ITW · 10-Q · 2026Q2 · Full report

Trade Policy and Tariffs

ILLINOIS TOOL WORKS INC · 2026-08-06 · Importance 49 · Surprise 68 · In source text

U.S. tariff policy changed materially during 2026 after the Supreme Court invalidated many tariffs imposed under the International Emergency Economic Powers Act on February 20, 2026. A temporary 10% global tariff under the Trade Act expired in July 2026 and was replaced by similar tariffs on numerous countries under other Trade Act provisions. ITW expects its localized manufacturing footprint and price increases to offset tariff-related costs, but acknowledges that tariff uncertainty could reduce customer demand and continues to assess mitigation actions.

Key facts

Tariffs on goods from many countries became effective on August 1, 2025. source
On February 20, 2026, the U.S. Supreme Court invalidated many of the tariffs imposed under the International Emergency Economic Powers Act resulting in the termination of many tariffs imposed in 2025. source
Following that decision, a new temporary 10 percent global tariff was imposed under the Trade Act, which expired in July 2026. source
The Company has four immaterial Russian subsidiaries with net assets of approximately $42 million as of June 30, 2026. source
The revenue for these four Russian subsidiaries for the three and six months ended June 30, 2026 was approximately $8 million and $14 million, respectively. source

Impact estimates

metric	direction	stage	expected	basis
operating_income	negative	realized	—	Tariffs on goods from many countries became effective on August 1, 2025.
operating_income	positive	realized	—	On February 20, 2026, the U.S. Supreme Court invalidated many of the tariffs imposed under the International Emergency Economic Powers Act…
operating_income	negative	realized	—	Following that decision, a new temporary 10 percent global tariff was imposed under the Trade Act, which expired in July 2026.
operating_income	positive	realized	—	Following that decision, a new temporary 10 percent global tariff was imposed under the Trade Act, which expired in July 2026.