Tariff Cost & EPS Impact Calculator
Use an effective tariff rate tied to actual product classification and origin. Policy announcements alone do not establish company exposure.
What it calculates
A headline tariff rate does not translate one-for-one into company earnings. This model applies a tariff to the imported share of cost of goods, then reduces the burden for pricing pass-through and mitigation to estimate absorbed cost and EPS impact.
How this tariff cost & eps impact calculator works
The calculator applies the effective tariff to imported COGS, removes the portion passed to customers, applies a separate mitigation rate, and divides the remaining cost by diluted shares.
Formula
Absorbed cost = COGS × import share × tariff rate × (1 − pass-through) × (1 − mitigation)
Country of origin, exemptions, inventory timing, transfer pricing, contracts, retaliation, demand elasticity, and tax effects can materially change the outcome.
Before you use the result
Assumptions
- • Imported COGS and tariff classification are estimated consistently.
- • Pass-through does not reduce demand or volume in the modeled period.
- • Mitigation is separate from customer pricing and does not create offsetting costs.
Quick start
- 1. Estimate exposed COGS from filings and supply-chain evidence.
- 2. Use applicable effective tariff rates rather than headline maximums.
- 3. Stress pass-through, volume loss, sourcing changes, timing, and currency offsets.
Inputs and units
| Input | Unit | Default |
|---|---|---|
| Annual cost of goods | US$ millions | $5B |
| Imported share of COGS | percent | 35% |
| Effective tariff rate | percent | 15% |
| Customer price pass-through | percent | 50% |
| Sourcing and other mitigation | percent | 20% |
| Diluted shares | millions of shares | 500 million |
Worked example (hypothetical)
Tariff Cost & EPS Impact Calculator: worked example
Hypothetical example using the calculator's default inputs. The numbers are illustrative, not a forecast or a quote.
| Annual cost of goods | $5B |
|---|---|
| Imported share of COGS | 35% |
| Effective tariff rate | 15% |
| Customer price pass-through | 50% |
| Sourcing and other mitigation | 20% |
| Diluted shares | 500 million |
| Company-absorbed annual cost | $105M |
|---|---|
| Gross tariff cost | $262.5M |
| Estimated EPS impact | -$0.21 |
With these inputs, the company-absorbed annual cost is $105M.
Frequently asked questions
Who pays a tariff?
The importer generally pays the duty initially, but the economic burden can be shared through supplier concessions, customer pricing, lower margins, or lower volumes.
Why use imported COGS instead of revenue?
Tariffs apply to covered imported goods, so the cost base is a closer starting point than total sales.
Does pass-through preserve profit?
Not necessarily. Higher prices can reduce demand, change mix, or provoke competitive responses.
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