We are living in the Trump era’: White House Report Card

Always in His Presence said:

Post 77 is accurate and true. And disproves your assumption.

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Post #77 mentions that importers, such as Walmart, Target, or other US companies, pay the import tax, also known as the tariff.

Do companies that pay these tariffs on imported products pass the cost on to consumers, or do they choose to reduce their profit margins instead?

Always in His Presence said:

Post 77 is accurate and true. And disproves your assumption.

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No, it doesn't. American companies are American consumers. If their costs increase, they have less money to pay their American employees and less money to spend in America on services and facilities. For small importers who may just have a single employee, that loss of profit means a direct loss of income for the owner.

As I pointed out in a previous post, companies have largely tried to avoid passing costs on to their customers so far, either by eating the tariff costs or by using up inventory that was ordered before the tariffs went into effect. Neither of those strategies is viable long-term for most companies though, especially now that the tariffs are going back up from the (relatively low) 10% that they've been sitting at for the past few months. Inventory eventually runs out, and most companies can't afford to eat a 20-40% increase in their inventory costs indefinitely. The next 3-6 months will almost certainly see price increases on many goods - clothes will probably be the hardest hit - unless Trump backs down again.

And keep in mind that a tariff does not necessarily require an equivalent percentage increase in retail price to cover. For example, if my cost on a product is $10, then a 20% tariff increases that to $12. But if I've been reselling it for $20, I only need to raise the price by 10% to recoup my increased costs and maintain my profit margins.

Always in His Presence said:

You tell me tariffs have been in place since April yet cross the board prices have risen between 1.7 and 2.3%.

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As mentioned in my previous post, with which you concurred, any policy changes implemented by President Trump will take approximately nine to twelve months before their positive or negative impact on the economy becomes apparent. The employment figures and economic growth data from the past six months do not reflect the effects of the president's policies. The potential consequences of tariffs—whether beneficial or adverse—have yet to be fully realized.

However, my question remains: when importers such as Walmart or other US companies pay import taxes, do they absorb these costs by reducing their profit margins, or do they pass the costs on to consumers?

Always in His Presence said:

You tell me tariffs have been in place since April yet cross the board prices have risen between 1.7 and 2.3%.

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That was pretty much an across the board 10% wasn't it? The 90 deals in 90 days was just more Trump nonsense. The change date was a couple of days ago and that got slid again pending if you have a dictator on trial for trying to steal an election or not. Here's the thing. Large companies can eat some or all of that tax hike, but that's not going to last forever. (Some companies held off on price hikes as Trump delayed tariffs. That ends soon) Small and mid size companies can not. We already seen some of those fold up shop.

Always in His Presence said:

Some do, some don’t. That you will have to research for yourself.

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I agree.

Many companies have absorbed the costs or imported products before the tariff, so prices haven't risen much yet. Price changes likely won't appear for several more months.

Some companies may continue to absorb the increased tariff costs, but large retailers such as Walmart or Amazon are unlikely to sustain the absorption of a 15% cost increase on products for an extended period. They will eventually pass that to consumer.

If American consumers, who are also voters, are willing to pay higher prices to increase U.S. revenue for the Treasury, this could be considered positive news for the country. Historically, conservatives have opposed such forms of taxation, while Democrats and liberals have supported them; however, it is possible that perspectives are shifting, and some conservative Americans may now also support paying higher prices for products in order to boost government revenue.

Always in His Presence said:

Thanks for your opinion - we disagree.

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It's mutual. I disagree many of your opinion.