It's not a theory -- every business that imports product from international sellers is staring at their current import prices and their remaining pre-tariff inventory numbers right now. (See the huge import volume burst pre-tariffs)
What they're trying to decide is (a) do they eat the cost of tariffs in margin or (b) do they raise prices?
That's a decision that doesn't need to be made until they burn through warehoused inventory, but for high-volume businesses (read: retail) it's measured in months at most.
Once that hits, either (a) or (b) will be chosen, and neither is great for equities markets / the economy.
Moreover, there's no "hiding this under the rug" once publicly traded companies begin to report quarterly financial results AFTER burning through their pre-tariff inventory. They can't not explain to their shareholders why they've taken a hit to profitability.
Best possible case is retail prices rise, once, by the amount of tariffs, and that's that.
But a 15%+ price hike is going to be an uncomfortable narrative for those in power who insist tariffs won't raise prices... so I'm not betting that conversation goes logically.*
* See the reaction part of Amazon got when they "accidentally" line-itemed tariff charges as evidence on how dangerous the administration sees transparency around tariff costs