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Medical Product Makers Split Over Trump Tariffs

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Medical Product Makers Split Over Trump Tariffs

Introduction to Tariffs in the Medical Community

President Donald Trump’s tariffs are creating a divide in the medical community. Medical devices and protective gear made in China, Mexico, and Canada were exempt from duties during the first Trump administration, but so far have not gotten a reprieve from his newest round of levies. While device makers who would take a big hit from the tariffs are pushing for a new carve out, the makers of personal protective equipment — who stand to benefit from the barriers — are not. The duties could also increase costs for hospitals — and therefore patients — and reduce access to critical equipment and care.

Concerns from Medical Technology and Device Makers

"MedTech supply chain leaders are already reporting supply chain concerns, and we cannot afford to drive up the cost of health care for patients, or on the health care system," said Scott Whitaker, CEO of AdvaMed, the trade group which represents medical technology and device makers. "The reality is, any increased costs will be largely borne by taxpayer-funded health programs like Medicare, Medicaid, and the VA." Hospital trade groups have also been sounding the alarm, saying that tariffs could reduce the quality of care. "The AHA has and will continue to share with the Administration, disruptions in the availability of these critical devices — many of which are sourced internationally — have the potential to disrupt patient care," said Rick Pollack, the CEO of the American Hospital Association.

Tariffs Add Pricing Complexity

Trump in February imposed 25% tariffs on imports from Canada and Mexico, but later delayed duties on many items that fall under the U.S.-Mexico-Canada Agreement. There has been no reprieve for goods from China. Trump’s new levies on imports from the country during his second term have brought the tariff rate up to 145%. Dozens of other countries face 10% tariffs after Trump delayed proposed steeper rates.

Medical Equipment Seller Squeezed

Many businesses can simply raise their prices to help offset increased costs from tariffs. That doesn’t apply to a range of hospitals and other organizations buying medical equipment. Many of those groups will have trouble passing on higher costs under current insurance coverage contracts, which they say have locked in prices for the year. "With the level of tariffs that we’re looking at in China, businesses are going to be completely upside down on these products … they can’t pass those costs on to the consumer," explained Casey Hite, CEO of Aeroflow Health, a firm which provides insurance-covered medical devices ranging from breast pumps for nursing mothers to CPAP machines for sleep apnea patients.

PPE Makers See Tariff Boost

On the opposite end of the tariff divide, U.S. companies that produce personal protective equipment have applauded the Trump administration’s latest levies on China. "I don’t know if it’s going to help the economy overall, but I do know that in our case, successive administrations — both Republican and Democratic — have recognized that these products are not competing on a level playing field," said Eric Axel, CEO of the American Medical Manufacturers Association, the trade group which represents PPE Makers. Analysts at Boston Consulting Group estimate roughly half of PPE used in the U.S. is produced in China, with roughly 10%-15% in Canada and Mexico.

The Challenges of U.S. Manufacturing

Trump has said he has imposed tariffs in large part to encourage manufacturing in the U.S. In the case of PPE, that may not happen. But near term, consulting firms say multinational producers are looking to shift manufacturing away from China to other countries with lower tariffs rather than bring it back to the U.S. "Managing that and the complexity there becomes super hard," explained Vikram Aggarwal, a BCG managing director and partner. For American-based medical device and protective gear manufacturers, one strategy now is to shift international production to Mexico and Canada, where they can potentially secure exemptions for products made under USMCA.

Impact on Major Medical Technology and Device Makers

Many of the major medical technology and device makers produce many of their goods in the U.S., but do have multiple points for manufacturing internationally. Analysts at Canaccord Genuity note Zimmer Biomet and Stryker, two of the largest makers of knee replacements, have dozens of facilities across North America, Europe, and Asia that help them navigate tariffs, but will still face a financial impact. Johnson & Johnson calculates that its MedTech division, which produces orthopedic and cardiac implants, could face a $400 million dollar tariff headwind this year, due in large part to the magnitude of duties on Chinese imports, as well as levies on non-USMCA compliant imports from Canada and Mexico.

Conclusion

The tariffs imposed by the Trump administration have created a divide in the medical community, with device makers pushing for a new carve out and PPE makers benefiting from the barriers. The duties could increase costs for hospitals and patients, reduce access to critical equipment and care, and disrupt the supply chain. While some companies may shift production to countries with lower tariffs, others may face financial impacts. The situation highlights the complexity of international trade and the need for careful consideration of the effects of tariffs on different industries and stakeholders.

FAQs

Q: What are the tariffs imposed by the Trump administration on medical devices and protective gear?
A: The tariffs imposed by the Trump administration on medical devices and protective gear range from 10% to 145%, depending on the country of origin and the type of product.
Q: How will the tariffs affect hospitals and patients?
A: The tariffs could increase costs for hospitals and patients, reduce access to critical equipment and care, and disrupt the supply chain.
Q: Which companies will be most affected by the tariffs?
A: Device makers, such as Zimmer Biomet and Stryker, and companies that produce PPE, such as Altor Safety, will be most affected by the tariffs.
Q: Will the tariffs encourage manufacturing in the U.S.?
A: The tariffs may not encourage manufacturing in the U.S., as companies may shift production to countries with lower tariffs rather than bring it back to the U.S.
Q: What is the estimated impact of the tariffs on Johnson & Johnson’s MedTech division?
A: The estimated impact of the tariffs on Johnson & Johnson’s MedTech division is a $400 million dollar tariff headwind this year.

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Global Trends and Politics

Walmart Expands Drone Deliveries to More States

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Walmart Expands Drone Deliveries to More States

Introduction to Walmart’s Drone Deliveries

Walmart is bringing drone deliveries to three more states. On Thursday, the big-box retailer said it plans to launch the speedier delivery option at 100 stores in Atlanta, Charlotte, Houston, Orlando, and Tampa within the coming year. With the expansion, Walmart’s drone deliveries will be available in a total of five states: Arkansas, Florida, Georgia, North Carolina, and Texas.

How Drone Deliveries Work

Customers will request a delivery through the app of Wing, the operator who flies the drones through a deal with Walmart. The drone operator will have an up to a six-mile range from stores. Drone deliveries are one of the buzziest examples of Walmart’s efforts to compete with rivals like Amazon on convenience along with low price.

Walmart’s Efforts to Compete with Amazon

With more than 4,600 Walmart stores across the U.S., the retailer has used its large footprint to get online orders to customers faster. It has an Express Delivery service that drops purchases at customers’ doors in as fast as 30 minutes, along with InHome, a subscription-based service, that puts items directly into people’s fridges. The company began same-day prescription deliveries last fall and has expanded the service across the country.

Customer Feedback and Demand

"The number one piece of feedback that we get from our customers are, ‘When are you expanding?’" said Greg Cathey, senior vice president of Walmart U.S. transformation and innovation, referring to drone delivery. Cathey said shoppers using the drone service typically order urgent items, such as hamburger buns for a cookout, eggs to make brownies or Tylenol or cold medicine needed when sick.

Delivery Time and Items

Drone deliveries take 30 minutes or less, the company said. So far, some of the most frequently delivered items include eggs, ice cream, pet food, and fresh fruit, including bananas, lemons, and eggs, Walmart added. Walmart stores have an assortment of over 150,000 items in a location. Over 50% of those can be delivered by drone, Cathey said.

Challenges and Setbacks

Yet the rollout of speedy deliveries across the U.S. has come with stops and starts. Three years ago, Walmart announced a plan to expand drone deliveries with DroneUp so it would be able to reach 4 million households across six states fulfilled from 37 stores in parts of Arizona, Arkansas, Florida, Texas, Utah, and Virginia. At the time, the company’s leaders said the retailer would be able to deliver over 1 million packages by drone in a year by using those sites. The rollout never stuck.

Current Progress and Comparison to Amazon

Walmart’s drone delivery count so far is modest. The company did not share the specific count, but said it has racked up a total of more than 150,000 drone deliveries since 2021. Chief competitor Amazon’s expansion of drone deliveries has been slow-going, too. The e-commerce giant set a goal to deliver 500 million packages by drone per year by the end of the decade through its service, Prime Air.

Testing and Expansion

Walmart has tested drone deliveries in Northwest Arkansas, near its hometown of Bentonville, and scaled them to reach most of the population in the Dallas-Forth Worth area. Several drone operators, including Zipline, Flytrex, DroneUp, and Wing, have powered Walmart’s deliveries, but the retailer has not provided the financial terms of the deals or the amount of money it has made from sales delivered by drones.

Future Plans and Goals

Kieran Shanahan, chief operating officer of Walmart U.S., said the company wants to offer "flexibility and convenience" with drones, along with speedier deliveries by van. "We see it as part of a broader ecosystem of things," he said. "And who knows what five years, 10 years time will bring as new technologies and capabilities unlock?"

Conclusion

Walmart’s expansion of drone deliveries is a significant step towards competing with Amazon and providing faster and more convenient delivery options to its customers. While there have been setbacks and challenges, the company remains committed to its goal of providing speedy and flexible delivery options.

FAQs

Q: What states will Walmart’s drone deliveries be available in?
A: Walmart’s drone deliveries will be available in a total of five states: Arkansas, Florida, Georgia, North Carolina, and Texas.
Q: How do customers request drone deliveries?
A: Customers will request a delivery through the app of Wing, the operator who flies the drones through a deal with Walmart.
Q: What is the delivery time for drone deliveries?
A: Drone deliveries take 30 minutes or less.
Q: What items are most frequently delivered by drone?
A: Some of the most frequently delivered items include eggs, ice cream, pet food, and fresh fruit.
Q: How many items can be delivered by drone?
A: Over 50% of the 150,000 items in a Walmart store can be delivered by drone.

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Global Trends and Politics

Used Vehicle Prices Decrease

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Used Vehicle Prices Decrease

Introduction to Used Vehicle Prices

A Ford Mustang is seen at a used car dealership in Montebello, California on May 5, 2025.
Frederic J. Brown | AFP | Getty Images
DETROIT — Used vehicle prices last month eased from their recent high in April as consumers who may have needed a vehicle but feared price hikes due to tariffs flocked to purchase a car or truck, according to a closely watched barometer of preowned prices.

Used Vehicle Value Index

Cox Automotive’s Manheim Used Vehicle Value Index — which tracks prices of used vehicles sold at its U.S. wholesale auctions — decreased 1.5% from April to May, but remained 4% higher than a year earlier. April’s level was the highest since October 2023.
"Wholesale appreciation trends were remarkably strong in April, but the market gave some of that strength back in May, though values remain well above last year’s levels," said Jeremy Robb, senior director of economic and industry insights at Cox Automotive.

Impact on Retail Prices

Retail prices for consumers traditionally follow changes in wholesale prices, but they have not fallen as quickly as wholesale prices in recent years.
While President Donald Trump’s tariffs of 25% on new imported vehicles and many parts do not directly impact used car sales, changes in new vehicle prices, production and demand affect the used car market, which is how the majority of Americans purchase a vehicle.

Demand and Inventory Levels

Demand has stayed relatively strong as inventory levels for used vehicles – 2.2 million – remain low compared with historical levels. That comes as consumers have been holding on to their vehicles for longer and as the industry deals with less production in recent years amid the coronavirus pandemic and global supply chain shortages.
Cox reports retail used vehicle sales in May were down 3% compared with April but higher year over year by 4%.

Stabilization of Used Vehicle Prices

Cox previously said it was seeing used vehicle prices continue to stabilize after swinging wildly for several years before starting to calm down in 2024.

Conclusion

In conclusion, used vehicle prices have eased from their recent high in April, but remain higher than last year’s levels. The market is expected to continue stabilizing, with demand staying relatively strong and inventory levels remaining low.

FAQs

Q: What is the current trend in used vehicle prices?

A: Used vehicle prices have eased from their recent high in April, but remain 4% higher than a year earlier.

Q: What is the Manheim Used Vehicle Value Index?

A: The Manheim Used Vehicle Value Index is a closely watched barometer of preowned prices that tracks prices of used vehicles sold at wholesale auctions.

Q: How do tariffs on new imported vehicles affect the used car market?

A: Tariffs on new imported vehicles do not directly impact used car sales, but changes in new vehicle prices, production, and demand can affect the used car market.

Q: What is the current demand for used vehicles?

A: Demand for used vehicles has stayed relatively strong, with retail used vehicle sales in May down 3% compared with April but higher year over year by 4%.

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Global Trends and Politics

Federal Workforce Faces Unprecedented Layoffs Amid Economic Uncertainty

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Federal Workforce Faces Unprecedented Layoffs Amid Economic Uncertainty

As the Department of Government Efficiency (DOGE) concludes its cost-cutting initiatives, the ripple effects of mass layoffs continue to impact federal employees and the broader job market. The Trump administration’s aggressive downsizing efforts have led to significant job losses across various federal agencies, raising concerns about the long-term implications for public services and the economy.

Economic Uncertainty and Job Market

The broader economic landscape remains volatile, with trade tensions and policy shifts contributing to uncertainty. While the April jobs report exceeded expectations, private-sector hiring has slowed, with ADP reporting the lowest growth in over two years. Companies are increasingly citing artificial intelligence (AI) as a factor in workforce reductions, signaling a shift in hiring practices and organizational structures.

Companies Announcing Layoffs

Several major corporations have announced significant layoffs in recent weeks:

  • Procter & Gamble: The consumer goods giant plans to cut 7,000 jobs, approximately 15% of its non-manufacturing workforce, over the next two years as part of a restructuring effort aimed at streamlining operations and reducing costs.

  • Microsoft: The tech company announced the reduction of about 6,000 employees, or 3% of its global workforce, to flatten management layers and improve efficiency.

  • Citigroup: The financial institution is set to reduce its staff by around 3,500 positions in China, primarily affecting the information technology services unit, as part of a broader reorganization strategy.

  • Walmart: The retail giant plans to eliminate approximately 1,500 jobs across various divisions, including global technology and U.S.-based e-commerce fulfillment, to simplify operations amid rising costs.

  • Klarna: The fintech company has reduced its headcount by 40%, attributing the cuts to AI investments and a hiring freeze that led to attrition.

  • CrowdStrike: The cybersecurity firm announced plans to cut 500 employees, about 5% of its staff, citing AI’s transformative impact on the industry and the need to evolve its operating model.

  • Disney: The entertainment conglomerate is set to lay off several hundred employees worldwide across various divisions, including film and TV marketing, as part of efforts to enhance operational efficiency.

  • Chegg: The online education company will lay off 248 employees, representing 22% of its workforce, in response to the growing influence of AI-powered tools in the education sector.

  • Amazon: The e-commerce leader plans to eliminate about 100 jobs in its devices and services division, including teams working on Alexa and Echo products, as part of ongoing cost-trimming efforts.

  • Warner Bros. Discovery: The media company will lay off fewer than 100 employees across various divisions, aligning with its recent reorganization into two main units: global linear networks and streaming and studios.

Impact on Federal Workers

The federal workforce has not been immune to these trends. The Trump administration’s initiatives have led to the loss of nearly 60,000 federal jobs, with projections indicating further reductions in the coming year. Agencies such as the Department of Education, Department of Veterans Affairs, and the Environmental Protection Agency have experienced significant staffing cuts, prompting legal challenges and public outcry.

In particular, the Department of Education faces a potential 40% reduction in staff, a move currently under judicial review. Similarly, the Department of Veterans Affairs plans to cut 15% of its workforce, raising concerns about the impact on veteran services. The Environmental Protection Agency has already laid off over 300 employees, affecting its capacity to enforce environmental regulations.

Legal and Political Challenges

These sweeping changes have sparked legal battles and political debates. Federal judges have issued injunctions blocking some of the proposed layoffs, citing the need for congressional approval and the potential harm to public services. The administration has appealed these decisions, seeking Supreme Court intervention to proceed with its downsizing plans.

Critics argue that the rapid implementation of these workforce reductions undermines the stability and effectiveness of federal agencies. Supporters contend that the measures are necessary to eliminate inefficiencies and reduce government spending.

Conclusion

As the federal government and private sector navigate these transformative changes, the job market remains in flux. The integration of AI, economic pressures, and policy decisions continue to reshape employment landscapes, leaving many workers facing uncertainty. The long-term effects of these developments will depend on the balance struck between innovation, fiscal responsibility, and the preservation of essential public services.

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