A small saw company in Britt, Iowa, is running out of room. Allen Eden, 56, who owns the Original Saw Co., says a small bracket used for his saw motors surged to $87 from $42 this summer — more than doubling in price. Eden said: “It’s awful,” and added he now holds extra inventory because “I don’t know if we can get it down the road.”
The bracket is one example of a much larger squeeze. Tariffs, rising fuel costs from the war with Iran, and now higher interest rates are all pushing against American companies at once. Smaller companies rely on shorter-term lending and thus “pass more directly into their costs,” according to JPMorgan Chase global strategy head Dubravko Lakos-Bujas.
Eden’s Saw Business in Britt
Eden’s company employs 25 people and makes industrial power saws for wood and metalwork. The bracket increase is real. Eden isn’t guessing — he’s buying extra now because he doesn’t know what the price will be next month.
The pattern repeats across manufacturing. Gregory Daco, chief economist at EY-Parthenon, said: “The combination of higher rates and higher fuel prices means that sectors with heavy exposure to both are first in the line of fire.” Daco also said: “Any type of manufacturing is going to be disproportionately exposed to higher fuel prices.”
Rates and Tariffs Together
Lakos-Bujas said in a Sept. 14 note that Fed hikes pass more directly into costs for smaller companies. He cited 80 years of data in estimating that borrowing costs would hit larger companies when the 10-year Treasury yield reaches 6%, up from around 5% now.
The sectors suffering most in a rising-rate environment, Lakos-Bujas said, are capital-intensive ones: manufacturing, equipment suppliers, logistics firms including trucking fleets, and commercial real estate.
Cost Pressures at Home Depot
Even large companies are feeling the pinch. Home Depot CFO Richard McPhail said unexpected pressure from energy and raw materials costs will “fully offset” the benefit of $730 million in tariff refunds.
McPhail said last week at a conference: “There’s just so much uncertainty right now. … You think inflation, interest rates, fuel prices.”
A Detroit Maker Closes Down
Lucerne International, a privately held auto parts maker based near Detroit, stopped manufacturing in the U.S. and canceled plans for a $50 million aluminum forging plant in Michigan. CEO Mary Buchzeiger said: “The onset of the Trump tariffs 2.0 has just really torn holes in our global supply chains and increased costs significantly.”
Buchzeiger has shifted U.S. operations to warehousing, distribution, and tariff-mitigation solutions for other companies. She said those offer “much better margins.”
The Numbers Behind the Pain
Berylls by AlixPartners found that growth, measured by earnings before interest and taxes for the top 100 auto suppliers, fell last year to 4.2%, down from more than 6% in 2021. Among the top 10 automakers, the figure is 5.2%, down from nearly 8% in 2022.
Spanish auto parts maker Grupo Antolin filed for Chapter 15 bankruptcy protection in the U.S. in July, citing tariffs, higher raw-material and energy costs, and supply-chain disruptions. Grupo Antolin supplies components to automakers including Ford, GM, Volkswagen and Stellantis.
Paul McCarthy, CEO of MEMA (the Motor & Equipment Manufacturers Association), said: “There’s no doubt that there’s margin pressure for suppliers.” He added that “some of it, we try to absorb … and then some of it does have to be passed on.”
The CEO Who Named the Problem
Eastman Chemical CEO Mark Costa said in May that interest rates and inflation were pushing his industry into a corner. Costa said: “Everyone had their back against the wall and had no room to absorb these increases. Everyone is very quickly raising prices faster than I’ve ever seen in 20 years.”
The squeeze is visible in every part of the supply chain:
- Tariffs raise the cost of imported goods.
- Higher fuel prices make shipping and raw-material transport more expensive.
- Rising interest rates raise borrowing costs for companies of all sizes.
- Fed hikes pass more directly into the costs of smaller companies.
- Larger companies will feel the effects once the 10-year Treasury yield hits 6%.
What Eden’s Saw Business Shows
The bracket increase is not an abstract problem. Eden is buying extra inventory because the price has already doubled in a short stretch. He is not confident the supplier will still sell at $87 next month.
The combination of tariffs, fuel costs, and higher rates has created a trap for manufacturers. Eden is a small operator with limited choices. He buys, he stocks, and he hopes the price doesn’t go up again before he sells.
The relief valve for many companies is price increases. McPhail’s warning about offsetting costs suggests that even tariff refunds may not help much if raw-material prices keep climbing.
The story is not about Eden alone. It is about the pressure on every company that makes physical goods and ships them across the country. The three forces — tariffs, fuel costs, and higher rates — are pushing in the same direction. The extra inventory Eden is buying is a temporary fix.
Where the paper stands
The paper backs small businesses and the middle class carrying the economy and is against tariffs, higher fuel costs from the war with Iran, and higher interest rates pushing against American companies.
The bracket increase at Original Saw Co. is a symptom of a wider squeeze: tariffs, rising fuel costs, and now higher rates are pressing on American manufacturers at once. Small companies are the first to feel the cost of borrowing rise, as Lakos-Bujas notes, and the first to pass those costs directly into their own prices. Eden’s decision to hold extra inventory shows what that pressure looks like in practice — a company buying more than it needs because the price tomorrow could be higher still.
The paper’s position is clear: the middle class and small business carry the economy, and they get the least say in it. When the three forces — tariffs, fuel costs, and higher rates — push in the same direction, the cost of living and the cost of starting and running a small business both rise. The paper is against these pressures because they hurt the people who carry the economy. It is against the tariffs, against the higher fuel costs from the war with Iran, and against higher interest rates pushing against American companies.
Source material: “‘It's awful’: How tariffs, soaring fuel costs and higher interest rates are squeezing American companies,” CNBC.
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