A thawing in the U.S./China trading relationship is excellent news for a company like GE HealthCare Technologies (GEHC 5.92%). It's a large exporter to China (a market management sees as having excellent long-term potential) and uses Chinese-sourced components in its products. As such, the stock jumped as high as 11.3% in early trading on the news that the U.S. and China have agreed to ease tariffs on each other's goods for an initial 90-day period.

What it means for GE HealthCare

The impact of tariffs on GE HealthCare is seen in its earnings guidance. Back in February, management said tariffs would hit its earnings per share (EPS) in 2025 by $0.05. Fast forward to the end of April (almost a month after the "Liberation Day" tariffs were announced), and management discussed an additional $0.80 net hit from the tariffs. For reference, GE HealthCare's current full-year EPS guidance for 2025 calls for $3.90 to $4.10.

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In addition to a cost impact, GE HealthCare is a major exporter to China, and the country's aim to improve its healthcare provision is a key driver of demand for GE's scanners and imaging equipment. Indeed, management outlined that about $0.65 of the total $0.85 impact on EPS was due to U.S./China tariffs, with CFO James Saccaro noting on the earnings call: "It really goes both ways. We do ship a fair amount of product from the U.S. to China and vice versa."

What's next for GE HealthCare?

The thawing of the U.S./China trading relationship is excellent news for GE HealthCare and the Chinese healthcare system. It could also lead to investors pricing in improved assumptions for the company's earnings in 2025, which is why the stock is up today.