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Adding to the complexity, today’s global economy has made the relationship between trade and transfer pricing increasingly important. As companies navigate the intricacies of international trade, they must understand the interdependencies and differences between customs (duties and tariffs) and transfer pricing and what they mean for businesses’ supply chains. This article examines common manufacturing and supply chain models across several industry sectors, highlights where tariffs could affect operations and offers potential guidance on addressing these challenges.
The evolving international trade landscape, marked by recent tariff developments, presents both challenges and opportunities for businesses navigating their supply chains. Understanding the intricate relationship between customs duties, tariffs, and transfer pricing is no longer optional; it is essential for maintaining operational efficiency and profitability. By understanding and actively analyzing transfer pricing and trade policies, companies can scenario-plan and be prepared to respond to dynamic changes in the trade environment. While several actions take time to implement because of the operational, information technology, or cross-functional business requirements, they should be evaluated and prioritized on companies’ planning scorecards, as appropriate.