrman Automotive Group, last week said April started off “pretty strong,” signaling a mix of tariff- and fear-purchasing along with improved inventories compared with recent years.
“Business right now is actually pretty strong,” said Rohrman, whose group has 22 franchises. “March was really good, and it hasn’t slowed down.”
Automakers Ford Motor and Chrysler parent Stellantis have taken the tariffs as an opportunity to sell down inventories by offering customers “employee pricing” deals.
Nick Anderson, general manager of a Ford dealership in Missouri, said that unique discount and concern that prices could soon go up in response to tariffs have both helped push price-conscious consumers to his showroom. That’s good for sales but has negatively impacted the store’s gross profits.
“We’re pacing to match or beat last year,” he said. “The majority of people we’re seeing are definitely more price-conscious. … Our volume is there but the gross is down. It’s just a different type of clientele.”
Anderson said he’s optimistic about sales this year but “a lot of it will just depend on the next 60 to 90 days — what happens to the tariffs.”
Trump on Monday said he is looking to “help some of the car companies” but didn’t elaborate on what that could entail.
Stellantis Chairman John Elkann said during the automaker’s annual meeting Tuesday that he was “encouraged” by Trump’s comment, noting the 25% tariff on imported vehicles and stringent emissions regulations in Europe are putting both car markets “at risk.”

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