Tariff Price Impact Calculator

Tariff Math: Why Import Duty ≠ Price Increase

A tariff applies only to the imported cost basis (FOB/CIF), not the retail price. If your product sells for $100 but only $40 of that is imported goods, a tariff increase only affects that $40 portion — not your domestic labor, packaging, or overhead.

A 15% tariff increase on a product where imports are 40% of retail price = only 6% cost increase. Many importers panic and over-raise prices because they confuse tariff rate increases with total cost increases.

Tariff Impact by Import Cost Share

Notice: the required price increase is always less than the tariff rate change. A 15-percentage-point tariff jump never requires a 15% price increase unless your product is 100% imported with zero domestic value-add.

Strategies to Mitigate Tariff Impact

Source from non-tariffed countries: Shift manufacturing to countries with favorable trade agreements. Many businesses moved production from China to Vietnam, Mexico, or India to avoid Section 301 tariffs.

Increase domestic value-add: The more value you add domestically (assembly, packaging, finishing), the smaller the tariff base. If you can reduce FOB from 40% to 25% of retail, the same tariff increase hits much less.

Apply for tariff exclusions: Government agencies periodically offer product-specific exclusions. File early and document why no domestic alternative exists.

Partial pass-through: Pass through 50-80% of the tariff increase and absorb the rest. This maintains competitiveness while protecting most of your margin.