Instead of immediately passing tariff costs to consumers, US corporations are initially absorbing the shock. They are mitigating the impact by reducing labor costs and accepting lower profitability, which explains the lag between tariff implementation and broad consumer inflation.

Flexport CEO Ryan Peterson reveals that high tariffs incentivize foreign companies to under-declare goods' value. The U.S. uniquely allows imports without a local entity, meaning there's little recourse when fraud is discovered. This creates a significant competitive disadvantage for American companies that follow the rules.

Economic analysis debunks the political claim that foreign nations pay for tariffs. In reality, there is a near-complete cost pass-through to American buyers. U.S. consumers ultimately shoulder 96% of the tariff burden through higher prices, while foreign firms absorb only a negligible 4%.

The proposal to levy tariffs and then issue rebate checks is economically nonsensical. It creates massive bureaucratic leakage, making it more efficient to simply not have the tariffs. Furthermore, the policy uncertainty paralyzes businesses, creating non-economic costs that are more damaging than the direct financial impact of the tariffs.

The Supreme Court ruling will trigger two massive waves of litigation. First, hundreds of thousands of companies will sue for refunds on billions in illegally collected tariffs. Second, new tariffs imposed under different authorities will face country-by-country legal challenges, creating a sustained boom for trade lawyers.

Despite having no legal claim, large retailers like Walmart are pressuring their suppliers to share tariff refunds. They use their immense purchasing power as leverage, threatening to delist products if suppliers don't share a portion of the government payout.

A secondary market for tariff refund claims saw prices leap from 25 to 52 cents on the dollar immediately after the Supreme Court ruling. This reflects a rapid repricing of legal risk, with some CEOs now considering selling their claims for 70 cents.

If tariffs are reduced following a court ruling, companies will experience immediate cost relief. However, these savings are passed to consumers slowly, over two to three quarters. This delay creates a temporary tailwind for corporate profit margins before prices on the shelf fall.

The share of U.S. trade using a foreign 'importer of record' more than doubled from 9% to 20% since last April. This structure creates a significant incentive for tariff fraud by allowing overseas factories to potentially undervalue goods upon import.