Europe's medical device makers hit by Trump tariffs

Europe’s Medical Device Makers Hit by Trump Tariffs

Europe’s medical device manufacturers are grappling with significant challenges due to President Donald Trump’s tariffs. The rising costs are impacting margins, share prices, and adding layers of uncertainty to the medtech sector. Here are key insights into this ongoing situation:

– Siemens Healthineers AG: On Wednesday, the company’s shares plummeted to their lowest ever, following a warning that they expect tariff-related costs to surge to ₹400 million ($460 million) by fiscal 2026. Despite promising business prospects in the U.S., CFO Jochen Schmitz indicated that they will be reassessing strategies to mitigate these financial pressures.

– Ambu A/S: This Danish competitor also highlighted that tariffs could reduce its margins by approximately 2 percentage points.

– Royal Philips NV: The company forecasts a potential tariff impact of up to ₹200 million this year.

– Ongoing Uncertainty: Even with an EU-US agreement to mitigate certain duties, concerns loom large as Washington is reportedly investigating further imports of medical devices, which could result in additional tariffs.

– Market Reactions: Siemens Healthineers’ shares dropped by as much as 13% in Frankfurt, marking its steepest intraday decline since its market debut in 2018. Similarly, Ambu saw a 19% drop in Copenhagen after its quarterly earnings fell short of expectations.

– Sales Growth & Future Outlook: Siemens Healthineers reported a sales growth forecast of 5% to 6% for fiscal 2026, which analysts from Jefferies labeled as cautious. The company is exploring strategic options and may even consider selling its diagnostics segment, potentially valued at over ₹6 billion.

The overall impact of President Trump’s tariffs on Europe’s medical device makers brings a complex mixture of risk and opportunity. As these companies navigate this turbulent landscape, their ability to adapt will be crucial for their future success.