Nobody has a massive margin to start with to pay for the tariffs. Not just margin on the goods but overall operating margin. Just comparing p:rice of imported goods to tariffs doesn’t capture
Merchant increasing the cost of a broader basket of goods than is tariffed to soften the cost of paying the tariff
Shrinkflation as you mentioned
Not changing the price until they have worked through all supply including a larger than normal stock bought as a hedge against inevitably lowered or removed tariffs
choosing to maintain business at a temporary cost that cannot reasonably be borne forever
In the long run the oversimplification that a useful understanding. The idea that we can live off the largess of the foreigners instead of taxing income is a moronic idea that hasn’t worked any of the other times its been tried. There is every reason for the long term stable price increase to be most of the cost of the tariff even if this isn’t true in the short term in a chaotic environment.
Nobody has a massive margin to start with to pay for the tariffs. Not just margin on the goods but overall operating margin. Just comparing p:rice of imported goods to tariffs doesn’t capture
In the long run the oversimplification that a useful understanding. The idea that we can live off the largess of the foreigners instead of taxing income is a moronic idea that hasn’t worked any of the other times its been tried. There is every reason for the long term stable price increase to be most of the cost of the tariff even if this isn’t true in the short term in a chaotic environment.