Caterpillar raises 2025 tariff impact estimate to $1.8 billion

Caterpillar Inc. (NYSE: CAT) revised its estimate for the financial impact of tariffs, expecting the net effect from incremental tariffs introduced in 2025 to reach $1.5 billion to $1.8 billion for the full year.

The company said additional tariff clarifications and new tariffs announced since its second quarter earnings release on August 5 will affect its financial results for the third quarter and remainder of 2025. For the third quarter alone, Caterpillar expects the net tariff impact to be between $500 million and $600 million.

The machinery manufacturer said it continues to take initial mitigating actions to reduce the impact, though trade and tariff negotiations remain fluid. The revised tariff estimates are based on changes and clarifications expected to be in place as of August 31, 2025.

Including the net impact from incremental tariffs, Caterpillar now expects its full year adjusted operating profit margin to be near the bottom of its target margin range. The company said the revised tariff impact estimate does not affect its sales and revenue outlook provided during its second quarter earnings call.

Caterpillar plans to provide further updates during its third-quarter earnings announcement and conference call scheduled for October 29, 2025.

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