Who Bears the Burden of Trade Tariffs? An Analysis of Importer-Exporter Bargaining Power

Who actually pays the tariffs imposed by Donald Trump, and what should managers do about it? Contrary to political claims, tariff costs often fall on domestic consumers rather than foreign exporters. We develop a practical 2x2 framework combining price competitiveness with supplier replaceability to show where tariff burdens are likely to be and what responses fit each situation. Using smartphones and electric vehicles as illustrations, we show how bargaining power varies across products and trading partners. Managers should assess exposure early, communicate likely consumer impacts, seek exemptions where appropriate, and pursue phased supply chain reconfiguration rather than rushed localization.