Building the wall of worry

After a summer in which trade-related chaos generally subsided a bit, nerves are jangling again due to President Trump’s renewed emphasis on sectoral tariffs. If you’re worried about the demand picture—some decent news on that front: the PMI’s new orders index popped in August—adding cost-related jitters won’t make you feel better.

• Caterpillar leaders say new tariffs will add another $100M to Q3 costs

• Machinery imports face more disruptive tariff hikes

• Healthcare costs forecast to increase 9% in ’26
 

The tempation to wait

Dan Cakora of vendavo says it well in the first story linked below: “The temptation is to wait for inflation to stabilize, wait for the Fed to make its move and/or wait for customers to return in force. But companies that thrive won’t be those who sit on the sidelines.” That applies, too, to AI—and that’ll mean overcoming human and institutional biases.

• Practical moves to ease economic whiplash

• You bought AI and no one is using it. Now what?
 

“Everybody’s going to go from
standing around to being asked to run
very fast in very short order.”

Trucking analyst Ken Vieth sees a scenario unfolding—perhaps soon—
where the combination of capacity exiting and demand turning up
after this bout of uncertainty rapidly changes the tune of
the transportation market. Are you accounting
for the possibility of a similar turn in your industry?

• Unpacking trucking's ‘FUN’ future. Is this the new normal?
 

Changes are happening now

Incorporating a scenario featuring major changes in 2026 feels like a necessity. It sure looks like several parts of the U.S. and world economies are being overhauled by policy directly or by companies reacting swiftly to exogenous factors. Among them: U.S. steel, logistics and industrial property.

• Tariffs are reshaping the global steel market

• ‘AI is rewriting the rules of logistics’

• A shift to moving goods directly to inland hubs is helping keep real estate inventory and leasing activity subdued near several major ports

4-7 points

The gap by which supply-chain spending could top inflation in Q4

Are you on pace to keep your supply-chain cost increases to around 5%
this year? Then you’re likely winning: Analysts at Kearney say that
accounting for tariffs, sentiment and other risk factors means
supply-chain spending could be growing up to 7 percentage
points faster than headline inflation late this year.

• Kearney partner: “Inventories stockpiled ahead of 
tariff deadlines are now being depleted, forcing 
companies to restock at higher prices.”
 

What we’ll be watching

In a word: Laguna. The team at Morgan Stanley will host its 13th annual Laguna Conference south of Los Angeles next week, bringing together many prominent names from across the industrial, materials and infrastructure sectors, among others. It’ll be the last time before Q3 earnings season that we’ll hear a lot of executive teams discuss how they see the world and how they plan to respond. Lots to digest and lots to learn.

We’ll also be watching for the results of our survey on how employers are thinking about 2026 salary increases and hiring activity. If you have just three minutes, we’d love to hear from you, too.