[ggalanis]

Originally Posted by darylp310

You're right that it will go up, but ~10% is more likely since the tariff is on the importers cost not directly on the MSRP.

(There’s not necessarily a linear relationship between the wholesale cost and retail price. )

I have a crazy idea! Since BMW US (importer) is wholly owned by the the German entity BMW AG, I wonder if there’s a clever way for them to just lower invoice price to reduce the impact of the tariff?

For example, instead of paying $60K to import an $80K iX, BMW AG would reduce the import cost to $10K, so the tariff would be only $2,500 instead of $15,000.

The profit would stay in the US entity, but accounting wise, as a subsidiary the P&L boost still helps the BMW AG parent company financials in the same way. Also, BMW US can just pay a "license fee" or something to repatriate the money back to Germany, etc.

There's going to be so much clever financial engineering by MBAs and CPAs of these international conglomerates to avoid paying these tariffs.

That's called Fraud.
Enjoy your new taxes.