Caterpillar Sees $1.8-B Tariff Hit This Year

Caterpillar Inc. (CAT) is warning investors that it now expects tariffs to cost the company as much as $1.8 billion this year, higher than its guidance issued in early August, Doug Alexander reported for Bloomberg News.

Caterpillar’s outlook carries weight because it is one of the world’s largest makers of mining and construction machinery. (Photo: Caterpillar Facebook)

“While the company continues to take initial mitigating actions to reduce this impact, trade and tariff negotiations remain fluid,” Caterpillar said Thursday in a regulatory filing.

The company expects the net impact from incremental tariffs introduced this year to total $500 million to $600 million in the third quarter and $1.5 billion to $1.8 billion for the full year.

Caterpillar’s outlook carries weight because it is one of the world’s largest makers of mining and construction machinery. Its second-quarter results already reflected tariff effects, with costs hitting the top end of the range the company disclosed in April.

Caterpillar also said it now expects full-year adjusted operating margin to come in near the bottom of its target range.

The updated tariff estimate is higher than the company’s Aug. 5 guidance of $1.3 billion to $1.5 billion, which included as much as $500 million in expected third-quarter costs.