Quote:
Originally Posted by edslunch
I think it does make a difference. If I'm selling something for $100 and a 25% tariff gets applied then I'm still getting $100 per unit but losing market share, meanwhile the US customer is paying more but creating internal push back against the tariff.
If on the other hand I'm told I have to pay the 25% then I'm only getting $75 per unit and the US customer feels no pain. If I want to get back to $100 I need to raise my price to $133 in order to absorb the 25% tariff, and the US customer feels more pain than in the other case, so i lose even more business.
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That’s only because in one case you charged your self a $33 Tarrif and the other a $25 Tarrif.
Stall if you apply the Tarrif to the retail price of the good it will be lower than if you apply it to the whole sale price of the good.
X/.8 = x*1.25
The Tarrif % would be adjusted accordingly