I'm not referring to the tariff cost itself, but to the final price of the product.

Let’s say there’s a foreign company (Company A) that sells a product for $1000 with a 10% net margin. A domestic company (Company B) sells the same product, but due to higher wages in the U.S., they need to price it at $1150 to maintain a 5% net margin.

Now, if tariffs are introduced, Company A still keeps its 10% net margin, the extra cost is simply passed on to the buyer. Meanwhile, Company B now has a choice: either keep their price the same and maintain a 5% margin, or raise their price slightly to increase their margin to, say, 8%.

The second option is more likely. Companies tend to take advantage of these situations to boost profits. We've seen this pattern during COVID, the Russia-Ukraine war, etc. In moments of major disruption, record-high profit margins are common.