How to Stay Ahead of Tariffs and Trade Changes that Could Affect Your Industrial Business Part 2

How Metal Fabricators Can Navigate Market Volatility

Adapting to political cycles is nothing new for manufacturers; however, this year, the industry needs to be more nimble than usual. New tariffs and trade changes are rolling out, including a 25% tariff on steel and aluminum.

Business planning for manufacturing is complex, given the long-term effects of these decisions take years to manifest. So, what can fabricators and others in the manufacturing industry do while we wait for the dust to settle?

We sat down with the Fabricators and Manufacturers Association’s Tim Heston, senior editor at The Fabricator, to discuss the industry’s impact. He offered actionable pricing, supply chain management, and marketing strategies, plus guidance on staying agile and driving your business forward.

Market Impacts on Fabricators, OEMs, and Logistics

In an earlier article, we laid out the tariffs and market changes facing the industry. Here’s how those changes directly affect fabrication.

Fabricators:

A significant portion of metal fabrication is contract. Custom or contract metal fabricators can communicate with customers to make moves and follow their needs. Many fab shops have material price changes built into their contracts, and some shops are seeing material price hikes across the board. Still, some say margins could shrink (or already are shrinking) because they simply can’t pass on all raw material price increases to OEM customers. At the same time, some fabricators are well-positioned to take on new work as customers consider their reshoring options. Costs and complications are rising—but so are opportunities for new business.

OEMS:

They are considering a localized supply chain, but there are repercussions. Lifting an entire supply chain is a tall order, especially if things change in four years. Some are bringing more fabrication in-house, then selling that capacity to others.

Logistics:

There’s so much capital on the line. The industry sells products manufactured next year, so planning with this much market volatility makes this tricky.

Thinking About the Supply Chain

While we don’t know what tariffs will stick, what we do know is sitting back and waiting is a poor strategy. Fabricators must take a proactive, solution-driven approach, positioning themselves further upstream to support customers. Rather than waiting for shifts to dictate strategy, now is the time to anticipate needs and offer value beyond production. The capability to do this may already exist within your operations—it’s just a matter of leveraging it.

It’s time to ask yourself:

• What’s our basic supply chain strategy?
• What are our backups?
• How can we stay competitive in terms of pricing strategies?
• How can we move on a dime if we need to?

It’s also time to look at your revenue diversification to ensure you aren’t limited to one area, especially if that area takes a hit. Think of being the Swiss Army knife. What do you have available or can invest in quickly to offer the right functionality?

Business Strategies for Agility

Automation isn’t optional to stay competitive globally—it’s essential. However, true transformation requires more than just implementing technology; it demands reshaping entire business models.

With extensive upstream automation, the industry is restructuring to keep pace, handling 80% of production with systems that must run continuously. A few progressive structural fabricators now have highly automated “parts supermarkets” that cut, drill, and weld beams and plates; then send those components to less automated facilities that assemble the work and ship it to job sites. Advanced automation in cutting, bending, and certain welding tasks allows these structural fabricators to scale without adding labor costs.

Marketing: Your Competitive Advantage

The foundation of fabricators’ business models remains strong, but how you communicate those services defines the difference between thriving and merely surviving. Communicate your willingness beyond solutions:

• Open up on design for manufacturability
• Share how you automate or will automate
• Specify how you reduce costs via processes, metal purchasing, or material supply chain options

Transparency is crucial in a market dealing with an expertise gap. As experienced professionals retire, thought leadership becomes a competitive advantage. Providing valuable insights and solutions makes you an indispensable resource.

Share the implications of design unitization—that is, redesigning a multi-component assembly into one with one or just a handful of parts. Having fewer parts simplifies not only fabrication but also the bill of materials and all the paperwork that goes with it.

Heston reminds businesses bland, cookie-butter messaging isn’t going to work:

“Websites or other messaging vehicles that trumpet ‘we’re your No. 1 supplier’isn’t going to cut it. The message is, ‘we can really help you rethink and reshape your supply chain.’”

In a shifting industry, fabricators must go beyond delivering parts—clear communication and thought leadership set you apart. By consistently marketing your expertise, you position yourself as a problem-solver—an essential part of your strategy.