With Trumps latest global tariff, how will it impact OUS sales for 3M? Seems the stock is down 5% upon liberation day, and looks set to decline more. Thoughts?
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Trump exempted electronics, computers etc from the retaliatory tariffs. China is winning
Yeah he folded as if the haters wanted the tariffs all along. 75 countries lined up for a better deal and China most certainly not wanting their oligarchs to go broke paying tariffs. Canada playing tough because they are global leaders now.
Looks like Drumf folded and put a pause to his tariff antics. Clearly his billionaire buddies made him do it.
Anyways some temporary relief before the clown in chief triggers his next fiasco !
Three business days in and the other countries are lining up to negotiate better trade deals.
PS - I'll take the other side of that bet. As is most of Wall St.
Since my name was mentioned you all get my take:
In general, barring natural disasters or truly id--tic moves, US presidents of both parties have small-ish effects on the economy that take time to be visible. The COVID pandemic is one such example of a natural disaster. The current tariff war is an example of a truly id--tic move.
For 3M it breaks down roughly like this:
- About half of 3M's COGS is raw materials.
- About half of RMs (by dollar value) are imported, so 25% of COGS is imported RMs.
- Assuming an average tariff increase of 20%, we get an average increase to COGS of 5%. (25% * 20%)
- About half of all finished good are exported from their manufacturing countries.
- Half the sales (50%) times an average 20% tariff, another 10% of cost increase. (50% * 20%)
- Total tariff impact will be at least around 15%, 5% from COGS and 10% from export sales.
All in, before any changes to customer behavior, the cost of 3M products will increase by an average of 15% purely from tariffs. Due to almost certain reciprocal tariffs, it doesn't matter if where the product us made, US or international.
3M's operating income runs in the 20-25% range. 15% tariff impact reduces that by more than half, 3M will have to raise prices. 3M will raise prices, lowering volume, and 3M still will probably make less money than before.
If I were still at 3M, if these id--tic tariffs stand, I would advise everyone to prepare for a significant recession and almost certain heavy layoffs, both US and global. At my current employer I'm somewhat shielded by long-term contracts, but we are still preparing for a deep recession.
My sincere hope is that someone will inform the president of basic economics and history that broad-based indiscriminate tariffs are utterly doomed to failure.
No pain no gain
Let’s Make America Great … Again. Can’t wait for our beautiful factories to come back to MSP. I am willing to pay 50% more and am sure my salary will double as we build our beautiful factories here. mAGA!
@kq, you need to stop drinking the MAGA kool-aid.
Tariffs are a terrible, ineffective idea.
talking about Everyday wins....it has been taken out for "review" since Jan...its been more than 3 months of review. Looks like this recognition program is going to be scrap for cost cutting. just like Work-Your-Way.
Just like BB was able to close/neuter the DEI office, claiming Trump was forcing his hand, he will use the tariffs to make his case for a 10% haircut, especially in US+ Canada, UK+EU. Maybe 15%. Start at 10% and then add another 5%. I really miss Varys. His knowledge of the unwritten rules of 3M HR were really helpful. I believe he (and others) pointed out the brutal significance of 3M firing long-time employees at the 53/54 age group (55 is a very important age in the pension calculations). Also getting to 91/92 number (age + years experience) for retiree medical is a huge loss. If there's one thing this retiree (who made it to 92+ for retiree medical by the Grace of God) has learned studying the moves of BB, it's this:
- BB works for one "team" - Wall Street. He could care less about McKnight Principles, the 15% rule, Everyday Wins, happy employees, etc. He freakin' lives on a millions (+++) dollar resort property in Florida and flies into Maplewood, what - once per month?
- BB benefited from the rivalry between Monish and Tireman. Both wanted to out-do the other to win the CEO job. Who knows if one or both somehow got Vale "exposed" (not that MV didn't have his own "issues" per his 2001 arrest - it's public record). But they did the "dirty work" of slashing thousands of jobs to cut costs (never mind the long-term impact cutting those MTE roles) to show the Board who was the fairest of them all. Funny how BB used his St-lin-like instincts and had both of them eliminate themselves.
- BB will treat the remaining employees like frogs in increasingly hotter and hotter water. Just 0.1 degree every hour. He knows severance is very costly. Don't leave on your own. Get some job options lined up and make them give you some months of payout. NEVER work more than 40 hours per week, in fact find ways to "work" 40 and actually do 20 if your boss is a je-k. The boss will get fired, maybe before you, when he/she doesn't deliver the metrics BB demands.
GLTA. The 3M of the 80s and 90s has died.
The tariffs will mostly impact 3Ms Chinese export business. Most of what is made in the EU is sold there or nearby regions, not the US.
3M along with many other multinationals gambled that cheap labor costs and non existent safety and environmental regulations would goose the bottom line. And it did for years. But if you lost your job in the US then what did you gain. The real winners were the Chinese and Wall Street. I'd rather pay more and know I'm supporting American jobs that make BB and Jamie Dimon richer.
The APAC volumes outlook for Q2 has been crashed. Plants will be going for more shut downs. It’s going to get ugly from now.
Remember, the charlatan and his eunich warned that the stock price needed to stay up in their February town hall. Were we able to cost cut our way to prosperity enough during Q1 to overcome the tariff fallout? Thank goodness those massive 2.7% raises don't take effect until Q2.
The tireman is gone, go put the wheels back on your chairs.
Less.
There's always risk. Let us cook.
3M heading back to $100-ish?
Tireman couldn't chose q better time to retire and cash out
Watch the whole economy tank with this self inflicted wound. This day will come back to haunt Wall Street and 3M is no exception.
I shot the tariff.
But I did not shoot the subsidy.