I recently went to a clothing store and bought a pair of khaki pants for $76. They were tan, fit well, but I digress. That $76 represents the Total Cost of Goods.

In the context of importing, the Import Cost refers specifically to the price paid to a foreign supplier for the goods themselves. The Total Cost of Goods, however, includes all expenses incurred to get those goods to their final destination, ready for sale. These expenses may include:

• Initial purchase price
• Shipping
• Customs duties
• Insurance

Understanding the full cost is key to knowing where tariffs actually apply.

In my example, the new 15% tariff recently signed between the EU and the U.S. applies only to the cost of goods estimating around $21, not the retail price of $76. That means the tariff is based on a much lower dollar amount—specifically, the price paid to the foreign supplier, not the final selling price to the consumer.

It’s a huge week for inflation, jobs report and the Feds meet.

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