> Hence the customer is paying 1175 for the 1000 bike, not 2450.
No, all of these business rely on percentage margins to stay cashflow positive, not absolute revenue. It's possible that a few companies will absorb a small amount of the percentage, and result in it costing 2200 or something, but the tariff is not like VAT, it won't get "tacked on at the end", because each step in the chain depends on economies of scale that in turn depend on demand that are sensitive to price. Price going up decreases sales, which incurs additional overhead per sale, etc. Businesses are not going to give up their net margin for free, they'll only do it if it's the least bad way to address the shortfall of sales as a result of price increases.
You are correct in that it is all based on margins. I am used to the UK where there is VAT, plus multiple steps in an import chain, from importer, distributor, wholesaler and retailer. With some brands the importer is the distributor, sometimes the distributor is the wholesaler and sometimes the wholesaler is the retailer. Supply chains depend on the product to some extent and if the product is exclusive to a given supplier.
In B2B there is typically a doubling of price at each step so the 'trade price' appears incredibly cheap to a customer, yet that is a multiple of the import price.
Each step has its own risks and overheads so it is not greedy to have these markups.
B2B customers are in a strong position to negotiate prices and B2B sales staff know their customers well. It is therefore entirely possible for costs due to tariffs to be passed down the chain without everyone doubling that tariff tax at every stage. There is no incentive to do so, or for those costs to be absorbed.
What I am saying is that it works more like a customs duty rather than a simple price hike.
Wait for the panic to die down and see how this happens.
Two observations, much like Brexit, life goes on, shops are full and people still eat. Then, as for the vast bounty that the guy in the White House expects to raise, there is very little and no cash windfall arrives.
Clearly some products are more complex than others, I only really know typical e-commerce stuff, not automobiles that go across the Mexican border three times as they get assembled.
I have noted that the media has mom and pop entrepreneurs importing things such as plastic spoons for autistic pigeons to clean their ears with or diapers for left handed crypto-bros, where they are going to be exposed to the tariffs bigly. The media have not had typical medium sized retail businesses that buy goods from wholesalers that deal with distribution companies.
I am no fan of the tariffs or the orange man but I did live through Brexit and have my reasons not to go into panic mode.
I also think historical comparisons to tariffs a century or more ago are not helpful as the distribution chain has evolved over time. In these distant times a tariff would act like a customs duty on tobacco or alcohol.
No, all of these business rely on percentage margins to stay cashflow positive, not absolute revenue. It's possible that a few companies will absorb a small amount of the percentage, and result in it costing 2200 or something, but the tariff is not like VAT, it won't get "tacked on at the end", because each step in the chain depends on economies of scale that in turn depend on demand that are sensitive to price. Price going up decreases sales, which incurs additional overhead per sale, etc. Businesses are not going to give up their net margin for free, they'll only do it if it's the least bad way to address the shortfall of sales as a result of price increases.