“In our guidance, we're assuming this is a $400 million revenue headwind for the year.”

In context

“avorable FX. And we now expect organic revenue growth to be 2% at the midpoint of the range for the year. The guidance is prepared using tariff rates that are in place today and assumes no change in the current U.S. policy focus. So we're updating the guide to reflect the change in the macro environment and our highly impactful mitigation actions. It's important to note that all the rest of our guidance remains on track for the year. Let me now give you the detailed context behind each of these macro change factors. Starting with the US-China tariffs, the tariff rates here are so substantial that they're likely to significantly reduce the volume of trade between the two countries. We expect this will impact the sales of our products in China that are produced by our facilities in the U.S. In our guidance, we're assuming this is a $400 million revenue headwind for the year. These tariffs are also expected to increase the cost of China-sourced parts and subassemblies. The pull-through on the lower volumes and higher costs, net of the aggressive mitigation actions, is assumed to be a headwind of adjusted operating income in 2025 of $375 million versus the prior guide. The mitigation actions take time to complete, so we don't get all the benefit from them in 2025. Once they are complete, we expect them to fully mitigate the impact of these tariffs. Moving on now to non-China-related tariffs, these recently raised tariffs are increasing our costs where we directly import items into the U.S. but also likely increase the cost of many items that we buy in the U.S. that have overseas content. A partial offset to the impact of these tariffs is foreign exchange. The i”