Fisher & Paykel Healthcare expects its costs to rise in the wake of Donald Trump’s new tariff regime.
The New Zealand company – which makes products used in acute and chronic respiratory care, surgery and treating obstructive sleep apnea – said it didn’t expect the move to affect its net profit for 2025 financial year, but expected costs to rise in the 2026 financial year.
The US announced it would impose a 25% tariff on products imported from Mexico and Canada and a 10% tariff on products from China starting this week.
In an update to NZX this morning, Fisher & Paykel Healthcare said it manufactures around 45% of its volume in Mexico and around 55% in New Zealand. Approximately 43% of the company’s revenue came from the US in the first half of the 2025 financial year.
It also said approximately 60% of its US volumes were supplied from its facilities in Mexico.
The company said it “does not anticipate a material impact from the announced tariffs” on its net profit after tax for the 2025 financial year.
For 2026, however, it warned the company’s costs would likely increase because of tariffs, “acknowledging that the economic environment, global response to US tariffs and foreign currency movements may be fluid over this period”.
The company said it continued to expect to reach its gross margin target of 65% through continuous improvement activities across the business, alongside “efficient growth” into existing infrastructure.
“The US tariffs announced yesterday may have added two to three years to that expectation,” the NZX statement read.
“The company is currently working through the complexities associated with the imposition of the tariffs and will provide an update on outlook for the 2026 financial year as well as an updated estimate of the timeframe to return to the gross margin target, at its full year results at the end of May.”
Managing director and CEO Lewis Gordon said the company took a “long-term view” and would work with global suppliers and US customers to find solutions to the impacts of tariffs on all parties.
“Fundamentally, our products and therapies are designed to improve care and outcomes for patients and to reduce the overall costs of providing healthcare,” he said.
“Across the business, we are continuing to make improvements that reduce costs or improve efficiencies. This proven combination is how we navigate all the various cost challenges that come our way over time.”
Trump declared an economic emergency and ordered duties of 10% on all imports from China and 25% on imports from Mexico and Canada. Energy imported from Canada, including oil, natural gas and electricity, would be taxed at a 10% rate.
Trump’s tariffs, if sustained, could cause inflation to worsen significantly, threatening the trust that many voters placed in Trump to lower the prices of groceries, gasoline, housing, autos and other goods as he promised.
They also risked throwing the global economy and Trump’s political mandate into turmoil just two weeks into his second term.
The tariffs were met with retaliation from the countries affected, including Canda, where Prime Minister Justin Treadu announced it would match 25% on up to US$155 billion in US imports.
Mexico’s president also ordered retaliatory tariffs, while China did not immediately respond to Trump’s action but said it would take “necessary countermeasures to defend its legitimate rights and interests”. The Ministry of Commerce said it would file a lawsuit with the World Trade Organization for the “wrongful practices of the US”.
– Additional reporting by AP
