If there’s a running theme in the latest batch of industrial earnings, it’s rising costs…A hodgepodge of higher costs — from rising raw material prices, labor shortages and supply-chain pressure — threatens manufacturers.
❝ Amid a busy day for manufacturers, Boeing Co., General Motors Co. and Pentair Plc had their numbers tarnished by mounting expenses. The culprits were varied: at Boeing, an escalating bill to get the delayed KC-46 Tanker program ready to make deliveries kept the company from raising its 2018 outlook as expected; GM’s profit will take a hit because of fallout from President Donald Trump’s tariffs on steel and aluminum; Pentair said higher input costs would weigh on third-quarter results before price increases recoup some of the lost margin toward the end of the year. United Parcel Service Inc., meanwhile, is still struggling to profitably handle the flood of e-commerce shipments…
❝ Rising costs are not an unusual phenomenon in the late stages of an economic recovery. Generally speaking, these cost pinches seem to be hitting hardest at shorter-cycle companies— such as consumer-goods or automotive manufacturers — that are arguably at or nearing a peak in growth. Whatever the extra source of cost, companies aren’t going to take the hits lying down. Many have used second-quarter earnings calls to pledge counteracting cost cuts and more aggressive price increases to help protect margins. But tariffs and rising trade tensions put us into new territory.
RTFA for the thrilling details. Unless you’re one of the dolts who takes orders from the Fake President. In which case you will be ignoring any analysis from respected business sources like Bloomberg – skipping past any facts counter to the economics dream world which received its best global test from Herbert Hoover.
We all know how well that turned out.
❝ President Donald Trump set off a wave of outrage…among Republican lawmakers, who accused the president of authorizing a “bailout” and “welfare” for Americans caught in the crosshairs of his own tariffs.
“It’s awful. American farmers want markets, not handouts. This is what we feared all along—that this would just turn into more aid programs,” Sen. Jeff Flake (R-AZ) told The Daily Beast.
❝ Reactions—nearly all of them negative—poured in from Capitol Hill after the Department of Agriculture announced that it would authorize $12 billion in “emergency” subsidies to farmers whose businesses have been hurt by the president’s trade policies, which have sparked retaliatory tariffs from China, Canada, Mexico, and the European Union…
❝ “Our farmers have been in non-stop saying they want trade not aid. And now they’re being put on welfare. So the tariff policies that have been put in place by the administration are now causing them to invoke a welfare policy for our farmers, which I’m sure is not what they wish,” Sen. Bob Corker (R-TN), who has proposed legislation requiring congressional approval of some tariffs, told reporters…
“The administration creates a problem for farmers, and now they need to put them on welfare. I think that’s kind of a misplaced policy,” Corker added.
RTFA for even more. When I first heard this silly-ass proposal my hope was that a few Congressional Republicans remained who weren’t full-time Trump pimps – and would raise a fuss. Here we go!