The OEM, seen as an economic bellwether for the construction industry, has been affected not only indirectly by its customers’ worries over a U.S.-China trade war, but also directly by an increase in tariffs. In July, Caterpillar said it paid $70 million in tariffs in the second quarter of 2019. The tariffs, along with a loss of incentives in Brazil and warranty expenses, led to a $328 million increase in manufacturing costs during the quarter.