Chinese Manufacturers Expose Luxury Fashion In Response To The Tarrifs

[MichMan]

1. Here is what I don't understand

I thought tariffs were charged on the declared value of an item, not the retail cost.

Fictitious example. If a high end designer purse, for example, costs $40 to make and sells for $800, I believe the tariff is assessed on the $40. So, let's assume that the current 145% tariff stays in effect. That means the $40 purse gets a tariff of $58 making the cost now $98. It is still being sold for $800. Of course, there are marketing and distribution costs on top of production costs, but that still means the profit margin is very high. Even if the seller wasn't willing to eat the cost, the purse would be marked up to $858, not double like some people claim. Am I wrong?

Some people will pay a lot for perceived status. Not only in clothing, but also some of these high end liquor brands.