The news: Abbott Laboratories expects tariffs to add a few hundred million dollars in costs this year, CEO Robert Ford said Wednesday. That estimate echoes Johnson & Johnson’s report of an expected tariff cost of $400 million for its medtech business in 2025.

Abbott announced $500 million in new US manufacturing and R&D by the end of the year, which is expected to help mitigate tariff effects. For context, Abbott also makes diagnostics and nutritional products, although more than half of its sales comes from medical devices.

Why it matters: Many medical device companies are already locked into insurance coverage contract prices for the year. Along with industry associations, medtech players are lobbying the Trump administration for tariff exemptions or at least more time to adjust, per CNBC.

Other leading medical device companies are mostly silent on tariffs, but industry watchers expect more discussion in upcoming earnings calls. The largest medical device company, Medtronic, reports May 21, while other major players, including Stryker, Dexcom, and Phillips, report in early May.

Yes, but: While tariffs are a concern, Abbott maintained sales growth for the year, and pointed out ways it’s adjusting production between US and global facilities, according to Fierce Biotech.

• Its FreeStyle Libre continuous glucose monitor is manufactured at six global sites, but the two in the US are focused on domestic demand.
• Localized manufacturing is a tactic Abbott used during the COVID-19 pandemic when it made diagnostic tests in-country for the US and outside for international use.

The final word: Medical device companies are a bellwether for the financial impact of President Donald Trump’s tariffs.

Pharma companies still enjoying a tariff reprieve, including J&J, Eli Lilly, and Novartis, are investing more in US manufacturing, but if tariffs do come, pharma players may want to take a page from medtech’s other emerging strategy shifts.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Not a subscriber? Click here to get a demo of our full platform and coverage.