Tariffs are legally paid by
the importer of record (buyer)to their own government's customs agency, not by the foreign exporter. While importers (such as U.S. companies) bear the initial cost, they often pass the expense on to final consumers through higher prices, meaning the economic burden largely falls on consumers.- Economic Impact: Research indicates that roughly 96% of the cost of recent U.S. tariffs is borne by U.S. importers and consumers, rather than foreign companies.
- Exceptions: In specific international contracts, such as DDP (Delivered Duty Paid), the seller may agree to take responsibility for paying the import duties, but the burden is generally passed back to the buyer in the final price.
- Result: Tariffs often act as a tax on domestic companies and consumers, resulting in higher prices on goods, reduced wages, or lower profit margins for the importing firm.
- Who Remits Payment: The importing business, often with the help of a customs broker, pays the duty directly to the Customs and Border Protection (CBP) at the border.
Therefore, while the importer (buyer) is technically responsible for paying the tariff, the economic cost is generally shared, with a large portion passed on to the final consumer
