Stanley Black & Decker (SWK) was already facing multiple tariff threats as President Donald Trump slaps levies on imports from Mexico, Canada and China; now the European Union could be a problem as it looks to target tools among a range of new countermeasures.
The EU is responding to the U.S. decision to impose blanket 25% tariffs on imports of steel and aluminum with a series of countermeasures that will target €26 billion in U.S. goods starting in April. The White House had confirmed the duties late Tuesday but said that Trump no longer planned to raise tariffs on the metals from Canada to 50%.
EU Responds to Tariffs
The U.S. tariffs will affect a total of €26 billion of EU exports, which corresponds to approximately 5% of total EU goods exports to the U.S., the European Commission, the EU’s executive branch, said.
In response it will reinstate tariffs on U.S. steel and aluminum and extend tariffs to a range of industrial and agricultural products. These include a huge range of items, from textiles and plastics to power tools and vacuum cleaners. Agricultural products include poultry, beef, certain seafood, nuts, eggs, dairy, sugar and vegetables.
SWK Signalled Hit
De Walt and Stanley maker SWK had already signalled a hit from China tariffs. In early February, it flagged a potential unmitigated $100 million negative impact from Trump’s 10% tariff on China, with the company importing about $1 billion of goods a year from the country, in addition to about $1.3 billion from Mexico. Trump then added an additional 10% on China in early March.
The company, which struggled with soft automotive sales in 2024, has taken proactive measures to plan for tariffs, looking to shift production away from China for instance.
In its Fiscal Q4 earnings call in February, CEO Donald Allan said, “We believe we can mitigate tariffs with supply chain repositioning and price,” indicating that mitigation would reduce the impact from the Chinese tariffs to $10-20 million.
However, it’s unclear right now what the impact could be from both blanket steel and aluminum tariffs imposed by the U.S. and the additional EU retaliatory tariffs on finished goods. SWK uses both metals heavily in the manufacturer of its products, which will mean higher input costs. And in 2024, 16% of the company’s revenues were generated in Europe, worth about $3 billion, with 5% in Canada and 62% in its domestic U.S. market.
In its latest annual report the company noted it is subject to risks associated with the global trade environment, including customs and trade regulations, tariffs, quotas, import taxes and international trade agreements. It also noted as part of a risk factors outline that certain competitors “may be better positioned … to withstand or react to these kinds of
changes and other restrictions on global trade.”
Shares of SWK fell more than 4% ahead of the tariff announcement.
Is SWK a Good Stock to Buy?
On Wall Street, analysts have a Moderate Buy consensus rating on SWK stock, based on four Buys, four Holds and one Sell. The average SWK price target of $102.00 implies about 23% upside.
