Comment by bobjordan

I'm an American that owns/operates a design and manufacturing company -- we build customer products in China and export to USA buyers. Let's say we build the customer product and sell it to them for $20 ex-works China. That means USA customer must pick it up at our dock and pay the shipping fee. Lets ignore the shipping fee to keep it simple. Assume USA customer currently sells the product for $80 in USA. If USA customer now needs to pay 35% import tariffs on $20/unit, then their cost goes up $7 USD. If USA customer passes 100% of that cost to their own final end customer, then they need to start selling it for $87 USD. So 35% tariff ultimately turns into a price increase of 8.75% for consumers.

But actually, tariffs have been 10-25% anyway for a number of years. So for existing products, some tariff cost was already included in that $7 total tariff cost. So, for existing products, the cost may go up ~$3.50 and our customer would sell it for ~$83.50 and the actual increase consumers would see is ~ 4.5% increase.

Now, this is a typical pricing scenario for our USA customers, they are selling individual products that cost $20 in China at volume, in USA at retail for ~3x-5x the per unit purchase cost from China, this is quite common. Now, the USA customer must buy ~5000pcs to get that $20 USD unit cost, while consumers get to buy only 1pcs and pay $87 USD, whether or not that is fair pricing given the risks and R&D costs, that's just the reality. Anyway, I'm not sure of the ex-works cost of shoes, but I'm highly confident big brands like Nike sell them for at least 5X the ex-works cost. So the math would be similar.