A broad set of tariffs first imposed in 2025 and carried into 2026 is tightening margins, complicating sourcing, and reshaping pricing strategies for U.S. wholesale distributors, particularly in metal products, building materials, technology components, and automotive parts.
Tariffs covering imported steel, aluminum, wood products, automotive parts, and electronics inputs have raised landed costs across core product categories, forcing distributors to rethink how they buy, price and position inventory. The levies, enacted under presidential trade authority and national-security provisions, have compounded broader inflationary pressures and increased price sensitivity among industrial buyers.
The effects are now showing clearly in earnings calls.
At Fastenal Co., executives said tariffs are influencing both pricing dynamics and supplier negotiations across its vast product assortment. CEO Daniel Florness said tariff-related pricing has been easier to manage in the company’s core fastener business than in other product categories where branded suppliers exert more control over pricing.
“With fasteners, we are sourcing from the ultimate manufacturers, and it gives us a tremendous amount of visibility,” Florness said. “In the non-fasteners, there’s a big piece where we don’t have that same visibility.”
That distinction matters because fasteners — nuts, bolts, screws, and related hardware — are a category where Fastenal has direct sourcing leverage and clearer insight into underlying costs. In branded safety supplies, tools and other non-fastener lines, executives said supplier price increases tied to tariffs are harder to validate.
To manage those pressures, Florness said Fastenal is pushing back on supplier increases it views as unsupported, having direct conversations with customers and encouraging product substitution when pricing cannot be justified.
“We’re controlling what we can control — pricing, costs, capital allocation — to deliver more profitable growth,” said Holden Lewis Watts, Fastenal’s executive vice president of sales, during the company’s recent earnings discussion.
Fastenal’s fourth-quarter results fell short of analysts’ revenue expectations, with executives and analysts pointing to tariff-inflated costs as a factor that dampened demand from resellers and pressured margins. The Winona, Minnesota-based distributor, reported quarterly sales of about $2.03 billion as customers reacted to higher prices in some categories.
At MSC Industrial Supply Co., executives also cited tariff uncertainty as part of a challenging backdrop marked by soft industrial demand and cautious customer spending. MSC’s recent quarterly results showed year-over-year sales declines, and management commentary highlighted customer hesitancy tied to tariff uncertainty, inflation concerns and elevated interest rates.
MSC leaders described efforts to accelerate purchases of high-turn inventory ahead of tariff changes, adjust pricing where appropriate and lean on a broad portfolio of U.S.-sourced products to offset exposure to higher-duty imports. The company also emphasized continued investment in digital commerce tools designed to improve pricing flexibility and product discovery as customers navigate a volatile cost environment.
Tariff pressures are not limited to industrial distribution. Amazon.com Inc. CEO Andy Jassy said this week that U.S. tariffs are “starting to creep into… prices” as inventory stockpiled ahead of tariff actions has been depleted.
Jassy said some third-party sellers on Amazon’s marketplace are now passing higher import costs on to consumers, while others are absorbing them to maintain demand. He noted that thin retail margins leave limited room to absorb sustained cost increases and that shoppers are increasingly trading down to lower-priced brands.
For distributors, consumer price sensitivity is flowing upstream into B2B markets, where contractors, manufacturers and maintenance buyers are scrutinizing purchases and delaying orders when prices rise sharply.
The tariff structure itself is broad. Section 232 duties on steel and aluminum were raised in 2025 and expanded to include derivative products used in construction, fabrication, and industrial supply. Additional tariffs apply to copper components, wood products such as lumber and cabinets, automotive parts and a range of electronics inputs used in telecommunications and industrial equipment.
Building products distributors are contending with new tariffs on wood and engineered wood goods that affect flooring, cabinetry, and furniture components. Electronics and automotive parts distributors are managing duties that in some cases exceed 25 percent, complicating pricing for technology and vehicle maintenance segments.
Legal and political uncertainty is adding to the strain. More than 1,000 companies have challenged the tariff framework in federal court, and a U.S. Supreme Court ruling expected this year could alter how certain duties are applied. At the same time, proposals in Congress seek to limit future unilateral tariff actions, creating questions about how trade policy may evolve.
As a result, distributors are investing in tariff tracking tools, diversifying sourcing away from high-duty trade lanes and increasing communication with both suppliers and customers. Many describe tariffs as a daily operational constraint that now influences procurement, pricing, and contract negotiations.
Economists expect tariffs to remain a significant factor in supply-chain costs through 2026. For wholesale distributors, the challenge is balancing cost recovery with customer demand in markets already shaped by higher labor, freight, and material costs.
Executives say the ability to react quickly to tariff changes, validate supplier pricing and offer alternatives to customers is becoming a competitive advantage in an environment where trade policy has become one of the most unpredictable forces shaping distribution economics.
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