Mining and construction machinery maker Caterpillar (CAT) expects to see a greater impact from tariffs this year than it previously forecast.
In the company’s third quarter earnings presentation, Caterpillar noted a full-year net impact from tariffs of between $1.6 billion and $1.75 billion. Previously, the company guided for a tariff hit of $1.3 billion to $1.5 billion.
CEO Joseph Creed said the company is evaluating long-term options to manage the tariffs. But the constant shifting of duties is making it difficult to determine where to allocate investments, he explained.
“If we’re going to make longer-term adjustments to really offset tariffs in that way, it will require investments to do that, and that will take time,” Creed said on the company’s earnings call. “Because we’ll have to certify components, we have to buy tooling, we have to validate them, and test them.”
“For us to make those types of decisions, we really need to have a greater level of predictability and stability in the situation,” he continued. “It’s just right now, if we do something that requires investment, I don’t want to have to spend that money and then turn around and spend money to reverse it. So we’re trying to take a measured approach.”