No. of Recommendations: 1
Sales will go down as the price has gone up. So why will BMW be able to absorb $5,000 extra cost on lower sales? It doesn't seem like Economics 101 to me.
I don't know what will happen, that's why I mentioned both cases.
Right now, the BMW 228 starts at $39,600. If they have to pay ~$10k tariff when new ones are shipped next week (or next month, whenever they run out of stock), then they need to decide what to do. If they raise the price to $49,500, they may not have any customers at all anymore, so they may choose to eat part of the tariff so they can at least have some sales. Economics 101 - the price of ANYTHING is what a willing buyer will pay a willing seller. We will have to wait and see what happens.
