Tariff Cost Passthrough Calculator

News reports a tariff percentage, but nobody translates that into what it actually adds to the price you pay. Enter a product's import cost and the tariff rate to see the real dollar increase. Nothing uploaded.

Tariff cost per unit Passthrough rate ? Estimated price increase New estimated retail price

Tariff Impact

Tariff cost per unit
-
Estimated price increase
-

New Estimated Price

Enter a current retail price to see the new estimated price and percent increase.

Tariff costs and passthrough economics

How tariffs translate to price increases

When a product with a $20 wholesale cost faces a 25% tariff, the tariff cost is $5 per unit ($20 × 0.25). But that $5 doesn't always become a $5 price increase. A retailer might add more markup to maintain profit margin, or absorb part of it. At 100% passthrough, the price goes up exactly $5. At 50% passthrough, the retailer absorbs half, so the price only increases $2.50. At 120% passthrough, the retailer marks it up more to keep profit dollars constant, adding $6 instead of $5.

Understanding passthrough rates and profit margins

If a retailer normally marks up a product by 50%, they aim for $30 retail (cost $20 × 1.5). When the tariff adds $5, they don't want their margin to shrink to $5. They might increase the retail price by $7.50 to keep the 50% markup ratio intact (120% passthrough of the $5 tariff cost). Retailers with fixed-dollar markups (e.g. always $10 profit per item) will pass through less than 100%. Those targeting fixed margins pass through more.

FAQ

Why would a retailer pass through more than 100%?

If they want to maintain a percentage-based markup on cost, they have to increase the retail price by more than the literal tariff amount. For example, a doubling of the wholesale cost (from $20 to $40 due to tariffs) would force a retailer to double the retail price too, to keep the same markup percentage.

Can passthrough be less than 100%?

Yes. Some retailers absorb tariff costs to stay competitive or maintain customer loyalty. Budget retailers especially absorb tariffs because their customers are price-sensitive. Luxury retailers often pass through 100% or more because their customers are less price-sensitive.

What passthrough rate should I use for my product?

If you're a retailer, 100% is a safe conservative estimate (your costs go up, prices follow). If you want to see best- or worst-case, try 80% (retailers absorb some) and 120% (margin preservation). For specific industries, look up typical markups - groceries are thin margin (maybe 100-110% passthrough), electronics are higher margin (maybe 90-95% passthrough).

Last reviewed: June 21, 2026