Companies need to develop a dedicated global trade function to navigate the future of trade and tax.
Global trade disruptions – the imposition of tariffs and renegotiations of existing, often long-standing trade agreements – are upending trade and tax norms. In turn these disruptions are significantly impacting customs, duties and supply chain and operating models of multinational companies.
“The global trade function has been overlooked in recent years,” says Dalton Albrecht, Global Trade leader for Canada, EY Law LP. There wasn’t a compelling need for companies to oversee these elements, so they didn’t.
But the environment has shifted.
Two developments that have marked this shift, according to Yoichi Ohira, Global Trade leader for Japan, Ernst & Young Tax Co., include Brexit and President Trump’s U.S.-first approach to trade policy. Countries have begun to compete with one another in a series of increasingly acrimonious trade disputes, with higher import duties being imposed on an ever-wider range of goods.
“Keeping up with the current and evolving state of trade is proving difficult, especially since change seems to be a daily occurrence,” says Armando Beteta, EY Global Trade services leader, Latin America Business Center.
Companies can manage these disruptions by staying agile and developing a dedicated trade function to monitor and respond to market changes. This will help decrease risks and increase opportunities.