How this calculator works
A tariff is a tax on the value of an imported good at the border. The importer pays it, but who ultimately bears the cost depends on how easily each side of the market can adjust. If the exporter cuts its price, the tariff is absorbed abroad; if retailers accept thinner margins, they absorb part of it; if the buyer has no substitute, most of it reaches the retail price. The pass-through input lets you test those cases: at 100% the full duty is added to the price, at 0% none of it is. The calculation treats the tariff as a share of the current price, so it is a close approximation when the import value and the retail price move together. Exchange rate changes, substitute suppliers and product reformulation can all reduce the effect.
Formula
Tariff amount = current price × tariff rate. Amount added to the retail price = tariff amount × pass-through share. New price = current price + amount added, and the price increase is the amount added / current price.
Worked example
A $100 product facing a 10% tariff with full pass-through rises to $110, a 10% increase. If only half the tariff is passed on, the price rises to $105, a 5% increase, while the importer absorbs $5.
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Frequently asked questions
Why does the price change by less than the tariff rate?
The tariff applies to the import value, while the retail price includes shipping, duties, wholesale and retail margin and sales taxes. Those other components are not tariffed, so a 10% duty on the import value is normally less than 10% of the shelf price.
Does a lower pass-through mean lower prices overall?
Not necessarily. Absorbed tariffs usually reduce the importer's or retailer's margin, and over time firms may drop products, change suppliers or exit the market. Pass-through is a short-run description, not a statement about who pays in the long run.
Which tariff rate should I enter?
Use the rate that applies to your product's tariff classification and country of origin, including any additional duties in force. Rates are set by legislation and can change quickly, so verify the current schedule before relying on a result.