Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH) shares are having a tough start to the week.

In morning trade, the ASX 100 share is down over 8% to $31.55.

What is Fisher & Paykel Healthcare?

Fisher & Paykel Healthcare describes itself as a leading designer, manufacturer and marketer of products and systems for use in acute and chronic respiratory care, surgery, and the treatment of obstructive sleep apnoea.

It notes that its medical devices and technologies help clinicians deliver the best possible patient care. They enable patients to transition into less-acute care settings, recover more quickly and avoid more serious conditions.

Furthermore, it highlights that because of its products and therapies, many patients can be treated in the comfort of their own homes instead of in the hospital. Not only does this make life better for the patient, but it also reduces costs for the world's healthcare systems.

Why is this ASX 100 share sinking?

Investors have been hitting the sell button today after the company revealed that it would be negatively impacted by US President Donald Trump's trade tariffs.

It notes that the United States has announced that a 25% tariff would be imposed on products imported from Mexico and Canada, and a 10% tariff would be imposed on products imported from China, with effect on 4 February 2025.

This is bad news for the company as it currently manufactures approximately 45% of its volume in Mexico and approximately 55% in New Zealand.

For the first half of FY 2025, approximately 43% of revenue came from the United States. And approximately 60% of US volumes are supplied from the company's Mexico manufacturing facilities.

What's the impact?

While the ASX 100 share doesn't currently anticipate a material impact from the announced tariffs on its net profit after tax in FY 2025, it believes its costs will increase in FY 2026 and weigh on its margins.

Nevertheless, Fisher & Paykel Healthcare continues to expect to eventually reach its gross margin target of 65% through its long-standing continuous improvement activities across the entire business, coupled with efficient growth into existing infrastructure.

The only problem is that the US tariffs may have added two to three years to that expectation.

The ASX 100 share's 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.