Tariff headwinds and mitigation strategies

“We are a global manufacturer but our largest manufacturing presence is in the United States, and we are a net exporter outside of the U.S., and that positions us pretty well versus many other companies out there.”

“Having said that, as you say, we do tend to try to produce in region for region, but yes, some products and components particularly move around. But as you can imagine, it’s something we keep a close eye on and we’ll deal with it.”

“However, the potential impact of tariffs has increased uncertainty and the situation remains fluid.”

“Caterpillar is a global company and we have manufacturing locations around the world. Our largest manufacturing base is in the United States, where we employ over 50,000 full-time employees. And we continue to be a net exporter.”

“Additionally, for the second quarter, the tariffs which have been announced and implemented this year are currently estimated to be a cost headwind of about $250 million to $350 million.”

“Due to the timing of recent rate changes, the headwind is likely to be larger in the fourth quarter when compared to the third quarter.”

“We've built a global supply chain that's unique to us. It works for us. It's been developed over a significant amount of time, and it allows us -- the strategy behind that supply chain allows us to increase our footprint here in the U.S.”

“Since 2016, our exports, in fact, have grown 75%. And over that same time period, we've been able to increase our hourly production workforce by around 29%.”

“We're working on certification of USMCA compliant products.”

“I think it's way too uncertain. And as Andrew just mentioned, things are still moving around to call anything permanent, right? So we're not thinking in those terms right now.”

“the net impact of tariffs was around the top end of our estimated range for the quarter and is likely to be a more significant headwind to profitability in the second half of 2025.”

“We will remain flexible and we intend to implement longer-term actions once there is sufficient certainty. We are considering all options to further reduce the impact of tariffs going forward.”

“the incremental tariffs announced in 2025 and expected to be in place by August 7 will be a headwind to profitability during the remainder of the year.”

“With the decrease in certain tariff rates during the quarter, we lifted some holds on inbound shipments, such that the high inbound shipment volumes more than offset the lower tariff rates.”

“we expect the net impact from incremental tariffs for 2025 will be around $1.3 billion to $1.5 billion, net of some mitigating actions and cost controls.”

“As we know, trade deals are still being negotiated, and we're watching that very closely, and we have a lot of scenarios at play.”

“Tariff and trade negotiations remain fluid. Our team is continuously evaluating options to further reduce the impact of tariffs going forward, and we fully intend to implement longer-term actions once there is sufficient certainty.”

“Tariffs as well are not evenly spread across there. So we're a very heavy North America footprint in E&T.”

“Tariffs will still obviously be a headwind as we move into 2026.”

“If we're going to make longer-term adjustments to really offset tariffs in that way, it will require investments to do that, and they will take time because we'll have to certify components.”

“We're a global business with a very complicated supply chain. We are heavily U.S.-based. It's our largest footprint here. We have over 50,000 employees, 65 locations in 25 states. We're a net exporter. We've increased exports 75% over the last 9 to 10 years.”

“We've got a new administration in Washington. There's lots of conversations floating around tariffs. We'll see as the year goes by, both progress and traction of some of the initiatives we have internally plus what happens in the macro and we'll update investors accordingly.”

“We import in domestic and export customers in China. I think we do have some opportunities to shift around our network to bring product into China from other regions that don't have the same sort of tariff effect.”

“We're not pausing any orders or any shipments right now. We have 90 days of inventory, so which will bleed through by the end of June, and then you'll start seeing the impact of the tariff on the imports after that.”

“As we have mentioned before, we import $1.6 billion into the US and export $4.1 billion from the US. China is approximately 10% of the imports, and slightly more on exports for a total trade flow of approximately $600 million between the US and China.”

“Some of which are no regret moves regardless of where trade policies eventually settle.”

“The team has responded quickly and is working on a number of mitigation plans including cost and productivity, initiatives, optimizing production and logistics, including leveraging our US footprint and selective price increases where feasible.”

“We're adjusting our trade flows, logistics flows, leveraging more bonded facilities, free trade zones, a little bit more point-to-point shipments on our logistics you know, that we might have done before in terms of hub and spoke.”

“We do see some of our competitors, some things have moved on the consumer side outside of the US, primarily China sourced, You know, we walked away from some of that business. Some of that might be private label today.”

“Tariffs are going to be a headwind this year, but we thought it would be prudent to hold the impact outside of our full-year guidance while I digest the new policies and fully develop and qualify mitigation plans.”

“We continue to advance our portfolio shaping efforts with one small divestiture recently signed and others progressing more slowly in view of trade policy uncertainty.”

“Having a robust baseline on underutilized capacity will help us adjust our sourcing strategy more readily to the changing trade landscape.”

“With the significant footprint we have in the US, and the flexibility of our global network, we're identifying a number of ideas to adjust product sourcing and logistics flows to mitigate at least a part of the impact.”

“These flows at the current tariff rates of 125% imports into China from US and 145% from China into US will equate to approximately $675 million of potential annualized tariff impact after anticipated exemptions.”

“In addition, tariffs on products not qualified under USMCA along with aluminum steel, and other reciprocal actions had an approximately $175 million impact a total annualized impact of approximately $850 million before any mitigation actions.”

“all of the U.S. retailers are looking very carefully at where their source of supply is, if it's coming from non-U.S. markets, it's important. Obviously, the tariff impact makes them a little less economic and makes us a little more attractive.”

“we're offsetting $0.20 of gross tariff with both cost and sourcing changes, which is about half of the offset and the other half is coming through price.”

“we are covering our inflation typically with a little bit more because of the tariff impacts coming through. So doing pretty well this year on pricing, again, mostly on the industrial side.”

“Clearly, our regionalization efforts over the years put us in a strong position to drive these actions with speed effectiveness.”

“We are mitigating these impacts through targeted surcharges and pricing actions, production reconfiguration using our global manufacturing footprint and additional supply chain regionalization initiatives.”

“These mitigation actions will completely offset the tariff headwinds in the fiscal year with carryover benefit to completely cover the full annualized impact we will encounter in 2026 under these assumptions.”

“We did not see any of that across our businesses. As you know, we're not a big stock inventory business within across the portfolio, but we have not seen any signs of pre buys, get ahead of tariffs or surcharges across the business.”

“Our long outstanding supply chain regionalization strategy and global footprint enable us to quickly respond to a variety of scenarios, including the recent tariffs.”

“From these, we have a gross exposure of $245 million in 2025, which we expect to fully mitigate.”

“We are watching closely for signs of tariff induced impacts to demand, but we have not seen any widespread indications.”

“On an annualized basis in 2024, Emerson imported $1.6 billion into the US, representing 19% of our annual cost of goods sold as raw materials and semi-finished products for our manufacturing plants and finished products to our distribution centers.”

“The gross incremental tariff impact on these imports driven by IEEPA, steel, aluminum and reciprocal tariffs amounts to $320 million on an annualized basis.”

“As you can see, most of our gross impact is driven by the 125% reciprocal tariff on imports from China, while the Mexico impact is significantly mitigated as 80% of our supply into the US from Mexico qualifies for USMCA exemptions.”

“Yeah. I mean, obviously, a tariff perspective, the positive news on China, Aipa tariffs there, fentanyl tariffs going from twenty to ten.”

“We are seeing relief to that number, but it's early to quantify how much. But it will be a net positive for the year versus what we've baked into the plan.”