Who pays?
Importers pay tariffs to their home government. Most economists find that the bulk of tariff costs are passed on to consumers. This is particularly true for industries, such as retail or grocery stores, with small profit margins. “I don’t think there are an awful lot of retailers or businesses out there whose margins are so huge that they can just swallow a 25 percent cost increase,” said Philip Levy, an economist in the George W. Bush administration. A study by researchers from the Federal Reserve and the University of Chicago found that consumers bore between 125 and 225 percent of the costs of washing machine tariffs, indicating that appliance retailers charged even more than the tariffs had cost them.
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At www.cfr.org
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