learn.howToCalculate
learn.whatIsHeading
The Tariff Impact on Consumer Price Calculator estimates how much of an import tariff increase gets passed through to retail prices, accounting for the tariff pass-through rate, supply chain markups, and demand elasticity.
Formel
New Retail Price = Base Price × (1 + Tariff Rate × Pass-Through Rate × (1 + Markup%))
- P₀
- Base Price ($) — Original pre-tariff wholesale cost of goods
- T
- Tariff Rate (%) — Import tariff percentage applied at customs
- PT
- Pass-Through Rate (%) — Percentage of tariff cost passed to consumers (typically 60-100%)
- M
- Retail Markup (%) — Markup percentage applied by wholesale and retail channels
Trinn-for-trinn guide
- 1Enter the current retail price and the tariff rate being applied
- 2Set the pass-through rate (percentage of tariff absorbed by importers vs passed to consumers)
- 3Apply wholesale and retail markup percentages on top of the tariff-adjusted cost
- 4Compare the new price to the original to see the total consumer impact
Løste eksempler
Inndata
Base cost $50, 25% tariff, 80% pass-through, 40% retail markup
Resultat
New cost = $50 × (1 + 0.25 × 0.80) = $60, Retail = $60 × 1.40 = $84 vs original $70 — a $14 increase
Inndata
Base cost $200, 10% tariff, 100% pass-through, 50% markup
Resultat
New cost = $220, Retail = $330 vs original $300 — a $30 increase
Vanlige feil å unngå
- ✕Assuming 100% pass-through when importers often absorb 20-40% of tariff costs
- ✕Ignoring that retail markups amplify the dollar impact of tariffs on final prices
- ✕Forgetting that demand elasticity affects how much price increase consumers will tolerate
Ofte stilte spørsmål
What is a typical tariff pass-through rate?
Studies show 60-100% pass-through for most consumer goods. Competitive markets with domestic alternatives tend to see lower pass-through (60-80%), while products with few substitutes see near-complete pass-through.
Why do tariffs increase retail prices by more than the tariff rate?
Wholesale and retail markups are applied multiplicatively on top of the tariff-adjusted cost, amplifying the dollar impact. A 25% tariff on a $100 item with a 50% retail markup adds $37.50 to the shelf price, not just $25.