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Main Points

Caterpillar's stock price dropped on Friday following President Trump's announcement of broad tariffs on goods from various countries.

In response to Trump's tariffs, China imposed a 34% tax on U.S. products starting in April.

The company operates globally and is considered an indicator for economic growth and decline.

The shares of Caterpillar (CAT) declined on Friday due to concerns about the potential impact of retaliatory tariffs on its international construction operations.

CAT shares plummeted by over 5% recently after China's finance ministry revealed it would levy a 34% import tax on U.S. goods starting April 10. This matches the tariff imposed on Chinese goods announced by the Trump administration late Wednesday. Caterpillar's stock price decrease on Friday adds to the losses witnessed on Thursday, with shares down by 13% in the last two sessions.

As a company with manufacturing and distribution facilities worldwide, including in China, Caterpillar is commonly viewed as an important stock for gauging economic expansion or contraction trends, both domestically and globally. Shares of Caterpillar have dipped by almost 20% since the beginning of 2025.

In the beginning of the year, Caterpillar saw a decrease in revenue compared to the previous year and fell short of Wall Street's forecasts for the fourth fiscal quarter, indicating a slowdown in its construction sector.