Regal Rexnord (RRX) said the "gross, unmitigated annualized cost impact from tariffs" will likely be about $60 million while adding it has "well-developed" plans to "fully" counter the impacts of import duties.
The company said early Wednesday that the estimated impact is from current and potential US tariffs on imports from Canada, China, and Mexico. It includes import duties slapped on steel and aluminum. The estimate "reflects" that a vast majority of goods imported from Canada and Mexico" comply with the United States-Mexico-Canada Agreement and are currently exempt from tariffs.
Regal said tariffs currently in place are expected to have a "negligible" impact on Q1 results. The company expects to remain neutral on a margin basis by the end of 2025 under the current tariff regime or by H1 of 2026 under a scenario where USMCA exclusions are withdrawn.
The company has "well-developed plans in place intended to fully mitigate the impacts of tariffs in the year - at current levels and under a scenario where there is no USMCA exclusion," it said. "These mitigation plans may include supply chain realignments, production relocations, and productivity and pricing actions, and should enable the Company to be at least price/cost neutral on a dollar basis."
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