(Reuters) -Caterpillar's shares lost as much as 3% in premarket trading on Friday, a day after the heavy-equipment maker forecast higher tariff-related expenses for 2025, as companies scramble to assess the impact of shifting U.S. trade policy.

Industrial machinery makers are facing higher costs and sluggish demand from U.S. President Donald Trump's tariffs, coupled with high interest rates.

The company now expects a tariff hit of $1.5 billion to $1.8 billion this year, up from its prior forecast of up to $1.5 billion.

"Our concern remains that CAT and the construction equipment group have thus far exhibited little to no ability to pass through tariffs," said Angel Castillo, analyst at Morgan Stanley.

Global companies that have reported between July 16 and August 20 have forecast a combined annual financial hit of $14.3 billion to $15.9 billion and nearly $15 billion for 2026, Reuters tariff tracker shows.

However, Brian Langenberg, analyst at Langenberg LLC, was relatively optimistic. "Annoying, but not a killer. Demand is demand, and if someone needs a bulldozer they will buy it and absorb the tariffs," he said.

Caterpillar's shares trade at about 21.34 times their forward profit estimates, above the industry median of 18.46. They have risen 20.9% so far this year.