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Australia’s hearing implant giant Cochlear (ASX:COH) has clarified an April 3 release, stating its hearing implants do fall under an exemption clause in Trump’s “Liberation Day” tariffs.
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Hearing implants are ensnared within the existing Harmonized Tariff Schedule (HTS) of the U.S. which has provided some relief to companies whose products match that extant regulatory standard.
(Also known as HS codes, that sees the newly-bullish-on-American-independence Trump Administration still adhering to a system monitored by the International Trade Association. To be fair, the U.S. has a heavy hand in that organisation.)
In the company’s own words: “Cochlear confirms it will continue to be able to rely on a chapter of the [HTS] of the United States that provides for duty-free importation on a range of products into the US, including hearing implants.”
The phrase “able to rely” is probably what’s most important, given markets are still broadly nervous about how long these tariffs will stay in place for.
That could be why Cochlear shares were only up a flattish +0.65% early today.
As many analysts on Wall Street have suggested, optimistic forward-looking projections largely rely on an expectation that Trump will water down some of the tariffs he’s imposed in the coming days and weeks.
And in my view, that’s what people are expecting.
Consider how last night’s misinformation-style headlines around a 90-day pause on tariffs were so eagerly lapped up, and then traded upon, by punters (and bankers) alike. Everybody is waiting for a surprise turnaround.
Last week, UBS suggested if all tariffs put in place were to be kept permanent, U.S. CPI inflation could nearly double to 5% in the world’s leading economy.
Despite everything, Trump does face midterm elections next year, and so there will be a point – one would surely think – that Wall Street is eventually going to start reappearing in the Republican party’s current political calculus. Wall Street, after all, can go blue when it has to.
In the meantime, however, Trump looks ready to continue calling the shots. Reports (as of Tuesday morning) indicate both Japan and Vietnam are to enter into negotiations with the US and while the EU has suggested it’s ready to counter-tariff, it too (as a bloc) would rather ‘talks.’
The real wildcard here is China, which has placed 34% tariffs on America – something out of Trump’s control, but which the market largely took as a sign of further deterioration late last week and on yesterday’s horror show Monday. Trump isn’t the only catalyst anymore.
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Perhaps more importantly for Cochlear shareholders, though, is whether the USA’s hinted-at upcoming tariffs on pharma products extend to medical devices.
Cochlear, for its part, will be monitoring.
COH last traded at $253.33/sh.
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