Above: Nucor’s CEO says the material decrease in the import levels on sheet alone are 4 million tons of consumption that the domestic supply chain gets to now contribute.
March, 2026- The Institute for Supply Management’s recent Manufacturing Purchasing Managers Index (PMI) Report included some frank comments by survey respondents.
“2025 revenue was down 17 percent due to tariffs,” said one manufacturer surveyed by the ISM.
“We had some success holding the line on costs; however, real consumer spending is down, and tariffs are ultimately to blame,” said a manufacturer of chemical products.
“Morale is very low across manufacturing in general. Component costs are increasing with folks citing tariffs and other price increases,” stated a manufacturer in the electrical equipment and appliance sector.
“For every positive comment about new orders, 1.3 comments indicated concern about near-term demand, driven by tariff costs and other uncertainties,” said Susan Spence, who chairs ISM’s Manufacturing Business Survey Committee. “The Prices Index reading continues to be driven by increases in steel and aluminum prices that impact the entire value chain, as well as tariffs applied to many imported goods.
“Trade frictions continue to weigh on demand,” she continued. “Many [survey respondents] still report softer international orders tied to tariffs and ongoing uncertainty around U.S. economic policy, with a ratio of 1.5 negative comments for every positive one.”
‘A MEANINGFUL NUMBER’
Leon Topalian, president and CEO of Nucor Corp., told shareholders Jan. 27 that “vigorous enforcement of our trade remedy laws and the full reinstatement of the Section 232 steel tariffs without exemptions last year have helped drive down steel imports. Foreign import share of the U.S. finished steel market has dropped from approximately 25 percent last [January] to 16 percent in October and 14 percent in November.” He expects the full impact of the Section 232 tariffs and recent trade determinations to reduce steel imports this year, too.
“The material decrease in the import levels on sheet alone are 4 million tons of consumption that the domestic supply chain gets to now contribute,” Topalian said, calling that “a meaningful number. The separation today in the U.S. from the world market is for good reason,” Topalian said. “Outside of just steel, you’re seeing growth: reshoring, investments.” He said many foreign companies now “want to come and build here.”
Alcoa runs two of the four smelters that operate inside the United States.
PASSING COSTS ALONG
Alcoa Corp. experienced “increased tariff costs based on higher LME and higher production costs,” Molly Beerman, CFO, told shareholders during the company’s fourthquarter earnings call Jan. 22. CEO William Oplinger said during the same call that LME aluminum prices increased 8 percent sequentially in the fourth quarter and recently reached $3,200 per metric ton.
Alcoa is positioned to benefit from globally constrained supply and by selling into highpremium regions. The Midwest premium rose sharply during fourth quarter, “providing a significant benefit to Alcoa given our U.S. production. The higher Midwest premium fully offset tariff costs on shipments from Canada to the U.S.”
“As a company, we’re probably spending over $1 billion in gross tariff expense on an annual basis, but the Midwest premium is high enough to cover that. So the tariffs in their entirety are getting passed on to customers at this point,” he said.
“On 2026 demand, we anticipate continued growth globally, including in North America. Alcoa’s overall order book remains strong for value-added product sales. Billet demand is currently flat, but showing early signs of improvement driven by reshoring. Foundry demand, however, remains challenged as tariffs pressure automotive OEM profitability and supply chains.”
Oplinger noted that of the four smelters still operating in the U.S., Alcoa owns two. He said that Alcoa’s Massena, New York, plant is “running flat out,” and that the company just signed a new power contract for Massena that spans 10 years, with an option for a further 10 years.
Carmaker GM is onshoring more vehicle production in the United States.
ONSHORING
General Motors is meeting the tariff crunch head on with a continued commitment to making vehicles in the United States, according to CEO Mary Barra. Speaking Jan. 27 in GM’s earnings call, she said, “We proactively managed our net tariff exposure, reducing it well below our initial expectations thanks [in part] to policy actions that support companies like GM that have substantial and growing commitments to American manufacturing.”
The U.S. regulatory and policy environment is “increasingly aligned with customer demand,” which “allows us to onshore more production to help meet strong demand for our ICE vehicles.
“Our annual production in the U.S. is expected to rise to an industry-leading 2 million units after we begin production of the Chevrolet Equinox in Kansas, bring the Chevrolet Blazer to Tennessee, add incremental capacity for the Cadillac Escalade and launch our nextgeneration full-size pickups at Orion Assembly in Michigan,” Barra said.
CFO Paul Jacobson told investors that GM expects to invest $5 billion during 2026 and 2027 to “expand U.S. manufacturing capacity for some of the highest demand vehicles and further reduce our tariff exposure.”
The company’s tariff costs for fiscal 2025 totaled $3.1 billion but “we were able to offset more than 40 percent of these gross tariff costs through a combination of go-to-market actions footprint adjustments and cost reduction initiatives.”
For 2026, GM anticipates gross tariff costs in the $3 billion to $4 billion range. “We believe there are additional actions that can help mitigate our tariff impact, including the onshoring of vehicle production to the U.S.,” Jacobson said.
Boeing ships airplanes around the world and watches global trade negotiations closely.
AVOIDING TIT-FOR-TAT
Boeing Co. President and CEO Kelly Ortberg acknowledged to investors during a Jan. 27 earnings call that the trade risks and tradeoffs for a company operating globally are “super dynamic.”
Policies “could change tomorrow but at least the U.S. fully understands the importance of commercial aerospace to the domestic economy.” The administration “has been very supportive. We worked through what initially looked like some pretty hairy tariff environments to pretty good outcomes.
“Last year, we were shut down for a little while [with] deliveries into China. That got resolved; we got the deliveries done. We do have about the same number of deliveries this year into China as we had last year.,” Ortberg said. “We also have a lot of deliveries into Europe. So we are watching how that negotiation plays out to assure that we don’t get in a tit-for-tat environment on commercial airplanes.”
PACCAR adjusts to tariffs on components by, for example, keeping Canadian output in Canada.
LOCAL FOR LOCAL
PACCAR, builder of light-, medium- and heavy-duty trucks and diesel engines, reported Jan. 27 that it has only had a few weeks to adjust to U.S.-imposed 25 percent tariffs on imported Class 3-8 trucks, engines, transmissions and chassis.
CEO Preston Feight said the Section 232 truck tariff policy that became effective Nov. 1 “provides advantages to PACCAR, which produces trucks in the United States, Canada, and Mexico for each local market.”
The company responded quickly. “Our manufacturing teams in the fourth quarter did a really great job of being able to convert the factories over to build trucks local for local. For example, Chillicothe [Ohio] and Denton [Texas] are now building the medium-duty trucks. In Canada, we are able to build all of the product lines principally for Canada. The team in Canada is flexing into a wide variety of model mixes built in Ste.-Thérèse, Québec.”
Fastenal Corp. says its net price-cost impact after tariffs was nearly neutral during fourth quarter 2025.
DATA ANALYTICS
Fastenal Corp., a distributor of industrial and construction supplies, including fasteners, also discussed the trade environment during its Jan. 20 earnings call.
“Related to tariffs and pricing, our net price-cost impact was nearly neutral for the quarter,” CFO Max Tunnicliff told shareholders. “Our teams actively managed tariffs and input costs to defend profitability, using a combination of data analytics and sourcing strategies.”
CEO Dan Florness said that Fastenal’s “covenant with our customer is we provide them a great resilient supply chain, great products, visibility to price, to cost in that supply chain. When there are things that drive costs up, our obligation to our customer is to let them know what we’re seeing in their pipeline to help them plan for the future. With fasteners,” he said, “we are sourcing from the ultimate manufacturers, and it gives us a tremendous amount of visibility to manage [cost] that with our customer.”
NEXT UP: USMCA
Nucor is among the countless manufacturers that are vitally interested in the upcoming review of the United States-Mexico-Canada Agreement (USMCA).
“The formal USMCA review, beginning in July, offers the opportunity to drive additional steel demand in North America, crack down on efforts to transship steel through Mexico and Canada, and address steel subsidies provided by the Canadian government,” President and CEO Leon Topalian told investors.
“We must also continue to implement commonsense policies like Buy America, that incentivize the use of American-made steel for infrastructure, shipbuilding, and defense.
“What we have seen out of Commerce and U.S. Trade Representative is a very supportive trade environment that’s pro-America and pro-U.S. manufacturing,” he continued. “So what would we like to see ultimately? Man, strengthen the rules of origin [and] continue the enforcement of the 232 policies that are already on the books. That’s why we’ve been such staunch supporters of the Level the Playing Field Act 2.0 and we still think that needs to pass.”
Sitting in the U.S. Senate’s Finance Committee, the bill seeks “to amend the Tariff Act of 1930 to improve the administration of antidumping and countervailing duty laws, and for other purposes.”
