Contrary to popular belief, import tariffs are not paid by the exporting country. Instead, the financial burden falls on the importing country—initially on the importing businesses and ultimately the consumers.

When goods arrive at a U.S. port of entry—such as the Port of Long Beach or Los Angeles—customs officials assess the official tariff rate. The importing firm (e.g., Home Depot or CVS) pays this tax to bring the goods into the country. This cost is not always immediately passed on to consumers.

Retailers may initially absorb the tariff costs for several reasons:

• Uncertainty about policy stability: Under the Trump administration, tariff rates have been fluctuating, making firms hesitant to adjust prices prematurely.
• Inventory buffering: Some stores have been selling from existing inventory, purchased before the tariffs were imposed, in order to delay price increases.
• Profit margin compression: Retailers may temporarily accept lower profits to maintain competitive pricing.

But these strategies have limits. As inventories dwindle and new, tariffed imports arrive, businesses face a choice: raise prices or continue to absorb costs. Over time, price increases are inevitable.

Thus, price increases tend to unfold gradually—not overnight. Eventually, the economic reality reasserts itself: the consumer pays for everything. That’s the foundational principle of market exchange. Businesses exist to pass costs along, whether through pricing or product adjustments.