Who ultimately ends up paying tariffs?

The correct answer indicates that consumers ultimately end up paying tariffs because tariffs are taxes imposed on imported goods. When a government applies tariffs, they increase the cost of these goods, which affects pricing throughout the market.

Producers may initially bear some of the burden of the tariff by facing increased costs, but in a competitive market, they typically pass these costs onto consumers in the form of higher prices for their products. Consumers, in turn, are left paying these higher prices for imported goods or even for domestic products that face less competition due to the tariffs.

This phenomenon demonstrates the relationship between tariffs and consumer pricing: while the government collects the tariff revenue, and producers may experience changes in their profit margins, it is ultimately the consumers who finance these tariffs through the increased prices they pay in the marketplace. Therefore, the burden of tariffs falls on consumers, making them the ones who ultimately shoulder the cost.