Merck & Co. (MRK, Financial) has announced that its financial outlook for 2005 incorporates the effects of tariffs introduced by both the U.S. and foreign governments. A significant portion of these tariffs are linked to trade with China. The company anticipates that these trade policies will add approximately $200 million in incremental costs, primarily impacting its cost of sales.
This anticipated cost increase is expected to have a negative effect on Merck's gross margin, as the tariffs are absorbed within operational expenses. The pharmaceutical giant is considering these factors as it navigates the challenges posed by the current global trade environment.
