$400 Million Tariff Blow Looms Over Johnson & Johnson Medical Device Profits

Johnson & Johnson is bracing for a $400 million profit hit in 2026 due to rising tariffs, with its medical technology division set to absorb most of the damage. On April 15, CFO Joseph Wolk warned investors that new U.S. trade policies and retaliatory measures abroad could seriously dent margins.

Tariffs linked to U.S.-China trade tensions are the largest contributor to this projected loss, severely impacting U.S. exports to China. Although some pharmaceutical goods were granted exemptions, medical devices were left exposed. Additional pressure stems from duties imposed by Canada and Mexico that fall outside NAFTA protections, along with global steel and aluminum tariffs.

Wolk admitted the company’s hands are tied—long-term shipping contracts limit their ability to pass on costs. For now, J&J is quantifying the damage and watching for any potential policy shifts or negotiation windows in late 2025.

CEO Joaquin Duato didn’t hold back, criticizing the U.S. tariff approach as counterproductive to domestic manufacturing goals. He warned of potential product shortages and argued that favorable tax incentives, not trade barriers, had been the real driver of industry investment since the 2017 tax reforms.

Despite these looming challenges, J&J reported better-than-expected Q1 2025 results, with total revenue hitting $21.9 billion and medical tech growing 4.1% thanks to acquisitions and surgical product gains. However, restructuring costs in the orthopedics segment remain a drag on overall performance.