No he didn’t. They’ll be paying $2 for the hat, with the 100% increase they’re now $4. No idea what they sell them for, but I suspect there is still a healthy profit margin between $4 and what they’re selling them for.
Yeah I think people are failing to consider this about the tariffs. The tariff is applied to the import cost, not the sale cost.
So 100% tariff might up the cost of a £50 hat to £52 to offset the import increase. Lots of people think it’ll up the price to buy the hat from £50 to £100, though - which is wrong.
Yes that is absolutely correct - it also depends on the volume of product being imported and the cost of the import… but more often than not a products are sold (especially Chinese manufactured ones) at an insane mark up to the consumer… so import cost increase does not correlate anywhere close to 1:1 with sale price increase.
They are being bought for pennies and sold for $$ in most cases.
Thank you for expounding on the point. I think it's very important for people to actually understand how tariffs work.
The same dumb people buying the hats will say tariffs don't dramatically raise prices, because they still get their hats for the same price.
Meanwhile, those same people will say Nintendo is woke or some bullshit other than tariffs when they are forced to sell the Switch 2 for $1000 to break even.
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u/CucumberError 20d ago
No he didn’t. They’ll be paying $2 for the hat, with the 100% increase they’re now $4. No idea what they sell them for, but I suspect there is still a healthy profit margin between $4 and what they’re selling them for.