Cat chief execs predict additional $100 million in Q3 expenses due to fresh tariffs

Caterpillar Inc., the global machinery and equipment giant, is grappling with the impact of tariffs as trade and negotiations continue to be fluid. The CEO of Caterpillar, Joe Creed, reported that the additional costs caused by the Trump administration tariffs have escalated.

According to a recent SEC filing, Caterpillar expects an additional $100 million in costs this quarter, bringing the total tariff-related costs for the third quarter to a range of $500 million to $600 million. This marks an increase from the initial estimate of between $400 million and $500 million.

The Resource Industries division of Caterpillar is expected to incur about 20% of these costs this quarter, with the Construction Industries group absorbing approximately 55%. The Energy & Transportation group is expected to face approximately 25%.

The tariffs are affecting a wide range of companies, including Caterpillar Inc., specifically. The company, which employs about 51,000 people in the United States out of a total of approximately 113,000 employees worldwide, has a footprint in 25 states, with 65 key locations in the United States.

Despite the tariff-related costs, Caterpillar Inc.'s market capitalization has risen over the past six months, reaching about $200 billion. However, the shares of Caterpillar Inc. (Ticker: CAT) were down nearly 3% to about $423 the morning after the company's SEC filing.

In response to the tariffs, Caterpillar Inc. has implemented measures such as cutting short-term discretionary spending, seeking multiple suppliers, and working to certify other products to be compliant with the USMCA trade agreement.

It's important to note that the tariffs enacted by the Trump administration are reciprocal measures on products from dozens of countries. Nearly half of all companies, according to a survey by Endeavor Business Intelligence, are seeing their operating costs rise by at least 10% due to the tariff push. Ford Motor Co. has increased its 2025 tariff-related cost estimate by $500 million, bringing it to $2 billion.

As of the information provided, no further steps have been taken by Caterpillar Inc. in response to the tariffs. The range for full-year tariff-related costs is now between $1.5 billion and $1.8 billion, an increase from the previous estimate. The midpoint of the new tariff-related cost range for the full year is $250 million higher than the previous forecast.

Cat chief execs predict additional $100 million in Q3 expenses due to fresh tariffs