5 ms·

I think the misunderstanding is in a combination of wording + practical application. Tariffs in the legal sense are technically paid by the importer who sells

I think the misunderstanding is in a combination of wording + practical application. Tariffs in the legal sense are technically paid by the importer who sells a product. It's their responsibility to pay it... always. The importer could technically eat that cost, and the consumer wouldn't see a difference on their price tag. But what happens in practice, the vast majority of the time, is the importer passes that extra cost on to the consumer by raising the price they're selling it for. This is technically a business decision made by every importer individually, it is not a requirement. The people saying tariffs are paid by the importer, or tariffs are paid by the consumer, are both right, but within different perspectives and depending on how each importer chooses to handle their tariffs.

SunshineTheCat 9mo ago
I know of a 10-12 employee business in my town who custom-designs kids products that are manufactured in China because they want to keep their products affordable for parents. Getting them manufactured in the US (even though they wanted to) was way too expensive and would require them to charge way above retail just to stay open. Once the tariffs dropped, their cost of goods more than doubled. Their business in that capacity, was gone overnight. It's easy to think in some vacuum businesses can just "absorb" costs, but as many businesses know, this is rarely the case.
- temp8830 9mo ago
  OK, so the custom-designed kids product becomes a luxury item and the business has to charge above retail. The kids learn that adults time is too valuable to be spent on manufacturing trinkets that get thrown away. They take better care of the few toys they do own. There is less plastic crap in landfills. Seems like a win all around?
  - JoshTriplett 9mo ago
    > so the custom-designed kids product becomes a luxury item No, it becomes a non-existent item. > Seems like a win all around? If you burn your neighbor's house down, it's possible that what will get built in its place will be nicer. That doesn't make it a "win all around".
  - SunshineTheCat 9mo ago
    These products were specifically designed to help care for kids with special needs. And the goal was to keep the items as affordable as possible because their customers were often on a shoestring budget for one reason or another. Genius, though. Just have them pay more for their "luxury" items! Why didn't they think of that! They would be glad to know helping kids with special needs is a "luxury."
kspacewalk2 9mo ago
Tariffs can be paid by the seller/exporter. If a very significant part of a company's business is done in the US, and the tariff is sufficiently high, they will lose market share if the customer eats the entire cost of the tariff (which is the whole point of the exercise in the first place). So they may decide to socialize this cost a little bit, by increasing prices in all countries, by a lot less than the tariff, and making customers in other markets in effect subsidize the Americans. Everyone except Americans .pays a bit more, prices don't rise as much for Americans. It's interesting to see how little of that is going on, empirically, by looking at these kinds of quantitative studies.
- jleyank 9mo ago
  Without coercion today, why would anybody try to give the US a break at the cost of its other trading partners...?
  - charcircuit 9mo ago
    Because the US has the strongest economy in the world.
    - leptons 9mo ago
      Or, it's the biggest house of cards.
  - kspacewalk2 9mo ago
    Because a corporation doesn't have trading partners, it has a mission to sell to customers. If customers are disproportionately in the US, which happens quite often, then you can entirely rationally decide that pissing them off with a big price hike is worse for the bottom line than pissing everyone off a little. https://www.reuters.com/business/retail-consumer/global-retailers-tariff-strategy-risks-spreading-pain-beyond-us-consumer-2025-05-20/ https://www.reuters.com/business/retail-consumer/global-reta...
    - nullocator 9mo ago
gtowey 9mo ago
IMO the people claiming that "technically the importer pays the tariff" are deliberately using the letter of the law to confuse and distract the main thrust of the arguments. What we mean when we ask who is paying the tariff is this: when we increase tariffs, who becomes poorer? And the answer to that is obvious.
- hammock 9mo ago
  What’s obvious about it? Tariffs mean more money stays in the U.S.
  - amanaplanacanal 9mo ago
    Tariffs mean money is transferred from the consumer to the government.
leptons 9mo ago
A part costs what a part costs, and the consumer is always going to be the one who pay for that. If tariffs raise the price of the part, then the consumer pays more for the product the part is used in. The cost of the part goes up (because tariffs), the price of the product goes up too. It's really that simple. No "importer" is going to eat the cost of the tariffs, and it is ridiculous that anyone would think that.
- ranger_danger 9mo ago
  > No "importer" is going to eat the cost of the tariffs, and it is ridiculous that anyone would think that. I know several who do exactly that.
  - leptons 9mo ago
    I'm going to call bullshit on that. They likely had stock on-hand that they purchased before the tariffs. I have a hardware startup (parts imported from China, assembled on-shore), and I guarantee you that my customers are paying for every cent of the tariffs that make my product cost ~30% to 100% more (depending on the whims of an imbecile). No way am I paying it. I can't afford it. The parts cost what they cost, and there simply is no alternative part that can be purchased locally. If my customers can't swallow the extra cost, then I have less customers, which hurts my small business. If you were my customer, you would be paying for the tariffs.

SunshineTheCat 9mo ago

I know of a 10-12 employee business in my town who custom-designs kids products that are manufactured in China because they want to keep their products affordable for parents. Getting them manufactured in the US (even though they wanted to) was way too expensive and would require them to charge way above retail just to stay open. Once the tariffs dropped, their cost of goods more than doubled. Their business in that capacity, was gone overnight. It's easy to think in some vacuum businesses can just "absorb" costs, but as many businesses know, this is rarely the case.

temp8830 9mo ago
OK, so the custom-designed kids product becomes a luxury item and the business has to charge above retail. The kids learn that adults time is too valuable to be spent on manufacturing trinkets that get thrown away. They take better care of the few toys they do own. There is less plastic crap in landfills. Seems like a win all around?
- JoshTriplett 9mo ago
  > so the custom-designed kids product becomes a luxury item No, it becomes a non-existent item. > Seems like a win all around? If you burn your neighbor's house down, it's possible that what will get built in its place will be nicer. That doesn't make it a "win all around".
- SunshineTheCat 9mo ago
  These products were specifically designed to help care for kids with special needs. And the goal was to keep the items as affordable as possible because their customers were often on a shoestring budget for one reason or another. Genius, though. Just have them pay more for their "luxury" items! Why didn't they think of that! They would be glad to know helping kids with special needs is a "luxury."

kspacewalk2 9mo ago

Tariffs can be paid by the seller/exporter. If a very significant part of a company's business is done in the US, and the tariff is sufficiently high, they will lose market share if the customer eats the entire cost of the tariff (which is the whole point of the exercise in the first place). So they may decide to socialize this cost a little bit, by increasing prices in all countries, by a lot less than the tariff, and making customers in other markets in effect subsidize the Americans. Everyone except Americans .pays a bit more, prices don't rise as much for Americans. It's interesting to see how little of that is going on, empirically, by looking at these kinds of quantitative studies.

jleyank 9mo ago
Without coercion today, why would anybody try to give the US a break at the cost of its other trading partners...?
- charcircuit 9mo ago
  Because the US has the strongest economy in the world.
  - leptons 9mo ago
    Or, it's the biggest house of cards.
- kspacewalk2 9mo ago
  Because a corporation doesn't have trading partners, it has a mission to sell to customers. If customers are disproportionately in the US, which happens quite often, then you can entirely rationally decide that pissing them off with a big price hike is worse for the bottom line than pissing everyone off a little. https://www.reuters.com/business/retail-consumer/global-retailers-tariff-strategy-risks-spreading-pain-beyond-us-consumer-2025-05-20/ https://www.reuters.com/business/retail-consumer/global-reta...
  - nullocator 9mo ago

gtowey 9mo ago

IMO the people claiming that "technically the importer pays the tariff" are deliberately using the letter of the law to confuse and distract the main thrust of the arguments. What we mean when we ask who is paying the tariff is this: when we increase tariffs, who becomes poorer? And the answer to that is obvious.

hammock 9mo ago
What’s obvious about it? Tariffs mean more money stays in the U.S.
- amanaplanacanal 9mo ago
  Tariffs mean money is transferred from the consumer to the government.

leptons 9mo ago

A part costs what a part costs, and the consumer is always going to be the one who pay for that. If tariffs raise the price of the part, then the consumer pays more for the product the part is used in. The cost of the part goes up (because tariffs), the price of the product goes up too. It's really that simple. No "importer" is going to eat the cost of the tariffs, and it is ridiculous that anyone would think that.

ranger_danger 9mo ago
> No "importer" is going to eat the cost of the tariffs, and it is ridiculous that anyone would think that. I know several who do exactly that.
- leptons 9mo ago
  I'm going to call bullshit on that. They likely had stock on-hand that they purchased before the tariffs. I have a hardware startup (parts imported from China, assembled on-shore), and I guarantee you that my customers are paying for every cent of the tariffs that make my product cost ~30% to 100% more (depending on the whims of an imbecile). No way am I paying it. I can't afford it. The parts cost what they cost, and there simply is no alternative part that can be purchased locally. If my customers can't swallow the extra cost, then I have less customers, which hurts my small business. If you were my customer, you would be paying for the tariffs.