The construction and mining equipment giant is expecting higher trade-related costs in the second half of the year. Meanwhile, AI data center demand is driving growth in the power generation business.

Caterpillar warned on Tuesday U.S. tariffs would pose significant challenges in the second half of the year and cost the construction equipment maker up to $1.5 billion in 2025.

Tariffs are having a bigger impact on Irving-based Caterpillar Inc.’s margins even as demand for the company’s iconic yellow diggers and bulldozers