‘It's awful’: How tariffs, soaring fuel costs and higher interest rates are squeezing American companies

Fewer, pricier flights. Freight surcharges. Manufacturers hoarding inventory. Even bankruptcy.

For American companies large and small, the combination of tariffs imposed under President Donald Trump's trade policies, surging fuel prices from the Iran war and, now, rising interest rates is forcing executives to make tough choices.

Allen Eden has been holding onto extra inventory for his 25-person business, the Original Saw Co. in Britt, Iowa, which makes industrial power saws for wood and metalwork, as he grapples with spiking prices for aluminum, steel and essential parts.

One example: A "little bracket" used for his saw motors more than doubled in price this summer, surging to $87 from $42, he said.

"It's awful," Eden, 56, told CNBC. "[I'm] just trying to keep more of the stuff around because I don't know if we can get it down the road."

It's a three-way squeeze for businesses across manufacturing, transportation and retail: Tariffs are making raw materials and goods more expensive. Higher fuel prices are pushing up the cost of making and moving them. And rising rates are making it more expensive to finance the inventory and equipment businesses need to keep running.

While few sectors are completely insulated from these pressures, middle-market manufacturers are caught in a particularly tight vise. Rising steel and fuel costs are forcing them to pass at least some of those expenses on through higher prices, helping feed the stubborn inflation of the past few years.

But to wrangle inflation, the Federal Reserve raised interest rates for the first time in three years and signaled another hike is possible this year. That makes it more expensive for businesses to finance inventory and borrow for growth at the same time that higher input costs and record prices for diesel, which is used for trucking, squeeze margins.

Price increases for Eden's saws, sold both to megaretailers like Home Depot and directly to small- and medium-sized manufacturers, look inevitable, the business owner said.

The pain isn't being evenly distributed. Smaller companies typically rely on shorter-term lending, meaning Fed hikes pass more directly into their costs, JPMorgan Chase global strategy head Dubravko Lakos-Bujas said in a Sept. 14 note.

But regardless of size, capital-intensive sectors like manufacturing and equipment suppliers, logistics firms including trucking fleets, and commercial real estate also suffer more in a rising-rate environment, according to Lakos-Bujas.

"The combination of higher rates and higher fuel prices means that sectors with heavy exposure to both are first in the line of fire," said Gregory Daco, chief economist at EY-Parthenon, the global consulting arm of Ernst & Young.