This would be more impactful if we could see the cost to US purchasers was actually 39% more. Sadly some manufacturers spread the cost across all consumers, which actually means non-US customers are actually paying some of the tariff costs too.
Tariffs are a tax, paid on the value of imported good, by US citizens who are buying things from outside of the USA. That's it. They are not paid by anyone outside of the US.
Now tariffs are imposed, my import cost per widget is $139. Not only do I have to jack up my US price to $189, I have to jack up my UK price to £142, meaning UK customers are also paying the tariff now.
Even if you’re a bit smarter about your logistics and use an FTZ or drawback against the import duties, imagine you sell two widgets, one where you don’t pay import duties (bound for the UK) and one where you do (remaining in the US). Your total cost to import is $239.
Instead of making your US customers eat all the cost of the tariff, you might instead adjust your retail prices to $170 and £128 respectively. Again, now your British customers are paying an increased price due to the tariffs.
Edit: for that matter, if you could raise your prices without losing any customers, why did you wait for the tarrifs? You should have already done it.
I didn’t say I wouldn’t lose any customers. I probably will, but this way I probably lose the fewest.
Thus, the change may simply be that profit margin for sales into the US drops (or rather than it skews that way).
But there are still many commodities where you're not pricing the product based on branding.
These commodities will likely still have the same price on the international market. And thus, consumers in the US will see the effects of tariffs in the price.
Such commodities could be finished goods, but also parts, machines or feedstock for industry in the US.
I'd also guess that if you look at what middle class people buy, these commodities make up a larger percentage of the expenditure -- than it does for wealthy people. Making tariffs a very regressive tax.
Most people won't care about the price of luxury watch. But most people will buy aluminum cans, etc.
Of course not. They charge the highest price they possibly can in each market, regardless of other factors. They're not compensating this here or that there. Every company always charge as much as they can get away with, that is the core function of business.
Did they lower the US import price before the tariff is applied in the US?
Operating costs for coffee shops mainly come from other things than the beans, such as rent, utilities, wages.
Sony and Microsoft did price hikes outside of the US at first as an example of how other countries may be paying for US tarriffs indirectly. But as of a month ago these had to relent and eventually they did both do price hikes on their systems.