The recent tariff policies implemented by the United States have had a significant impact on global transfer pricing dynamics. The Trump administration introduced a series of tariffs that transformed the landscape of international trade. Although some of these policies have since been modified, the legacy of this protectionist approach is still evident in 2025.
In this context, U.S. tariff measures—combined with retaliatory responses from other nations—remain a source of uncertainty and volatility across global supply chains. This situation forces companies to operate in a constantly changing environment, where competitive advantages can quickly fade and supply strategies must be continually reviewed and adapted.
The impact of this tariff scenario on transfer pricing is profound and manifests in several areas:
Changes in costs and margins
Tariffs artificially increase the costs of imported intermediate and final goods. This directly affects the gross margins of companies involved in international supply chains. Transfer pricing policies must be adjusted to reflect these new economic conditions while maintaining alignment with the arm’s length principle. Determining how the increased costs should be allocated among related entities becomes a complex task.
Review of functions, assets, and risks (FAR)
The imposition of tariffs may force companies to alter their operating models. For instance, shifting production to non-tariffed countries or finding new suppliers can result in changes to the functions performed, assets used, and risks assumed by different entities within the corporate group. These changes must be accurately reflected in transfer pricing policies.
Effect on competitiveness and intangible asset valuation
Tariffs can reduce the competitiveness of companies that rely on taxed imports. This, in turn, may impact the profitability of intangible assets related to those products or markets, such as brands or intellectual property. Valuing these intangibles for transfer pricing purposes becomes more complex in a tariff-heavy environment.
Increased complexity in transfer pricing methods
The use of traditional transfer pricing methods—such as cost-plus or resale price—can be hindered by market price distortions caused by tariffs. Companies may need to explore more sophisticated methods or apply significant adjustments to ensure compliance with the arm’s length principle.
Greater risk of tax disputes
The lack of clarity and complexity of the tariff environment increases the likelihood of disputes with tax authorities in different jurisdictions. Solid documentation and strong economic justification of transfer pricing policies are essential to mitigate this risk.
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From tariff-related issues to complex cross-border structures, our team combines technical expertise with strategic insight to support you through every challenge.
