CAT · 10-Q · 2026Q3 · Full report
Trade Policy and Tariffs
CATERPILLAR INC · 2026-11-04 · Importance 71 · Surprise 60 · In source text
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) on goods imported into the United States were unauthorized. Caterpillar incurred approximately $1.0 billion of IEEPA tariff costs during 2025 and until U.S. Customs and Border Protection stopped collecting those tariffs in 2026. For the three and nine months ended September 30, 2026, the company recorded IEEPA tariff recoveries of $128 million and $520 million, respectively, for claims submitted and accepted through the CAPE system. Additional recovery claims for remaining amounts paid are uncertain and were not considered probable as of September 30, 2026; the company expects around $2.2 billion of full-year 2026 tariff costs excluding IEEPA recoveries.
Key facts
- Caterpillar expects full-year 2026 tariff costs of around $2.2 billion, excluding about $520 million of IEEPA tariff recoveries. source
- Caterpillar expects fourth-quarter 2026 tariff costs, excluding IEEPA tariff recoveries, of around $600 million, similar to third-quarter 2026 and roughly $200 million lower than fourth-quarter 2025. source
- Caterpillar recorded $520 million of IEEPA tariff recoveries for claims submitted and accepted through the CAPE system in the nine months ended September 30, 2026. source
- The U.S. Supreme Court ruled on February 20, 2026, that IEEPA tariffs on goods imported into the United States were unauthorized. source
- Caterpillar expects about 50% of fourth-quarter 2026 tariff costs in Construction Industries and 25% in each of Power & Energy and Resource Industries. source
- Caterpillar's 2026 outlook excludes any additional IEEPA tariff recoveries in fourth-quarter 2026. source
- As of September 30, 2026, additional IEEPA claim submissions for remaining amounts paid were uncertain and not deemed probable. source
- Caterpillar recorded $128 million of IEEPA tariff recoveries for claims submitted and accepted through the CAPE system in the three months ended September 30, 2026. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | committed | -9.0% | Caterpillar expects full-year 2026 tariff costs of around $2.2 billion, excluding about $520 million of IEEPA tariff recoveries. |
| operating_income | positive | realized | +2.5% | Caterpillar recorded $520 million of IEEPA tariff recoveries for claims submitted and accepted through the CAPE system in the nine months… |
| operating_income | negative | committed | — | Caterpillar expects about 50% of fourth-quarter 2026 tariff costs in Construction Industries and 25% in each of Power & Energy and… |
| cash | positive | contingent | — | As of September 30, 2026, additional IEEPA claim submissions for remaining amounts paid were uncertain and not deemed probable. |