3M Company

I was hoping you'd take us through the changes in your tariff assumptions, you know, the benefit of the pause that was implemented. But did you make any specific mitigation actions in the quarter? And, you know, kind of what was the decision about including it in guidance on a go-forward basis?

So so the last time we said it was 60 cents gross. Now it's 20. The biggest change really going to be around China. You know, last year, last quarter, you know, about 80 percent of the tariff impact. You know, at the time, the rate was 125, 145. So you has 145. China was 125%. They've come down dramatically to 10 and 30. That was the biggest source of change. Things are moving around still a little bit, but we included it in the guidance mainly because we're more than halfway through the year. Things have stabilized at least a little bit. And any changes from here, you know, we'd only have a couple of months in the balance of the year that would impact 25. The rest would roll into 2026. So we feel we're pretty well calibrated. Of course, we're watching very carefully what happens in the EU. You know, we've got to watch against any re-escalation in trade tensions with China. You know, that could be a change. But from the way we see it today, I think we know enough about it in terms of the gross and net impact to roll it through into guidance, which I think is cleaner for investors. So we're offsetting $0.20 a gross tariff with both cost and sourcing. changes, which is about half of the offset, and the other half is coming through price. So the gross amount is about $140 million. Net's around 70. About half of that, say, $35, $40 million is price. The other half, $35-ish million, is going to be cost savings as well as sourcing. And the pricing piece of it, that's one of the elements that's helping us push second half growth a little bit because that's mostly a second half item.

Great. And then in your answer, they just put the spotlight on China. And, you know, there might have been an expectation there'd be some fallout because of tariffs and maybe some pushback on on your business there. But up single digits look pretty healthy. So just it was. Have you seen much of a fallout, and how much is embedded in the second half?