American companies are getting squeezed by tariffs, fuel costs, and interest rates. Three things they absolutely saw coming. Three things they had years to hedge against. Three things their CFOs definitely mentioned in at least forty-seven earnings calls before doing nothing about them.
Manufacturers are complaining the loudest. The same manufacturers who spent the last decade buying back stock instead of investing in supply chain flexibility. The same ones who leveraged up when rates were zero because their investment bankers promised this time was different. The same ones who somehow forgot that fuel prices go up and that governments like taxing foreign goods.
Auto suppliers are particularly screwed. They locked in contracts with razor-thin margins back when money was free and gas was cheap. Now they're paying 7% to borrow and watching diesel hit prices that would make a 2008 trucker weep. But sure, blame the tariffs. Blame Powell. Blame anyone except the guy who signed a five-year fixed-price contract with Ford and called it strategic planning.
Retailers and transportation companies are joining the pity party. Transportation costs are up because fuel is up. Shocking development for an industry that runs on literal gasoline. Retailers can't pass costs to consumers because consumers already spent their money on Stanley cups and sports betting losses. The margin compression is real. The sympathy is not.
Every single one of these companies has a risk management department. Every single one of them has access to futures markets, currency hedges, and basic f*cking spreadsheets. They chose not to use them because protection costs money and quarterly earnings matter more than not going bankrupt in year three.
The technical setup remains bullish until it isn't, which is the same thing their supply chain consultants told them about globalization.
Photo by Markus Winkler on Unsplash
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