Company: ISRG
Filing Date: 2025-07-23
Form Type: 10-Q
Source: 0001035267-25-000192
Chunk: 90

Company: INTUITIVE SURGICAL INC
Filing Date: 2025-07-23
Form: 10-Q
Item: Item 2
Chunk 90
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, this suspension was extended to August 1, 2025. The current administration signaled that it intended to announce tariff rates for imports from most countries, which would take effect on August 1, 2025, even as negotiations with some countries continue. We import certain raw materials and finished goods from outside of the U.S., which are subject to these tariffs, including our endoscopes, a majority of which are manufactured in Germany. We anticipate that some of our suppliers will incur incremental tariffs and may pass on those additional costs to us.

In addition, in April 2025, the U.S. tariff on all imports from China was set at 145%, while China levied a 125% tariff on all imports from the U.S. In May 2025, the countries reached an agreement, with the U.S. reducing its tariffs on imports from China to 30%, plus applicable Section 301 duties (which can be as high as 25%), and China reducing its tariffs on imports from the U.S. to 10%. Subsequently, in June 2025, these rates were confirmed in a “framework agreement” between the countries, which reportedly continue to engage in trade talks.

Our operations involve importing certain raw materials from China, which are subject to the U.S. tariff. We also import sub-assemblies to support our local da Vinci Xi surgical system manufacturing in China, and we sell U.S.-manufactured da Vinci Xi surgical systems into China. Both imports are subject to the Chinese tariffs. We expect these tariffs to have an adverse impact on the product cost of our da Vinci Xi surgical system in China.

Additional specific tariff actions against steel and aluminum, critical minerals, semiconductors, and other products have not had a material direct impact on our operations to date, but the long-term effect of these and other existing and future tariff actions is difficult to predict.

U.S. tariffs have also given rise to retaliatory trade measures by various other countries, including additional restrictions on certain exports. These retaliatory trade measures could impact the reliability and efficiency of our supply chain if they are targeted at materials important to our production operations.

Based on the announced and implemented global tariffs as of the date of this report, and assuming such tariffs remain in place, we anticipate a significant increase in our cost of revenues for the second half of 2025, which will impact our results of operations. Future changes to tariff rates and the imposition of new tariffs by the U.S. and/or other countries could result in a material impact