FINANCIAL EDGE, RAILWAY AGE FEBRUARY 2026 ISSUE: We now bring you this regularly scheduled reprieve from the UP/NS merger banter.
The constantly shifting landscape of the application of tariffs across broad swathes of the U.S. economy puzzles consumers and manufacturers. Don’t want to hand over Greenland? How’s 10% grab you (and 200% on wine—ouch!!) Go to sleep, it’s a 10% tariff. Wake up, it’s a 20% tariff. Step out for lunch when the tariff is 25% and you return to a 60% tariff that is adjusted because some perceived slight occurred at the wrong time of day. Who says Presidents never get hungry?
The rail economy witnesses the volatility. In 2025 there were inventory purchases pulled forward followed by an intermodal loadings ramp-up. Then there was the sustained pause, and the post-pause rebound that never really materialized in the expected way following “Liberation Day.”
Not enough yet? Remember the “Taco Tuesday” trademark battle between Taco Bell, Taco John’s and New Jersey’s Gregory’s Restaurant & Bar? How long before the President decides that being blasted with both Tacos and TACO Thursday (after the recent Davos flim-flam on Greenland) gives reason for Presidential business interests to own that trademark? You heard it here first.
One thing that everyone seems to agree on is that tariffs create uncertainty. Even as of the writing of this column, the world waits for the Supreme Court to decide the legality of the 2025 tariffs. If determined illegal, then the question becomes, will it matter?
Expectations are that tariffs overturned by the Supreme Court will be re-started under the 1977 International Emergency Economic Powers Act as a license—a strategy promoted by the Administration.
Back to North American rail. Potential Section 232 tariffs, specifically addressing the use of foreign steel, are meeting resistance throughout the industry. The current group of tariffs were added in 2025 under Section 232 of the Trade Expansion Act of 1962. The Greenbrier Companies Senior Vice President External Affairs Jack Isselmann notes that “Section 232 is based on national security, not traditional trade law. The goal is to ensure the U.S. maintains a strong domestic steel and aluminum industry that can support defense, infrastructure, and critical manufacturing.” In August 2025, 400 items were added to the list of items to be subject to these tariffs—railcars not included.
In September 2025, a request was submitted by Union Tank Car Company requesting inclusion of tank railcars into the Section 232 steel derivatives tariff. Succinctly, these tariffs add a 50% surcharge to foreign-sourced steel used in tank railcar products (even the railcar head shields) directly to the U.S., and is tariff- and tax-free under USMCA. This would include tank railcars as well as the componentry. Even with a January 2026 deadline, no decision to include tank railcars has been made, yet. Oppositional letters have been filed by Trinity, Greenbrier, and the Rail Security Alliance. Other letters may have been filed.
At January’s Chicago MARS conference, The Greenbrier Companies President and CEO Lorie Tekorius said tariffs on tank railcars could increase costs up to 12.3% and cause up to 13,760 lost jobs. Greenbrier estimates tariff-related production decreases of between 6.5% and 12.3%. Speaking with Tekorius, she noted, “North American railcar builders are among the largest purchasers of U.S. melted and poured steel. Applying a 50% Section 232 tariff to the full value of a railcar erodes freight rail’s cost competitiveness, limits its ability to gain modal share and delivers no corresponding benefit to domestic steel suppliers while driving up railcar costs.”
The impact on railcar pricing, rail consumers, railcar manufacturers and owners and component suppliers could easily be economically punitive.
North American rail is fighting for many things. As Tekorius notes, it needs modal share, but also needs loadings growth (a part of modal share) and a competitive edge against trucking, railroad pricing, higher interest rates and inflation-causing tariffs. It needs a strategy to address economic policy indecisiveness. (Endorsing stablecoin, cryptocurrencies, isn’t it?) Steel, components (mostly made of steel) and labor are the three biggest pieces of a railcar’s cost.
Projections for 2026 new car builds range from a low of 20,000 to the high 20,000s. This is after fewer than 30,000 railcars were built in 2025. When railcar builders will be fighting for every railcar, many will question the upside of inviting the federal government to shine a spotlight on railcar builders. Who benefits and what the benefits might be will take time to unravel and understand.
However, the Jan. 23, 2026-announced 100% tariffs on Canada and Mexico might make this moot anyway. Oh, but wait—TACO!
