ECONOMY: Many Family budgets and tariffs are making waves across the globe as prices rise
OPINION
May 12, 2025
PHOENIX (AGN.News) – Tariffs are beginning to dominate the news cycle every day. All aspects of life appear to be affected by the anxiety of tariffs. Retailers securing products from China are feeling the pinch more than others due to the 145% tariffs on goods from China.
Small and medium-sized businesses buying from China are alerting their customers of coming price increases.
How do tariffs work and who pays?
First, the government determines the tariff rate. It could be as low as no tariffs or as high as 145% added to the cost of selected products.
When a company orders products from, let’s say, China, those products are shipped to the U.S. either by air or by ship. Once they arrive, the tariff is added to the cost of the goods being delivered. The tariff is paid to the government upon arrival.
The goods are already paid for by the purchaser when they’re ordered. Once the cost of the tariff is established, the receiver of the products, namely the buyer, will receive a bill for the amount of the tariffs soon thereafter.
On the bill is a must-pay-by date. It could be days or much longer when the bill must be paid. Defaulting on the debt is not an option. Next, the buyer has to decide if he or she will absolve the cost of the tariffs or add the cost to each item in the order.
Does the retailer get his money back?
What can I do if the bill is too high? Herein is the problem. If it’s a dollar or two the customer may just proceed with the purchase. If every single item on the tariff list is sold and the full cost of the item including the tariff is recuperated by the retailer, then all is well.
However, if the retailer who now owns the products with a no-return policy in effect cannot sell the products because of the high cost then the retailer is left with stock that he can’t sell. In this case, he loses both the money paid in advance and the money paid in tariff cost. And products he can’t sell.
So the big question is can he get the tariff money back? Can he just send the items back to China? Will the government refund his cost?
The short answer is no. There are no refunds, no returns, no China check coming. The retailer loses on all fronts.
What can the retailer do now?
That of course depend on the retailer. For large retailers like Walmart or Target they can absorb losses or hold on to the items for a future sale.
For the little guy it’s more complicated because his or her operating capital is tied up in unsellable merchandise due to its now increased cost.
At this point many come face to face with reasons why tariffs are sometimes considered a bad idea from the end user point of view. When budgets are strained and funds are tight families are left facing an economic squeeze they didn’t count on.
The moral of this issue is – tariffs are making waves across the globe. Tariffs may be good for some but bad for others. Only time will ultimately answer that question.
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Written by
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