The dreaded letter finally came. We knew it would, and we know more like it are on the way.
I run a landscape company that works across the western states. Dozens of vendors deliver the materials our crews need. With diesel prices soaring, the surcharge notices were only a matter of time.
This one came from SiteOne, a national landscape supplier. It said California diesel averaged $8.181 a gallon as of Sept. 28, about 64% higher than a year ago. Starting Oct. 5, every California delivery carries a $25 fuel surcharge. They call it temporary. We’ll see.
We take roughly 250 SiteOne deliveries a month in California. At $25 each, that’s $6,250 a month and $75,000 a year.
One supplier. One line item. $75,000.
Nurseries, irrigation suppliers and playground manufacturers will follow. Across all our vendors, we expect about $500,000 a year in surcharges.
Then there’s our own fleet. We burn about 80,000 gallons of gasoline a month and pay roughly $2.25 more per gallon than a year ago. That’s $180,000 a month, or $2.16 million a year.
Same trucks. Same work. A much larger bill.
Add it up: about $2.66 million a year, for one landscape company, for nothing it didn’t already have. An enormous chunk of pre-tax profit, gone. So what do we do? We cut back on expansion plans. We raise prices. We reduce headcount. We go into defensive mode.
Welcome to the hidden wars tax. It’s hitting all of us on three fronts. The Iran war has sent fuel prices soaring. The tariff war taxes nearly everything we import. And both of them are driving up the cost of borrowing. Almost none of this shows up in Washington’s accounting. All of it shows up in yours.
Your plumber, pool company, gardener, grocer and delivery service face the same squeeze. Businesses absorb what they can. Some put off buying equipment. Some hold off on hiring. Others raise prices.
Eventually, all this pressure reaches your wallet and your quality of life.
Sometimes it’s a line on an invoice. More often it disappears into the price of grapes, beef, shoes, a refrigerator, a brake job.
Flying? Brace yourself. The federal Gulf Coast jet fuel benchmark hit about $4.40 a gallon on Sept. 29, up from $2.08 a year earlier. That’s more than double, and it lands on passenger fares and air freight alike.
Then there’s the gas in your own tank.
Take a Santa Clarita family with two commuters driving State Route 14 and burning 40 gallons a week. At $2.25 more per gallon, that’s $90 more every week. Nearly $4,700 a year.
It buys no extra miles. It just costs more to get through the same week.
That’s the first front.
The second is tariffs. The Tax Foundation estimates the new tariffs will add about $152 billion in customs collections this year. The White House calls that winning. Look at who writes the checks. American importers pay those duties, then pass them along to American businesses and American shoppers through higher prices and thinner margins. The Tax Foundation puts the cost at more than $800 per household this year.
Fuel plus tariffs comes to about $5,500 a year for that commuting family, and that’s before a single supplier surcharge reaches the grocery shelf.
The third front is borrowing.
Inflation keeps the Federal Reserve under pressure to hold interest rates higher, longer. The Fed can’t repeal a tariff or reopen a shipping lane. All it can do is make borrowing more expensive.
So you pay more for necessities, then more to finance them.
Freddie Mac’s average 30-year mortgage rate hit 7.28% on Oct. 1, up from 6.34% a year earlier. On a $400,000 loan, that’s about $250 more a month in principal and interest, or $3,000 a year.
A fixed-rate mortgage protects existing homeowners. A young family buying its first home gets no such shelter. For them, the hidden wars tax tops $8,500 a year.
These charges arrive at different speeds. Gas hits immediately. Supplier increases work their way through contracts and inventories. Borrowing costs land when loans reset or a family needs new financing.
More bills are still coming.
The Pentagon says the Iran war has cost $43.6 billion so far. Its own estimate leaves out inflation. It doesn’t count your gas, your groceries, or the house you put off buying. It doesn’t count the $2.66 million my company alone will pay. The tariffs alone will take $152 billion this year, more than three times the Pentagon’s total. Add fuel and borrowing across American commerce, and the real price of these wars dwarfs anything the Defense Department reports.
That’s where the hidden wars tax lands: at the kitchen table, where families decide what gets paid, what gets put off, and what they can no longer afford.
Donald Trump promised lower prices and no new wars. We got two new wars and higher prices.
He started these wars. We got drafted into them.
Gary Horton is chairman of the College of the Canyons Foundation board. His “Full Speed to Port!” has appeared in The Signal since 2006. The opinions expressed in his column do not necessarily reflect the opinions of The Signal or its editorial board.
