Navigating US trade and tariffs: managing your impact

We offer a comprehensive range of services to help businesses navigate the rapidly evolving customs and trade landscape. Our  Trade Activator  service combines international trade and customs advice from our experts together with the latest technology. Using the power of advanced analytics across multiple data sources, we can assess your current position, in particular the impact of tariffs on your business. In addition, we can help you increase trade efficiency by identifying customs inefficiencies, limiting customs and excise duties and mitigating the risk of non-compliance. This will enable you to:

• understand the potential impact of import tariffs on your business, considering factors such as cost implications, inter-company pricing, supply chain disruptions and potential changes in customer demand 
• develop solution-oriented and sustainable strategies to mitigate the impact of import tariffs, such as exploring alternative sourcing options, renegotiating contracts or diversifying product offerings 
• understand the importance of the customs and trade function as well as cross-functional collaboration to ensure a full understanding of the potential impact and develop effective mitigation plans. 

Our customs and trade team is ready to help you understand these developments and how they impact your business. Contact us today to find out more about how our services can benefit your organisation in this challenging environment. 

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Our supply chain and operations consulting experts can help you map your physical and financial flows to quickly understand current tariff exposure and potential mitigation options in face of the anticipated changes due to US trade tariffs. We typically work in close alignment with our customs experts to assess preferred customs options and link tax concepts with regulatory, risk and general portfolio considerations. We can help you:

• analyse options for supplier diversification, with a focus on alternative suppliers in countries less affected by tariff changes 
• explore options to relocate production to or closer to the US with smaller tariff exposure 
• redesign shipping routes 
• adjust your inventory strategies 
• ramp down and ramp up new nodes in the supply network 
• restructure your overall value chain. 

Our supply chain and operations consultants are ready to work with you to prepare you for the anticipated changes which are likely to impact your overall tariff exposure in the very near future.

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The interplay between transfer pricing and customs valuation is crucial for vertically integrated companies as it ensures compliance with both tax and customs regulations. Transfer pricing refers to the pricing of goods, services and intangibles between related entities within a multinational enterprise. Customs valuation, on the other hand, determines the value of imported goods for the purpose of calculating customs duties. For vertically integrated companies, aligning transfer pricing policies with customs valuation methods is essential to avoid discrepancies that could lead to double taxation or penalties. In broad terms, by ensuring that the transfer prices are consistent with the arm’s length principle and are acceptable to customs authorities, companies can mitigate the risk of audits and disputes.

In addition, the alignment of transfer pricing and customs valuation helps vertically integrated companies optimise their supply chain and enhance operational efficiency. When transfer pricing and customs valuation are harmonised, companies can better manage their cash flow and reduce the overall tax burden. This alignment also facilitates smoother cross-border transactions and improves compliance with international trade regulations. For instance, consistent pricing strategies can help companies take advantage of preferential trade agreements and reduce customs duties. Ultimately, the integration of transfer pricing and customs valuation is a strategic approach that supports the financial health and competitive advantage of vertically integrated companies.

An increase in tariffs can significantly impact the cost structure of multinational enterprises, but this can be mitigated by adjusting the intra-group pricing of goods. For example, if a vertically integrated company faces higher tariffs on imported goods, it can reduce the transfer price of these goods between its related entities to the extent that the functions performed, the risks assumed and the assets owned are redeployed. By lowering the intra-group price, the customs value of the imported goods decreases, leading to a reduction in the overall tariff burden. This strategic adjustment helps the company maintain its competitive pricing in the market while ensuring compliance with both transfer pricing regulations and customs valuation rules.  

We support our clients in several key areas: 

• identifying options, opportunities and potential risks associated with changes to business models 
• assessing the feasibility of modifications in transfer pricing policies 
• quantifying changes and options at the management book, statutory accounts and corporate tax return levels 
• reflecting on the new transfer pricing policies in their accounting systems 
• engaging proactively with tax authorities 
• updating transfer pricing documentation reports and conducting benchmarking studies

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Pharmaceutical imports are crucial to the US. The proposed tariffs could have significant impacts on the cost, availability and quality of drugs, as well as the compliance and competitiveness of the US pharma industry. 

We are a trusted partner for pharmaceutical companies. Our subject matter experts have years of sector knowledge and extensive expertise to help you navigate this situation and provide strategic and operational solutions enabling you to mitigate the risks and seize the opportunities arising from the tariff changes. This will help you to: 

• understand the potential impact of import tariffs on your pharmaceutical products, considering factors such as increased regulatory compliance burdens and associated costs, market access, pricing, reimbursement and competitiveness – especially given the significant reliance on imports from the potentially affected countries  
• develop solution-oriented and sustainable strategies to mitigate the impact of import tariffs, such as exploring alternative regulatory pathways, optimising product portfolios or engaging with stakeholders and policymakers 
• understand the importance of the regulatory affairs function and cross-functional collaboration (e.g. customs, indirect taxes, direct taxes, transfer pricing and supply chain) to ensure a full understanding of the potential impact and develop effective mitigation plans. 

Our regulatory affairs team is ready to help you understand these developments and their impact on your business. We’ll also help you plan, execute and monitor strategies that are tailored to your business.  

Contact us today to learn more about how your organisation can benefit from our services in this challenging environment.

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Given the significant uncertainty surrounding additional US tariffs and possible retaliatory measures by their trading partners, defining scenarios is a proven, helpful approach. The impact of these scenarios on individual trade flows, such as Swiss pharmaceutical exports to the US, can be calculated using the Global Trade Analysis Project (GTAP) model. From the highly detailed GTAP database, which includes 65 product groups and 160 countries, a customised aggregation is created with a focus on relevant trade relationships.

The simulation results enable adjustment strategies to be evaluated and allow businesses to align their operations as effectively as possible with the new tariffs.

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