...a supplier cost of $100 that is margin up by 30% yields a $142.85 customer price is about to be raised to $171.43 if a 20% tariff is applied on the supplier cost and the seller/trader maintains his/her 30% margin. To keep customer price the same at $142.85, the seller would have to reduce his/her margin by half to 15%
...no business can survive reducing margin by half under higher operating cost pressures.
...the issue is not just a passing of the tariff to the customer, but with rising customer pricing, the seller now would likely face a reduced demand for his/her products. So either lower margin or lower revenues or both represent significant headwinds for American businesses that rely on imports. Think Walmart, Target, Home Depot, Lowes and many small businesses trading imported items.
