Medtronic Eyes Investment in Japanese Medical Device Startups Amid Tariff Pressures

Aug 11, 2025 17:35 CST Updated 17:36

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Recently, according to Nikkei News reports, as the Trump administration's tariff policies become clearer,Medtronic is considering investing in Japanese startups to reduce trade barriers.

Entering the 50th Anniversary in Japan

July 31, 2025U.S. President Trump signed an executive order - "Further Amendments to Reciprocal Tariff Rate Measures" (Further Modifying the Reciprocal Tariff Rates), launched for 67 countries and the EUTariff rate of 15% to 41% for imported goods.

Among these, the tariff increase on the EU reached the highest level in decades, raising the average tariff on U.S. imports from the EU from 1.2% in 2024 to 17.5%.

It is worth noting that,Several major medical technology companies, including Medtronic and Johnson & Johnson, have established their European factories in Switzerland, which is not a member of the European Union. Currently, the United States imposes a 39% tariff on Switzerland.

Among the major countries in Asia, except for China, it is basically confirmed:

Myanmar, Laos 40%
India 25% (Trump claims that if India continues to buy Russian oil, it will be increased further)
Vietnam is 20%

The Philippines, Thailand, and Cambodia account for 19%.
Japan, South Korea set at 15%

Japan and South Korea are subject to lower tariff rates.

Since Medtronic established Medtronic Japan Co., Ltd. in 1975, this year marks the 50th anniversary of Medtronic's entry into Japan.

In July this year, Medtronic announced that it had reached an exclusive U.S. distribution agreement with Japan's Future Medical Design Co., Ltd. (FMD) to sell FMD's specialized and general peripheral guidewires. This expands Medtronic's portfolio of devices for treating peripheral artery disease via the radial artery approach.

Medtronic to Become Exclusive Distributor of 10 New F-14 and F-18 Peripheral Stainless Steel Guidewires from Japanese FMD Company.FMD CompanyA 0.018-inch guidewire, 400 cm in length, along with Medtronic's 200 cm (working length) In.Pact 018 drug-coated balloon and Pacific Plus percutaneous transluminal angioplasty catheter, provides a complete set of tools required to access the lesion site via the radial artery approach.

FMD Guidewire Designed for Crossability, Trackability, and Tip Stability to Handle Complex Cases. The device's 0.014-inch and 0.018-inch diameters are suitable for both complex and routine cases; its 300 cm and 400 cm working lengths allow for femoral or radial access; its stainless steel core provides strength and torque; its various tip stiffness options assist in navigating tortuous vessels and crossing challenging lesions or occlusions.

It is reported that Medtronic's future investments in Japan may focus on areas such as artificial intelligence. This is worth further attention.

Japan is Medtronic's fourth largest market

According to Medtronic's 2025 financial report released in May 2025, the fiscal year 2025 (ending on April 25, 2025)Its global revenue was $33.537 billion, with adjusted revenue at $33.627 billion, a year-over-year increase of 3.6%, and organic growth of 4.9%.

In FY2025, operating profit and operating profit margin calculated according to U.S. Generally Accepted Accounting Principles (GAAP) reached US$5.955 billion and 17.8%, respectively, representing year-over-year growth of 16%. The operating profit margin improved by 190 basis points.

Of which, revenue in the U.S. reached $17.171 billion, representing a year-over-year increase of 3.7% and organic growth of 3.8%.

Revenue from regions outside the U.S. was $16.365 billion, representing a 3.6% increase year-over-year and 6.1% organic growth.

The combined revenue of the five major markets—Western Europe, Japan, Australia and New Zealand, Canada, and South Korea—reached 10.2 billion US dollars, with Western Europe ranking first, accounting for approximately 70%, or 7.14 billion US dollars.Japan ranks second, accounting for about 15%, or 1.53 billion US dollars.

Looking at emerging markets, the total revenue from China, the Middle East and Africa, Latin America, Southeast Asia, Eastern Europe, and South Asia amounted to $6.2 billion, with China ranking first, accounting for approximately 40%, or $2.48 billion; the Middle East and Africa totaled about $1.24 billion.

In other words, the United States, Western Europe, China, and Japan are currently Medtronic's top four markets.

Medtronic CEOGeoff Martha recently stated that the company is "paying close attention" to the tariff reduction initiatives.

Company executives said on the Medtronic fiscal year 2025 fourth-quarter earnings call,The Company Is Preparing for a Net Tariff Impact of $200 Million to $350 Million for the 2026 Fiscal Year, and take all possible measures to alleviate the situation.

The company expects the tariff impact to be minimal in the first fiscal quarter, 10% in the second quarter, 30% in the third quarter, and 60% in the fourth quarter. Despite these headwinds, Medtronic executives said they have implemented mitigation strategies to offset the majority of the tariff impact.

Medtronic is particularly focused on the tariff situations between the United States and China, and has forecasted the company’s financial situation based on two possible tariff scenarios. Chief Financial Officer Thierry Pieton stated that the management team has developed expectations based on two potential scenarios.The low-value assumption for the projected impact is that the current U.S.-China bilateral tariffs during the 90-day suspension period remain unchanged throughout fiscal year 2026; the high-value assumption is that the tariffs return to higher levels after the 90-day suspension period ends.

Currently, except in China, Trump's global tariff policy has been largely finalized. On August 3 local time, U.S. Trade Representative Grier stated,U.S. President Trump’s new round of tariffs on multiple countries last week is "basically set" and will not be adjusted in the current negotiations.

This also means that global companies are now basically able to calculate their tariff costs. With the reduction of tariff uncertainty, the restructuring of global supply chains may accelerate. So, what will the major medical technology giants do in the future? Instrument Family will continue to follow up.

END

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