How tariffs actually work
A product costs $10
Let's say there is a 25% tariff, the importer (in the US) pays $2.50 to the government.
So the item they bought cost them $12.50
They sell to a distributor with their standard profit margin. Let's say it's 30% if would cost $16.25
They sell to a retail store with a 30% margin. $21.12
Retail markup depends on the type item. Could be 5% - 100%. Lets say it's 50%. You pay $31.69. At no point does the country of origin pay the USA anything.
Let's say there is a 25% tariff, the importer (in the US) pays $2.50 to the government.
So the item they bought cost them $12.50
They sell to a distributor with their standard profit margin. Let's say it's 30% if would cost $16.25
They sell to a retail store with a 30% margin. $21.12
Retail markup depends on the type item. Could be 5% - 100%. Lets say it's 50%. You pay $31.69. At no point does the country of origin pay the USA anything.
