US stock futures steady with China trade talks, Q3 earnings in focus
Investing.com -- Shares of several major medical device manufacturers declined on Thursday after the U.S. Commerce Department initiated a national security investigation into medical equipment and devices in early September.
Baxter International (NYSE:BAX) fell 3.5%, GE HealthCare Technologies (NASDAQ:GEHC) dropped 5.3%, Integra LifeSciences (NASDAQ:IART) tumbled 5.3%, and ResMed (NYSE:RMD) declined 2.9% following the disclosure of the Section 232 investigation, which creates "a new overhang for the already beleaguered medical device sector," according to Needham.
The probe follows similar Section 232 investigations launched for other industries including pharmaceuticals and semiconductors. Such investigations examine whether imports pose national security risks and could potentially lead to tariffs.
Needham analyst Mike Matson expects the investigation to "eventually result in additional tariffs for the industry though Trump may take a similar approach as with pharmaceuticals and gradually increase tariffs over time." In the near term, Matson believes medical device companies will attempt to pass through any new tariffs to customers by raising prices.
JPMorgan analyst Robbie Marcus offered a more measured view, stating, "While the list of MedTech products covered is broad, we don’t think it’s right to hit the panic button in response." Marcus noted the sector has historically received bipartisan support.
BTIG analyst Ryan Zimmerman characterized the investigation as "something MedTech investors should be aware of," suggesting it could be "one method to help the Administration bypass future court rulings on its ability to impose tariffs."
Longer-term, medical device manufacturers may look to increase U.S. manufacturing capacity, though analysts note this would likely take considerable time to implement.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.