Right, but they'll underprice just below the floor price for the imported good, because why would businesses leave money on the table?

The choice for consumers won't be "choose between a $5 item and $15 item" it will be "choose between $13 and $15", like I mentioned above.

This doesn't work as easily if the sticker price for the imported good is $5 and the real price displayed at the end of the purchasing funnel. The local business will have to keep its sticker price at $5 to avoid losing customers when they initially compare goods or rely on customers to come back to them once they get faced with the tariff tax, which will also lose customers.