Caterpillar shares slipped in premarket trading Friday after Bloomberg reported the European Union is preparing to target the U.S. heavy machines builder with tariffs.
The stock would later recover most of the losses to open Friday basically unchanged.
The E.U.’s move would be in implemented if President Donald Trump goes through with his plan to put tariffs on European automakers. Trump is threatening tariffs of up to 25 percent on imported European autos and auto parts. He would implement the tariffs by designating the imports a national security threat, according to a confidential U.S. Commerce Department report.
Beyond Caterpillar, the E.U. also has said it would not feel obliged to stick to its promise to buy more soybeans and liquefied gas from the United States.
Trump has long focused on crushing overseas automakers with heavy tariffs, as he reportedly sees the threat of further car duties as his best trade negotiating tactic.
The report also mentioned Xerox as another U.S. company the E.U. would target in response to auto tariffs. Xerox shares fell 1.9 percent in premarket trading from Thursday’s close of $31.33 a share.
– Reuters contributed to this report.