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.