Teen Vogue gets it wrong: The truth about business profits and tariffs

January 6, 2025

By Tim Worstall

Teen Vogue misguides its young audience with a flawed explanation of tariffs and coffee shop profits. They claim tariffs could raise coffee costs from $5 to $8, reducing profits and forcing price hikes to $15. This is grossly inaccurate.

In reality, coffee beans in a shop cost around $0.25 to $0.50. Tariffs might slightly increase this, but most costs—like rent, labor, and equipment—are unaffected. No coffee shop has a 50% profit margin. Even Starbucks operates at about 10%.

Such misconceptions fuel public misunderstandings about business. Many believe grocery stores have 35% profit margins, but the reality is just 2.5%. Politicians exploit these falsehoods, blaming profits for inflation instead of monetary policies.

Teen Vogue, aiming to “educate future influencers,” should prioritize accuracy. Grossly overstating profits misleads readers and distorts economic understanding.

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