| The health care industry is getting a brief breather from one set of the Trump administration’s tariffs. But the bigger trade fight may have only just begun. We’re getting the first glimpse into the impact of tariffs President Donald Trump imposed using a 1977 emergency economic powers law, but which the Supreme Court struck down in February. In quarterly earnings calls, medical device companies are beginning to detail how much in refunds they’re getting back from the government following the high court ruling earlier this year. But some are signaling uncertainty about the future as additional tariffs loom. The narrative differs throughout the industry: - Medline: The medical-supply company says it’s eligible to receive about $507 million in refunds for tariffs it paid before the tariffs were overturned by the Supreme Court, and will be returning about $89 million to customers. Looking ahead, the company expects existing tariffs to cost it about $350 million in 2026.
- GE HealthCare Technologies: In its recent earnings call, the company said it had received more than $100 million in tariff refunds, but that the tariffs had no net impact on its year-over-year margin once refunds were included. Executives appear more concerned about the rising cost of items such as memory chips, oil and freight.
- Solventum: The company, which spun off from 3M in 2024, received a $100 million refund check that offset the anticipated costs of the tariffs.
- Baxter: The company received $75 million in refunds but says it remains impacted by the 10 percent tariff imposed by Trump following the Supreme Court ruling.
→ Outside of medical devices: Health care services and distribution company Cardinal Health expects to receive about $200 million in total refunds, but it’s also returning some of that to customers who had paid higher prices because of the tariffs. “We continue to incur costs from the tariffs that replaced” ones that have been struck down, said Aaron Alt, Cardinal Health’s chief financial officer, on Tuesday’s earrings call. Why it matters: The refund data offers a glimpse at how the unwinding of Trump’s old tariff regimen is playing out in health care — including how much the tariffs actually cost manufacturers and which ones are returning money to their customers. Some companies had been questioning whether to request tariff refunds at all rather than risk any backlash from the administration, multiple people tell me. → While the tariffs impact the medical device industry itself, there are also downstream impacts on hospitals and other areas of the health system that utilize their products. A recently released survey from Bank of America Global Research found that, on average, hospitals expect a roughly 5.6 percent increase in medical device costs due to the tariffs. Honorable mention: Telehealth company Teladoc, meanwhile, is warning that tariffs could raise the cost of imported components for its virtual-care devices. But it hasn’t put a dollar figure on those costs just yet. “We depend on a limited number of third-party suppliers for certain components of our medical devices, and the loss of any of these suppliers, or their inability to provide us with an adequate supply of materials, could harm our business,” the company said in its most recent quarterly report. The refunds may provide some short-term relief, but the industry is still trying to figure out what the next phase of Trump’s trade policy will mean for its costs and supply chains. “The key challenge to this industry, like many others, is the unpredictability of the U.S. trade policy at the moment; it makes it costly to make long-term decisions in this environment,” said Dawn Shackleford, a former federal trade official who now runs the strategic consulting firm Looking Glass Trade. “There are potentially unreliable tariff authorities being used to implement new and novel duties on this and other sectors.” → Following the Supreme Court ruling, the Trump administration imposed a temporary 10 percent global tariff under Section 122, which has also triggered litigation. There are also country-specific Section 301 tariffs imposed on some products, with the potential for more to come. Trump has also increasingly turned to Section 232 tariffs, which impose duties on imports that could be considered a national security risk. The administration is mulling whether to slap the medical device industry with tariffs under this section of the law, which are significantly higher than those imposed under Section 301. What to watch: A decision from the White House could come within the next month. “We hope this 232 investigation will bring some clarity and stability to the industry, through a low tariff rate, so that we can keep costs low and continue to lead the world in innovation while manufacturing right here in the U.S.,” Scott Whitaker, the president and CEO of medtech industry group AdvaMed, tells me. He emphasizes that the medical device industry in the United States has a trade surplus with markets around the world, including China. “GOP lawmakers release Fauci texts discussing covid vaccine and pregnancy,” The Post’s Anna Liss-Roy and Rachel Roubein write. “New No Surprises Act rules force employer plans to justify claim cuts,” Allison Bell writes for BenefitsPro. “GLP-1 marketing growth, biosimilar competition and China top pharma’s Q2 earnings,” Jack O’Brien and Lola Offenback write at MM+M. This newsletter is published by WP Intelligence, The Washington Post’s subscription service for professionals that provides business, policy and thought leaders with actionable insights. WP Intelligence operates independently from The Washington Post newsroom. Learn more about WP Intelligence. | 
