...just passing the tariff increase straight to the consumer as you might think they would. Many seem to be absorbing at least part of it or splitting it with the customer to keep their business. Some more R-friendly companies are even hiding the cost from their customers to save face for the Administration--or avoid their punishment if they are large enough of course.
As always, larger importers will also be able to negotiate a lower price from manufacturers that will make the product and tariff costs lower than their competitors for the same exact item. They also likely have a lot more inventory on hand to help soften any immediate cost increases. We always hear how small business is so important, but when it comes to actually supporting it you can usually bet the politicians will give all the breaks to large ones. Typically, these tariffs will hit small businesses the hardest. They are less able to absorb cost increases, and they have little to no ability to negotiate prices based on volume.
However, over time this become unsustainable even for larger importers. The markets demand profits, and sharing the cost of tariffs with your customers eats into those. The cost increases also erode your customers' ability to buy more products--so even less profits. We are still early in an adjustment period that does not fully reflect the cost of the tariffs either to the consumer or on profits as everyone tries to soften the blow and continue to do business as usual, but that is only going to last so long. Eventually the data and the quarterly reports and the job numbers begin to show the ugly realities of this trade war and at some point it will make more sense to stop hiding it and let the blame fall where it may....
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