“Based on tariff rates in effect as of today, our forecast for the pretax impact of tariffs in fiscal 2025 is now adjusted to nearly $600 million.”

In context

“o drive material costs out of the business, and we're seeing that favorability again this quarter. Chris, you said this earlier, but I think it's notable to repeat that our ag and turf business remained production costs favorable in the quarter despite the impact of tariffs and inclusive of that impact. Christopher Seibert: Thanks for all your comments here. Can you please also unpack the impact on margins in the quarter? Josh Beal: Yes, absolutely. And there's really 2 significant call-outs here. One is tariffs and the other is price. Starting with tariffs, that's obviously additional costs this year, which is contributing to the higher decremental margins. Tariff costs in the quarter were approximately $200 million, which brings us to roughly $300 million in tariff expense year-to-date. Based on tariff rates in effect as of today, our forecast for the pretax impact of tariffs in fiscal 2025 is now adjusted to nearly $600 million. The primary drivers for the change from last quarter are increased tariff rates on Europe, India and steel and aluminum. The other notable change this quarter was price realization. As you mentioned earlier, Chris, we saw a negative price in the quarter in both Construction and forestry and large ag. Let's start with Construction and Forestry. The price actions that we took in the quarter were reflective of a need to be aggressive on price in the North American earthmoving market where competitive pressure has been tougher. Importantly, what we saw was a favorable market response to these actions as our retail settlements were up mid-single digits year-over-year in the third quarter. On top of that, we've seen a pickup in our order book, where on a percentage basis, we're up mid-teens yea”