[furyofantares]

Why do we repeatedly say that tarrifs are passed off in full to the consumer in the form of higher prices? Isn't that as obviously wrong as the argument for them, that they're paid entirely by the other countries?

Is there a reason to believe, or evidence, that it's not a mixture of the two?

edit: I want to highlight esseph's reply has a link to evidence that last year's tarrifs were passed off 90% to consumers, which is exactly the type of info I was looking for.

[esseph]

"American consumers bore 90% of last year's nearly six-fold tariff increase, adding $1,000-$2,400 to average household budgets, despite overall inflation dropping to 2.4% in January 2026."

https://www.forbes.com/sites/petercohan/2026/02/15/consumers...

[furyofantares]

Exactly the type of info I was hoping for, thank you.

[sdenton4]

Here's evidence : https://www.kielinstitut.de/publications/news/americas-own-g...

"Importers and consumers in the US bear 96 percent of the tariff burden."

[davorak]

I have to assume that some of that 4% has second order negative effects on US importers and consumers.

Profit margins can not always go down by 4% and in those cases goods and services would then not be available to US importers and consumers is only one example.

My assumption is that the 96% statistic does not fully encapsulate the negative costs to consumers. I have to to wonder how much higher the burden is over 96% when all second order effects are taken into account.

[IcyWindows]

That's not just consumers. That is "importers and consumers"

[phil21]

Importer != Consumer. I think that's very obvious to anyone paying attention to this whole thing. In fact, it's a small minority of imports that are direct to consumer.

It absolutely is a mix of the importer (e.d. manufacturer, producer, wholesaler, retailer, etc.) absorbing some in their margin and the consumer picking up the bill via price increases for the rest.

It's quite obviously not 96% being paid by the consumer across the board just from looking at the CPI numbers.

All this study states is the obvious: foreign producers didn't lower their cost by much in response to tariff burden. They largely charged the same rate to a buyer in the US vs. a buyer in Germany.

This isn't to defend the tariff situation - just that this study gets trotted out a whole lot in an extremely disingenuous manner. Other data that exists is better that measures direct consumer impact.

[layer8]

For goods for which no domestic equivalent alternatives exist, why would the foreign suppliers lower their prices to compensate for the tariffs (which are paid by the importers to the government)? More generally, the cost of the tariffs will be split between foreign suppliers and local importers/consumers according to the competitiveness and availability of domestic suppliers, and according to market elasticity for the respective goods.

[cortesoft]

Well, they would likely have to lower their profit margin because the demand is reduced by the higher prices. Fewer purchasers will want to/be able to buy the item at the higher price. The supply and demand curve will find a new equilibrium, but it isn’t like the sellers are going to sell the exact same quantity of items with the price exactly increased by the tariff amount.

[AnimalMuppet]

Well, the analysis by the Federal Reserve said that domestic entities (consumers and companies) paid 90% of it. So, yes, saying that consumers pay it all is wrong, but it's less wrong than saying that foreign countries pay it all.

I don't recall seeing a split between domestic consumers and domestic companies, but I'm fairly sure that consumers are paying more than the 10% that foreign entities are.

[JDEW]

> by the other countries

That makes zero sense. You mean “by lowering the profit margin on the goods sold to the US by that specific company”.

Countries don’t pay tarrifs (bar state intervention), companies do.

But yes, it’s probably a mix of the two: raising prices and lowering profit margins.

[NoLinkToMe]

It is a mixture of the two. But my reading of various studies indicates that in this mixture, the majority was passed to consumers in the form of higher prices.

[tombert]

What an odd thing to say.

The businesses in the other countries are, you know, businesses. Even if it were Chinese companies that were paying the tariffs, that will be baked into the cost of the good.

This is literally first-day economics. No such thing as a free lunch. The cost of the item that the end user pays should reflect all costs associated with production and distribution to that end user.

I have no idea how the fuck the rumor that these tariffs will be “paid by other countries” started. If there are suspicions that the tariffs are temporary then they might be willing to eat the cost temporarily so it’s not passed onto the consumer immediately, but that’s inherently temporary and not sustainable especially if it would make it so these companies are losing money.

[RupertSalt]

https://en.wikipedia.org/wiki/Tariff

  A tariff or import tax is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods or raw materials and is paid by the exporter.

If an analysis says that "domestic consumers are paying 90%" of a tariff then they are simplifying the process that others are describing here as "baked into the cost" and I would say, more accurately, "the cost of tariffs are recouped from consumers/businesses by those who paid them (the importer)"

  The economic burden of tariffs falls on the importer, the exporter, and the consumer. [Wikipedia]

If economists are saying "consumers pay tariffs" then I would expect to see a notation on the price tags and a line-item on my receipts, but the cost of the tariff must be paid by the importer, or there won't be a consumer who can purchase the goods, let alone bear the costs of their tariffs.

[dboreham]

It wasn't a "rumor" it was explicit deliberate disinformation. Unfortunately many people in the US have insufficient education and accurate news feeds to realize.

See also: disinformation that "other countries charge us the same tariffs", which turns out to be either a plain lie, or they mean VAT (a sales tax, like we have in the US).

[Windchaser]

> The cost of the item that the end user pays should reflect all costs associated with production and distribution to that end user.

Eh, standard business school logic these days is that if you want to maximize profits, you should charge what the market will bear, not your costs + some fixed profit.

So if you're already charging what the market will bear, there may be more wiggle room to absorb some of the hit of tariffs, so long as it still leaves you making enough profit or in a favorable position. It still comes down to what maximizes tariffs: at higher prices, demand drops, but at lower prices, your profit/item drops.

Still, yeah, from what I understand, the bulk of the tariff costs were passed along to customers.

[furyofantares]

> I have no idea how the fuck the rumor that these tariffs will be “paid by other countries” started.

It's what POTUS was saying since day 1. That we've been getting ripped off and we're gonna make the other countries pay us etc etc etc.

It is, as I said in the post, obviously wrong - but that's where it comes from.

[fastasucan]

Does anyone have a good explanation on how supposedly other countries were paying the tariffs? If so, nothing would deter the american consumer from buying foreign?

[Hikikomori]

It's much more true than saying that the foreign company pays it. Depends on how much slack there is in profit margins for both the exporter and importer, but the consumer does pay most of it, like 90%.

[RupertSalt]

I recommend that commenters shell out and pony up for a thesaurus before its import duty is magnified sixfold.