Philips expects to lose €300m as a result of Trump tariffs

Healthcare giant Philips expects Donald Trump’s tariff regime to cost it up to €300 million in lost revenue in the next year.

The company revised its outlook in its latest quarterly figures after Trump imposed provisional import tariffs of 25% on the EU last month. Philips cut its projected profit margin by 1% to between 11.8% and 12.3% for the coming year.

CEO Roy Jakobs said uncertainty surrounding tariffs had caused uncertainty in the markets and made it hard to companies to draw up contingency plans. Philips expects the full 25% tariffs to be implemented from July even though Trump has suspended them for 90 days while countries try to negotiate new trade deals with the US.

Philips said the tariffs could have a significant impact on its business, particularly if other countries follow suit. “Take an MRI scan, for example, which consists of 5,000 components from various parts of the world,” Jakobs said.

The company also said it was being hit by falling sales of healthcare equipment in China, which is expected to reduce its turnover by 2% to just over €4 billion.

China’s economy has still not returned to pre-pandemic levels, but Philips says it expects the country to invest more in healthcare and stimulate consumer demand in the next few years.

Philips, which started as a light bulb manufacturer in 1891, has shifted its focus from consumer electronics to healthcare in the last 15 years and dropped the word “Electronics” from its name in 2013, after it sold its audio and video operations to Japan.

Since 2021 it has had to recall 15 million Respironics devices used to treat sleep apnoea and settled a lawsuit brought on behalf of patients for €1 million. The machines were found to degrade during cleaning, releasing fine particles that claimants said had exposed them to diseases such as lung cancer.

The company has denied that the machines increase users’ risk of cancer, but the entire scandal has cost Philips at least €5.2 million so far.