For goods for which no domestic equivalent alternatives exist, why would the foreign suppliers lower their prices to compensate for the tariffs (which are paid by the importers to the government)? More generally, the cost of the tariffs will be split between foreign suppliers and local importers/consumers according to the competitiveness and availability of domestic suppliers, and according to market elasticity for the respective goods.

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cortesoft 2 hours ago | parent [-]

Well, they would likely have to lower their profit margin because the demand is reduced by the higher prices. Fewer purchasers will want to/be able to buy the item at the higher price. The supply and demand curve will find a new equilibrium, but it isn’t like the sellers are going to sell the exact same quantity of items with the price exactly increased by the tariff amount.

	▲	wolrah an hour ago \| parent [-]
		That assumes that demand is meaningfully elastic, that suppliers have room in their margins to absorb it, and that they're willing to. That is obviously not the case for a lot of things. Products with inelastic or less elastic demand we can skip over because it's pretty self explanatory. Products like the random cheap widgets a lot of us would buy from random Chinese sellers are often high volume low margin products with a lot of competition. Think about stuff like a USB->TTL serial board that's basically two connectors, one cloned chip, and a few supporting components on a single layer PCB. Hypothetically this is an ideal case for free market economics and these things should have already been basically as cheap as they can be at every step in the chain. For less competitive items, particularly lower volume specialty items, a vendor may also decide that it's just not worth sacrificing profits in other markets by letting them know there's room to come down. A lot of the independent hardware designers I've been wanting to buy things from sell out every batch one way or another so they just don't care, demand exceeds supply even if demand from the US is reduced. Others have decided the volatility of the situation just isn't worth it with the risk of products getting delayed or additional charges added resulting in chargebacks and lost products and have simply stopped selling to the US altogether.