Johnson & Johnson, a leading healthcare company, anticipates facing around $400 million in tariff-related expenses this year, primarily affecting its medical technology division, which produces a variety of surgical and medical devices.
Chief Financial Officer Joseph Wolk shared during a recent earnings call that the majority of these costs stem from U.S.-imposed tariffs on Chinese goods, as well as retaliatory tariffs from China. The estimate also accounts for tariffs on aluminum and steel, along with trade penalties involving Canada and Mexico.
Due to existing contractual agreements, Johnson & Johnson has limited flexibility in raising prices to offset these additional expenses.
Notably, the $400 million projection does not factor in any potential tariffs on pharmaceutical imports. The U.S. government is currently investigating pharmaceutical imports, which could signal the possibility of future tariffs in that sector.
CEO Joaquin Duato expressed concern that tariffs—particularly on pharmaceutical goods—could disrupt supply chains and lead to medication shortages. He emphasized that encouraging domestic manufacturing should rely more on tax incentives rather than import tariffs.
Looking ahead, Johnson & Johnson plans to invest over $55 billion in the next four years to ensure that all advanced medicines used in the U.S. are manufactured domestically.