A prominent manufacturer of tools and outdoor equipment says it is preparing for looming tariff hikes under the next presidential administration to significantly dent its income.

Stanley Black & Decker indicated in a filing with the U.S. Securities and Exchange Commission that proposed increases in tariffs under the forthcoming Trump administration could affect its pre-tax operating income by some $200 million on an annual basis.

That figure would equate to 12.5% of the company’s projected 2025 operating income of $1.6 billion, according to a compilation of estimates cited by the Wall Street Journal.

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The company’s estimate did not account for any moves that it could make to lessen the impact of new or higher tariffs, including price hikes or adjustments to its supply chain. The company wrote in the filing that it is “preparing to discuss potential price increases with its customers,” the Journal noted.

Stanley Black and Decker also indicated that it plans to continue “direct engagement with policymakers,” but the president-elect made steep new tariffs a key focus during the campaign. Stanley Black and Decker President and CEO Donald Allan told analysts on a call last month that the company had been preparing for the possibility of higher tariffs for months, but the filing noted that any supply chain changes would likely take one to two years to make an impact.

The company, whose other brands include Craftsman, DeWalt and Cub Cadet, could shift production currently done in China to other Asian countries or Mexico, although those nations, too, could be impacted by tariffs. Moving its manufacturing to the U.S., Allan said, would not be cost-effective, and he raised questions about the availability of labor in the U.S. in the first place.

Economists have broadly expressed concerns about Trump’s tariff proposals; a September analysis by the Peterson Institute for International Economics found that they would dent U.S. economic activity and lead to higher inflation in the coming years.

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