NZ medtech hit with US tariff blitz

Fisher & Paykel Healthcare finds itself in the crosshairs of Donald Trump’s aggressive tariff policies.

With nearly half of its production in Mexico and the majority of its US-bound products originating there, the company faces a significant blow from the newly announced 25% tariffs on Mexican imports. The timing couldn’t be worse as these tariffs, effective February 4, 2025, threaten to disrupt the flow of approximately 43% of the company’s revenue from the US market.

Despite reassurances that the 2025 financial year won’t see a drastic hit on net profit after tax, Fisher & Paykel Healthcare anticipates a tough road ahead for 2026. The looming tariffs are expected to hike up costs, complicating the company’s path to maintaining its targeted 65% gross margin. In fact, these tariffs may push back achieving that goal by two to three years, reflecting the harsh economic realities imposed by US trade policies.

Managing Director and CEO Lewis Gradon said, “The company takes a long-term view and will be working with global suppliers and US customers to provide solutions to best mitigate the impact of the 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. 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.”

The company is navigating the complexities of the new tariffs and will provide an updated 2026 financial outlook, along with a revised timeline for reaching its gross margin target, in its full-year results at the end of May.

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