e.g. In a different path, 1 and 2 are the same, but things then diverge.
3) To recoup some of those tariff costs, the company sells the rights to any potential future tariff refunds. They recoup a portion of what they paid immediately but hand away the right to a full refund to another party, such as Cantor Fitzgerald. The seller might use this to reduce prices for their customers, but probably won't. They'll set prices according to what the market will support.
4) US government will refund all/most of that tax back to companies, like Cantor Fitzgerald, that bought the rights to tariff refunds.
5) Seller doesn't get any extra money back, so there's no money to refund to consumers.
IMPORTANT NOTE: Cantor Fitzgerald, while just one of the companies doing this, was formerly headed by Howard Lutnick and is currently owned and operated by his sons.
The importer CAN be the seller, but other times the importer is a middleman in the supply chain.
I could see an argument that they don't have a legal obligation to pass the refunds on to their customers, any more than my local grocery store owes me 5 cents for the gallon of milk I bought last year if the store discovers that their wholesaler had been mistakenly overcharging them.
The difference this time is the scale is orders of magnitude larger. Will be interesting to see how they (importers and CBP) work through this.
The U.S. Treasury has a whole system for this, but in the other direction. If the government owes you money, and you owe the government money, the Treasury will deduct what you owe from whatever they are paying out.[1] But they're not set up for that in the other direction.
The administration will just do nothing. They need 3 maneuvers for this to drag out longer than Trump 2.
There is no intention to follow the law here.
Before: Importer pays China $10 for widget, pays $2 duty, sells to shop for $12 - profit zero, tax on that zero.
Now: Paid $10 for widget. Paid $2 duty, sold for $12, $2 refunded - profit $2, pays tax on the $2.
At least that's the normal way of doing accounting. There can be odd exceptions and complications in local laws.
I did what passes for research these days and concluded that if the claim is "probable and estimable," then it could be recorded as a "contingent liability" rather than other income. Relevant facts would include whether the tariff refund included a pass-through refund mandate (unlikely with this administration), or whether class actions for refunds against merchants were pending (inevitable).
UPS didn't even deliver the product.
I'm suing them in small claims.
We'll see what happens.
I imagine that even after the ruling, our ass backwards legal system will somehow say this makes sense, even though the tariff rate was never near high enough for that bill to make any sense.
Further, they're going to get refunded the $10 it MIGHT have cost them.
That's what matters, don't care if it's the seller or a middleman that gets this money.
That's really a shame for american citizens, i'd be furious if i was american.
I can otherwise understand how people would agree on paying more for their stuff if it allows their fellow citizens to have a job.
I obviously am not particularly happy about the tariffs being struck down like a lot of people are. And having paid those tariffs thinking they were at least legitimate tariffs, I'm also not super happy that I won't be seeing that money come back to me (neither in the form of services paid for by taxes, nor in the form of a refund). It's a crappy situation all around.
I won't sit here and claim the Supreme Court got it wrong, but it does make me wish the administration had worked more carefully to do it in a legal way the first time, for example, or that Congress had been involved to achieve it since the administration's party controlled them this whole time, anyway.
We’ll see…
Such a kleptocracy.
If they do, that's another matter, but they definitely can.
I think I'm kidding, but I'm not really sure anymore.
That topic will surely go back to the courts, kicking and screaming
You owe them, and I wouldn’t be surprised if they withhold future packages to your address until you settle up.
Strictly speaking it depends on the Incoterms agreed upon by the seller and buyer[1]. If the Incoterms are DDP, then the seller should pay import duties and taxes and as such is involved.
Of course sellers are typically trying to run a business, so they'll bake the taxes and import duties into the sales price. So effectively the buyer ends up paying for it, just indirectly.
This was relevant when the tariffs were introduced, as sellers with DDP goods in transit had committed to a sales price which included any tariffs and would have to swallow the extra costs when they got the bill from the freight forwarder.
[1]: https://en.wikipedia.org/wiki/Incoterms#Allocations_of_risks...
Tariffs are like a national sales tax.
(I know the answer is practically ’no’, but it does still seem to me that the bureaucracy and companies that went along with this obviously illegal operation bear some culpability...)
I can see why you are mad, but it seems like the were fulfilling their legal obligation (at the time).
The good news is that having directly paid UPS and not a middleman makes it much more likely that you will receive the money back. If anybody does.
Though this is obviously a first so expect a billion lawsuits about this.
Elections have consequences.
Is there a reason to believe, or evidence, that it's not a mixture of the two?
edit: I want to highlight esseph's reply has a link to evidence that last year's tarrifs were passed off 90% to consumers, which is exactly the type of info I was looking for.
"Importers and consumers in the US bear 96 percent of the tariff burden."
Products with inelastic or less elastic demand we can skip over because it's pretty self explanatory.
Products like the random cheap widgets a lot of us would buy from random Chinese sellers are often high volume low margin products with a lot of competition. Think about stuff like a USB->TTL serial board that's basically two connectors, one cloned chip, and a few supporting components on a single layer PCB. Hypothetically this is an ideal case for free market economics and these things should have already been basically as cheap as they can be at every step in the chain.
For less competitive items, particularly lower volume specialty items, a vendor may also decide that it's just not worth sacrificing profits in other markets by letting them know there's room to come down. A lot of the independent hardware designers I've been wanting to buy things from sell out every batch one way or another so they just don't care, demand exceeds supply even if demand from the US is reduced. Others have decided the volatility of the situation just isn't worth it with the risk of products getting delayed or additional charges added resulting in chargebacks and lost products and have simply stopped selling to the US altogether.
That makes zero sense. You mean “by lowering the profit margin on the goods sold to the US by that specific company”.
Countries don’t pay tarrifs (bar state intervention), companies do.
But yes, it’s probably a mix of the two: raising prices and lowering profit margins.
https://www.forbes.com/sites/petercohan/2026/02/15/consumers...
The businesses in the other countries are, you know, businesses. Even if it were Chinese companies that were paying the tariffs, that will be baked into the cost of the good.
This is literally first-day economics. No such thing as a free lunch. The cost of the item that the end user pays should reflect all costs associated with production and distribution to that end user.
I have no idea how the fuck the rumor that these tariffs will be “paid by other countries” started. If there are suspicions that the tariffs are temporary then they might be willing to eat the cost temporarily so it’s not passed onto the consumer immediately, but that’s inherently temporary and not sustainable especially if it would make it so these companies are losing money.
A tariff or import tax is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods or raw materials and is paid by the exporter.
The economic burden of tariffs falls on the importer, the exporter, and the consumer. [Wikipedia]
It doesn’t matter who sends the actual tariff payment, it gets priced into the cost of the product.
Trump started threatening anyone who was going to do that, because he doesn't want his face attached to price hikes.
Eh, standard business school logic these days is that if you want to maximize profits, you should charge what the market will bear, not your costs + some fixed profit.
So if you're already charging what the market will bear, there may be more wiggle room to absorb some of the hit of tariffs, so long as it still leaves you making enough profit or in a favorable position. It still comes down to what maximizes tariffs: at higher prices, demand drops, but at lower prices, your profit/item drops.
Still, yeah, from what I understand, the bulk of the tariff costs were passed along to customers.
It's what POTUS was saying since day 1. That we've been getting ripped off and we're gonna make the other countries pay us etc etc etc.
It is, as I said in the post, obviously wrong - but that's where it comes from.
See also: disinformation that "other countries charge us the same tariffs", which turns out to be either a plain lie, or they mean VAT (a sales tax, like we have in the US).
"But we found that Trump’s so-called “reciprocal” tariff rates weren’t based on tariffs that other countries charged on goods coming from the U.S. Instead, the Office of the U.S. Trade Representative came up with the rates by dividing the size of a country’s trade imbalance with the U.S. in goods by how much America imports in goods from that nation. "
I don't recall seeing a split between domestic consumers and domestic companies, but I'm fairly sure that consumers are paying more than the 10% that foreign entities are.