Actually, a sizable chunk of the refunds will go to companies like Cantor Fitzgerald, the company of the commerce secretary Howard Lutnick (or his sons, which is the same thing), that bought the tariff refund rights last year for 20% of the refund value. While Lutnick was ostensibly pro-tariff, his company was betting against the tariffs being legal, and now will collect refunds paid by the American taxpayer.
So in reality, the tax payer is on the hook twice: once for paying the tariffs through increased prices, and once for the debt created by the people disbursing refunds to themselves.
Pricing for any item is set by one thing: what people are willing to pay for it.
If a business raised prices because of tariffs, and consumers paid the higher price, that was a successful test that consumers are willing to pay that higher price for the item. Once that’s been established, the business has little incentive to lower prices once the tariffs go away. Prices only go down if competition with other companies pushes them down, but every player in a market has little reason to do so when they’re enjoying the higher profits.
> Pricing for any item is set by one thing: what people are willing to pay for it.
Pricing is set by two things: supply and demand. Tariffs make supply more expensive, less supply is brought in, therefore the consumer must either pay higher prices or go without. Yes, they can just choose not to buy, and then the importer can choose not to import.
Pricing for almost every item is set by the lowest price the producer is willing to accept, not by what people are willing to pay.
It's the "one price rule" in economics.
Everybody is willing to pay different prices. If you're starving, you're probably willing to pay "all my money" for food. But you don't, you pay the same price as everybody else who aren't willing to pay that much. The seller can't set the price to "all your money" because somebody else will be willing to sell for less.
> but every player in a market has little reason to do so when they’re enjoying the higher profits.
In that case any producer willing to defect from this implicit pact and lower their prices slightly will be able to make all the profit. Anti-trust should be ensuring there are enough producers that there's always somebody willing to goose their profits at the expense of their competitors by lowering prices.
In reality these work very well for many of the important things. Ask any farmer who sells a 60 pound bushel of wheat for $6, producer of $10 blue jeans or maker of those $400 60" TV's. They're not swimming in profit.
The exceptions are far fewer, but far more noticeable. Housing and health care don't follow the one price rule. The exceptions dominate our mindshare because they're so painful, but the non-exceptions outnumber the exceptions.
Yeah but, that vagary is literally the exact same wording that can be applied to "prices are set according to what consumers no; not it's value" that sparked this thread.
Every player has an incentive to lower the price: it attracts customers away from the other players.
They were able to raise their prices all at once because of tariffs. If they'd done that by simply agreeing to raise prices, it would be collusion.
Once the tariffs go away, prices would be naturally expected to fall back to their previous equilibrium because the same forces apply.
It's even more complicated than that, of course. But if there was competition before tariffs then there is competition after tariffs and you'd expect them to act similarly.
Oversimplification. Businesses can exist when the the cost of a good is less than the price they can get. There are many possible prices that this might be true, and there is some price that maximizes net profit.
When an item's margin becomes large, the risk/reward equation becomes favorable for new competition to come in. That puts downward pressure on prices.
For a given good, let's say that tariffs increased the business's cost for that good. If that cost goes away and the price stays constant, then the margin increases. That triggers more competition.
Many businesses added specific surcharges to final sales to offset the tariffs they paid. While they have no legal obligation to refund those surcharges they imposed, it would be straightforward to do so and it would be the right thing to do.
Or keep it as a rainy day fund against the next time one of their major markets goes insane with attempted extortion, possibly successfully next time? Their customers paid a price they were comfortable with —- if a company returns part of that to the customer, they disadvantage themselves compared to their competitors who do not do so in the next round of tariffs, since their competitors can use the rainy day fund to delay price rises, capturing customer spend (which is to say, competitor-voluntary-donation-to-customer spend).
It's not a matter of "surprised", rather it's outraged over the lack of accountability. The administration acted illegally, which caused harm to consumers. It's reasonable to expect consumers to be made whole from the results of those illegal actions - the same as if corpos were found to be illegally colluding to raise prices without Grump spearheading it.
(although honestly I wouldn't be surprised if such a push ended up with the profligate spendthrift in chief sending more paltry "stimulus" checks with his ugly-ass signature on it right before midterms)
I’ve also sold things to US and pre-paid tariffs to my shipping broker.
I’m doubting myself or my buyer will be getting a refund.
Same for my buyer that bought items via eBay, paying the tariffs, through the EIS/eBay International Shipping service where the buyer pays for it and I ship the item to eBay in Canada whom trucks it over the border.
This would be a valid concern if businesses got $1 in additional tariff costs and passed on $1 in price increases. This categorically did not happen, and businesses absorbed the vast majority of the blow through both stockpiling and taking the bullet.
Prime example is Mercedes. The RRP for post-tariff Mercedes vehicles was identical to the pre-tariff RRP.
Food prices also rose significantly less than the tariff increases.
Importantly, journalists in media, classically inept at any economic analysis, implied that 10% tariff = 10% RRP rise. They never corrected themselves, nor for the economists who falsely claimed the economy would collapse.
When you pay $10 for a widget at the store, the cost price of that widget is likely $2. A 10% additional tariff (if passed along fully, it wasn't) would mean the widget goes from $10.00 to $10.20.
>Zero businesses passed on the additional costs onto the consumer? None?
That wasn't the claim made. OP said:
>and businesses absorbed the vast majority of the blow through both stockpiling and taking the bullet.
Which so far as I can tell, is approximately correct, even if the "vast majority" part is suspect. A goldman sacs from last year estimated consumers will pay 55% of the tariffs by end of 2025. However that only includes the tariffs paid, whereas OP also included "stockpiling".
OP also says "This would be a valid concern if..." so, no need to defend these poor massive businesses who also screwed us with shrinkflation for five years.
> Importantly, journalists in media, classically inept at any economic analysis, implied that 10% tariff = 10% RRP rise. They never corrected themselves, nor for the economists who falsely claimed the economy would collapse.
This is irrelevant to the discussion in the article, which is specifically about refunding a portion of whatever amount a company receives back from the government to customers.
It's also pretty vague without any examples of what specifically deserves corrections.
> Prime example is Mercedes. The RRP for post-tariff Mercedes vehicles was identical to the pre-tariff RRP.
If your prime example is a luxury car with a ton of margin built in, you need a better example. Tariffed commodities absolutely had the costs passed on, and far more of those are sold than high margin luxury products where manufacturers had the option to compress margins vs passing on the cost.
Also, there are lots of products that go through multiple middle men, the tariffs were included and marked up at every stage. Very few things go from manufacturer to retailer with no middlemen.
I’d guess about 1/4 to 1/3rd of tariff costs were absorbed and the rest passed along to the eventual end consumer.
I suspect you work nowhere near the money at work, the closer you get to the money, the more you realize exactly what is built into a price.
> Importantly, journalists in media, classically inept at any economic analysis, implied that 10% tariff = 10% RRP rise. They never corrected themselves, nor for the economists who falsely claimed the economy would collapse.
I initially thought the same thing, but there is a human listed as the photographer, Mark Abramson. The photo has been processed, but it’s not AI generated.
Actually, a sizable chunk of the refunds will go to companies like Cantor Fitzgerald, the company of the commerce secretary Howard Lutnick (or his sons, which is the same thing), that bought the tariff refund rights last year for 20% of the refund value. While Lutnick was ostensibly pro-tariff, his company was betting against the tariffs being legal, and now will collect refunds paid by the American taxpayer.
So in reality, the tax payer is on the hook twice: once for paying the tariffs through increased prices, and once for the debt created by the people disbursing refunds to themselves.
Don't worry, it'll trickle down to consumers. It always did. /s
Pricing for any item is set by one thing: what people are willing to pay for it.
If a business raised prices because of tariffs, and consumers paid the higher price, that was a successful test that consumers are willing to pay that higher price for the item. Once that’s been established, the business has little incentive to lower prices once the tariffs go away. Prices only go down if competition with other companies pushes them down, but every player in a market has little reason to do so when they’re enjoying the higher profits.
> Pricing for any item is set by one thing: what people are willing to pay for it.
Pricing is set by two things: supply and demand. Tariffs make supply more expensive, less supply is brought in, therefore the consumer must either pay higher prices or go without. Yes, they can just choose not to buy, and then the importer can choose not to import.
Pricing for almost every item is set by the lowest price the producer is willing to accept, not by what people are willing to pay.
It's the "one price rule" in economics.
Everybody is willing to pay different prices. If you're starving, you're probably willing to pay "all my money" for food. But you don't, you pay the same price as everybody else who aren't willing to pay that much. The seller can't set the price to "all your money" because somebody else will be willing to sell for less.
> but every player in a market has little reason to do so when they’re enjoying the higher profits.
In that case any producer willing to defect from this implicit pact and lower their prices slightly will be able to make all the profit. Anti-trust should be ensuring there are enough producers that there's always somebody willing to goose their profits at the expense of their competitors by lowering prices.
It should be, but isn't.
You are describing theory, which is fine as a model but it is an imperfect model. There are a host of reasons this falls apart in reality.
In reality these work very well for many of the important things. Ask any farmer who sells a 60 pound bushel of wheat for $6, producer of $10 blue jeans or maker of those $400 60" TV's. They're not swimming in profit.
The exceptions are far fewer, but far more noticeable. Housing and health care don't follow the one price rule. The exceptions dominate our mindshare because they're so painful, but the non-exceptions outnumber the exceptions.
Not a single post in this comment thread isn't just describing theory.
Yeah but, that vagary is literally the exact same wording that can be applied to "prices are set according to what consumers no; not it's value" that sparked this thread.
only true for commodities
Every player has an incentive to lower the price: it attracts customers away from the other players.
They were able to raise their prices all at once because of tariffs. If they'd done that by simply agreeing to raise prices, it would be collusion.
Once the tariffs go away, prices would be naturally expected to fall back to their previous equilibrium because the same forces apply.
It's even more complicated than that, of course. But if there was competition before tariffs then there is competition after tariffs and you'd expect them to act similarly.
Oversimplification. Businesses can exist when the the cost of a good is less than the price they can get. There are many possible prices that this might be true, and there is some price that maximizes net profit.
When an item's margin becomes large, the risk/reward equation becomes favorable for new competition to come in. That puts downward pressure on prices.
For a given good, let's say that tariffs increased the business's cost for that good. If that cost goes away and the price stays constant, then the margin increases. That triggers more competition.
Free gift link:
https://www.nytimes.com/2026/04/24/us/politics/companies-con...
Also true of any other refund a business might get for any other expense the business was overcharged for. Not sure why anyone is surprised.
Many businesses added specific surcharges to final sales to offset the tariffs they paid. While they have no legal obligation to refund those surcharges they imposed, it would be straightforward to do so and it would be the right thing to do.
Or keep it as a rainy day fund against the next time one of their major markets goes insane with attempted extortion, possibly successfully next time? Their customers paid a price they were comfortable with —- if a company returns part of that to the customer, they disadvantage themselves compared to their competitors who do not do so in the next round of tariffs, since their competitors can use the rainy day fund to delay price rises, capturing customer spend (which is to say, competitor-voluntary-donation-to-customer spend).
The actual incidence of tariffs is mostly on consumers, so giving remedies to businesses doesn't actually make any sense.
I'm not surprised, but I think this is a miscarriage of justice.
Depending on the relationship it’s totally normal to say hey we want to adjust what you builded us.
Not every business the business relationship works that way, but it’s not unusual.
As for a surprise goes, I don’t know about surprised, but certainly it’s worth noting that after a massive illegal tax …. voters get no justice.
It's not a matter of "surprised", rather it's outraged over the lack of accountability. The administration acted illegally, which caused harm to consumers. It's reasonable to expect consumers to be made whole from the results of those illegal actions - the same as if corpos were found to be illegally colluding to raise prices without Grump spearheading it.
(although honestly I wouldn't be surprised if such a push ended up with the profligate spendthrift in chief sending more paltry "stimulus" checks with his ugly-ass signature on it right before midterms)
I’ve also sold things to US and pre-paid tariffs to my shipping broker.
I’m doubting myself or my buyer will be getting a refund.
Same for my buyer that bought items via eBay, paying the tariffs, through the EIS/eBay International Shipping service where the buyer pays for it and I ship the item to eBay in Canada whom trucks it over the border.
We can play the same at this game.
Im game at throwing $1000 in to Polymarket at the "Walmart CEO leaving the role in any method"
Im naturally not going to request anything unbecoming or illegal. Buuuuuuuuuuut im not going to frown either if if happens.
Prediction markets == assassination markets.
This would be a valid concern if businesses got $1 in additional tariff costs and passed on $1 in price increases. This categorically did not happen, and businesses absorbed the vast majority of the blow through both stockpiling and taking the bullet.
Prime example is Mercedes. The RRP for post-tariff Mercedes vehicles was identical to the pre-tariff RRP.
Food prices also rose significantly less than the tariff increases.
Importantly, journalists in media, classically inept at any economic analysis, implied that 10% tariff = 10% RRP rise. They never corrected themselves, nor for the economists who falsely claimed the economy would collapse.
When you pay $10 for a widget at the store, the cost price of that widget is likely $2. A 10% additional tariff (if passed along fully, it wasn't) would mean the widget goes from $10.00 to $10.20.
Zero businesses passed on the additional costs onto the consumer? None?
>Zero businesses passed on the additional costs onto the consumer? None?
That wasn't the claim made. OP said:
>and businesses absorbed the vast majority of the blow through both stockpiling and taking the bullet.
Which so far as I can tell, is approximately correct, even if the "vast majority" part is suspect. A goldman sacs from last year estimated consumers will pay 55% of the tariffs by end of 2025. However that only includes the tariffs paid, whereas OP also included "stockpiling".
https://abcnews.com/Business/new-tariffs-effect-us-consumers...
OP also says "This would be a valid concern if..." so, no need to defend these poor massive businesses who also screwed us with shrinkflation for five years.
Yeah, that was quite a claim. I didn't realize that businesses were were so altruistic?
It's also pretty vague without any examples of what specifically deserves corrections.
> Prime example is Mercedes. The RRP for post-tariff Mercedes vehicles was identical to the pre-tariff RRP.
If your prime example is a luxury car with a ton of margin built in, you need a better example. Tariffed commodities absolutely had the costs passed on, and far more of those are sold than high margin luxury products where manufacturers had the option to compress margins vs passing on the cost.
Also, there are lots of products that go through multiple middle men, the tariffs were included and marked up at every stage. Very few things go from manufacturer to retailer with no middlemen.
I’d guess about 1/4 to 1/3rd of tariff costs were absorbed and the rest passed along to the eventual end consumer.
I suspect you work nowhere near the money at work, the closer you get to the money, the more you realize exactly what is built into a price.
> Importantly, journalists in media, classically inept at any economic analysis, implied that 10% tariff = 10% RRP rise. They never corrected themselves, nor for the economists who falsely claimed the economy would collapse.
Lovely strawman.
> journalists in media, classically inept at any economic analysis
It’s just the NYT. Let’s not demean the rest of the media for the faults of the NYT.
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An image having a bit of bloom doesn't make it AI generated. If the Times started using undisclosed AI-generated images, it would be a huge scandal, and a violation of their own policies: https://www.nytimes.com/2025/06/12/reader-center/new-york-ti...
Wow, there is a (seemingly non-official) account on here with the username `ycombinatornews`. Somehow, they joined in 2018 and only have 60 karma.
I think it's real, just post-processed to look like Costco from the perspective of someone dreaming about it
I initially thought the same thing, but there is a human listed as the photographer, Mark Abramson. The photo has been processed, but it’s not AI generated.
It doesn't seem obvious. How can you tell?
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