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Health care company says Trump tariffs will cost it $60M–$70M this year
The health care sector is bracing for higher prices and potential shortages.
arstechnica.com
Baxter International, a prominent health care and pharmaceutical manufacturer, reports that President Trump's tariffs will likely cost the company $60 million to $70 million this year, according to the Chicago Tribune.
The hefty toll was revealed by Baxter's executive vice president and chief financial officer, Joel Grade, during an earnings call Thursday.
"We are able to mitigate a portion of these impacts," Grade reportedly said in the call. "Currently a majority of Baxter’s products sold in the US are manufactured in the US and made largely from US-made components. However, international procurement is part of our business operations and as such we are impacted from the US and retaliatory tariffs that have been issued."
Baxter makes a number of pharmaceutical and hospital products, but may be best known for being a leading source of IV fluid bags. Last year, the catastrophic damage from Hurricane Helene included ravaging a Baxter manufacturing plant in Marion, North Carolina, that produces 60 percent of the country's supply of IV solutions.
In the call, Grade noted that only a small fraction of Baxter's total sales are in China. But, "given the magnitude of the tariffs that have been enacted between the two countries, these tariffs now account for nearly half of the total impact," he said.
The Tribune reported that Baxter is now looking into ways to dampen the financial blow from the tariffs, including carrying additional inventory, identifying alternative suppliers, alternative shipping routes, and "targeted pricing actions." Baxter is also working with trade organizations to lobby for exemptions.
In general, the health care and medical sector, including hospitals, is bracing for price increases and shortages from the tariffs. The health care supply chain in America is woefully fragile, which became painfully apparent amid the COVID-19 pandemic.
Baxter isn't alone in announcing heavy tariff tolls. Earlier this week, GE Healthcare Technologies Inc. said the tariffs would cost the company around $500 million this year, according to financial service firm Morningstar. And in April, Abbott Laboratories said it expects the tariffs to cost "a few hundred million dollars," according to the Tribune.