Tariffs, Tantrums, and Who Actually Pays

Yesterday, the Supreme Court heard oral arguments on whether Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) gave him the authority to unilaterally impose tariffs on virtually any country and any category of goods under the banner of an “economic emergency. ”Exciting stuff, I know. Nothing like waking up and wondering whether a 50-year-old law meant for national security crises should be used to economically karate chop entire trading partners...

At stake isn’t just one set of tariffs. It’s whether the president can declare a trade imbalance an emergency and start playing global whack-a-mole with import duties on anything from microchips to mangoes.

Chief Justice Roberts Asks the Obvious

In a moment of clarity, Chief Justice John Roberts asked Trump’s lawyer:

“So who actually pays the tariff?”

And the answer, while a little rambling and bureaucratic, boiled down to this:

It depends. Sometimes the foreign seller pays.
Sometimes the American importer pays.
Sometimes it’s absorbed, passed on, or shared.
And yes, sometimes the final consumer bears the cost — if the price increases down the line.

Which, to be clear, is… correct.

But Then Came the Memes

Within hours, Democratic orgs and online influencers had already taken a scalpel to the transcript and declared:

“TRUMP LAWYER ADMITS: THE AMERICAN PEOPLE PAY THE TARIFFS!”

No. That’s not what was said.

And more importantly — that’s not how tariffs work.

So let’s clear it up, with minimal condescension and maximum sarcasm.

Tariff 101: Who Writes the Check?

Here’s the part people forget:

The entity that imports the goods is the one who literally pays the tariff to U.S. Customs and Border Protection.

Usually:

• A U.S.-based distributor buys goods from abroad (like steel, semiconductors, bicycles).
• The distributor files the customs paperwork.
• The distributor pays the tariff.
• The government cashes the check.
• That’s it.

So technically?
The “American people” don’t pay squat — unless someone downstream chooses to pass that cost on.

The Cost Chain: Pass-Through Economics 101

Let’s walk it down the line like it’s a conga dance of blame:

1. Foreign supplier sells goods → sets base price
2. U.S. distributor imports → pays tariff → raises prices?
3. U.S. manufacturer or wholesaler buys from distributor → raises prices?
4. Retailer or small business buys → raises prices?
5. American consumer buys finished product → maybe pays more?

At each link, the business decides:

“Do I eat this cost or pass it on?”

And most importantly:
Nobody is forced to pass it on.

Some businesses do. Some don’t. Some raise prices on other things to compensate. Some eat it because competition won’t let them raise prices. It’s a pricing decision, not a direct tax.

The Point: It’s Not a Tax on You (Unless It Gets to You)

When politicians say “tariffs are a tax on the American people,” they’re oversimplifying to the point of distortion.

It’s like saying “restaurant rent is a tax on diners” — not wrong in spirit, but also not how taxes or business margins work.

If a tariff never results in a price increase to the end customer, then it wasn’t a tax on the public.
It was a cost absorbed along the supply chain.

So no, your lunchbox didn’t get taxed. The importer of record did on the parts that made the lunchbox. Calm down.

And If the Tariffs Get Overturned?

Here’s the kicker. Let’s say SCOTUS rules that the tariffs were unconstitutional.

Who gets the refund?

Not:

• The consumer
• The retailer
• Your grandma who bought a pressure cooker made in Korea

Only the importer of record gets the refund — the company that cut the check to CBP.

So if a large distributor paid $2 million in tariffs on Chinese imports and didn’t pass the cost on? They’ll get a refund. If they did pass it on — to manufacturers, wholesalers, or small businesses down the chain — they might pocket the refund anyway.There’s no refund mechanism for the American companies or consumers who indirectly bore those costs.So when the political left inevitably celebrates this as a “win for consumers,” remember: the only real beneficiaries will be the importers and distribution giants who already cushioned themselves, not the small manufacturers or retailers who took the hit.

Why this matters?

We can have a legitimate debate about:

• Whether Trump overstepped with the IEEPA
• Whether tariffs work as trade policy
• Whether the U.S. should have a more transparent system for economic retaliation

But this “tariff = direct tax on Americans” narrative is not only misleading — it confuses the public and creates political outrage where understanding should be.

It’s how we ended up with 100,000 shares on a meme quoting a sentence that wasn’t said, misunderstood, then weaponized.

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And If It’s Overturned? The “Victory” Will Be Absurdly Ironic

If the Supreme Court strikes down Trump’s use of the IEEPA for broad tariff powers, brace yourself for the victory laps.

You’ll see the usual parade of political posts:

“Justice for American consumers!”
“The tariffs are gone — prices will fall!”
“We’ve defeated economic tyranny!”
And if you listen closely, you might even hear a sound…
It’s the low hum of irony screaming into a pillow.

It’ll be a feel-good moment for exactly the wrong reasons.

Because here’s what’s actually going to happen:
The companies that paid those tariffs directly to the government — the importers of record, typically massive distributors and global intermediaries — will get billions in refunds.

The small manufacturers and wholesalers who bought from them at inflated prices?
Nothing.

The small businesses who had to choose between eating those costs or passing them on?
Nothing.

The consumers who unknowingly bore the downstream price increase?
Still nothing.

The only people getting a check are the ones who were already best positioned to absorb the cost in the first place.

And the cruel punchline?
Many of those same companies will have already passed on the cost to their buyers years ago — and will now pocket the refund anyway.

💸 The Sick Irony of It All

So when the headlines declare this a “win for the American people,” understand what’s really being celebrated:

A massive wealth transfer back to the very corporations who managed to monetize the tariffs on their way in and cash out on their way out.

It’s not consumer justice — it’s corporate rebate season.
And the politicians cheering about saving Main Street? They’re applauding the same mechanism that just extracted more value from it.

If you want to call that a victory, fine.
Just remember: every time the government and corporations high-five in the name of the “American people,” it usually means the American people are picking up the tab.

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