"U.S. Customs and Border Protection sends it a tariff bill that the company must pay before the merchandise can enter the country. Because tariffs raise costs for U.S. importers, those companies usually pass the expense on to their customers by raising prices. Sometimes, importers choose to absorb part of the tariff's cost so consumers don't switch to more affordable competing products. However, firms with low profit margins may risk going out of business if they do that for very long."
"But exporters don't have an incentive to do that if they can sell to other countries at a higher price. Studies of Trump's 2025 tariffs suggest that U.S. consumers and importers are already paying the price, with little evidence that foreign suppliers have borne any of the burden. After six months of the tariffs, importers are absorbing as much as 80% of the cost, which suggests that they believe the tariffs will be temporary."
Tariffs are taxes on imported goods imposed to protect domestic industries by raising the cost of competing foreign products. U.S. Customs and Border Protection bills importers, who must pay before merchandise enters the country. Importers typically pass tariff costs to customers by raising prices, though some may absorb part of the charge to remain competitive, risking losses if margins are thin. Importers can seek lower export prices from foreign suppliers, but exporters lack incentive to reduce prices if alternative markets pay more. Recent 2025 tariffs show U.S. consumers and importers bearing most costs, with importers absorbing up to 80%, implying expectations of temporary measures. Tariffs influence consumer prices, unemployment, inflation and recession risks.
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