The Great Tariff Mystery​

Walmart was hardly alone. Mattel similarly drew presidential ire after warning that tariffs would force it to raise some toy prices, while major retailers including Target and Home Depot went conspicuously out of their way to explain how hard they were working not to pass tariff costs along to customers. Automakers reportedly received similar warnings, although Trump later denied telling them to hold prices down and said he “couldn’t care less” if automobile prices rose.

This is all rather elaborate behavior surrounding a tax that Americans are repeatedly assured they do not pay. If foreign countries really bear the tariff, there should be no reason to tell Walmart to “eat” it, no reason for Mattel to contemplate higher prices, and no reason for retailers to scramble to absorb, offset, or evade the cost. One does not normally need a presidential campaign against passing along a cost that supposedly does not exist.

Yet there is an oddly consistent pattern here.

Impose a tariff. Businesses warn that costs will rise. Economists explain that tariffs are taxes on imports paid initially by domestic importers. Firms begin adjusting supply chains, absorbing margins or passing some of the additional cost downstream. Then exemptions appear, rates decline, offsets materialize, or entire categories of goods are quietly removed.

And we are asked to believe that the one thing connecting those decisions is not the cost imposed on Americans.

The November 2025 food exemptions are particularly difficult to explain away. The administration removed tariffs from products including coffee and beef amid concerns about grocery affordability. Contemporary reporting explicitly described the move as tariff relief aimed at easing pressure on consumers. But…? No, never mind.

This does not mean every tariff increase produces an immediate, one-for-one increase in retail prices. Exchange rates move. Foreign producers sometimes absorb part of the tax. Importers compress margins. Inventories delay pass-through. Businesses substitute suppliers. Consumers substitute products. The incidence of a tariff can be distributed across several parties and over time.

But none of that rescues the proposition that tariffs somehow make Americans richer by making imported goods more expensive. The repeated reversals demonstrate what should, for a nation owing so much to markets, prices, and property rights, be embarrassingly basic economics. When taxing an imported product begins creating politically uncomfortable consequences, the solution repeatedly turns out to be…taxing it less.

Coffee. Beef. Bananas. Tomatoes. Potash. Auto parts. Smartphones. Computers. Tariffs went on. Then tariffs came off. Not because tariffs increase costs, of course. Because, well…because.

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