US Reciprocal Tax Policy: Key Considerations for Global Businesses

The Trump administration’s approach to trade and related tax issues — emphasizing reciprocal tariffs and increased scrutiny of VAT systems, subsidies and nonmonetary trade barriers — signals a more aggressive U.S. trade and tax policy approach.[1] Combined with broader geopolitical tensions, ongoing Section 301 tariff reviews, a new “America First Investment Policy,”[2] and expanding industrial policies like the CHIPS Act and IRA,[3] this shift introduces new complexities for global businesses. While there appears to be a degree of unpredictability in particular actions, there is an underlying focus on applying the spectrum of U.S. policy tools to address what the administration regards as disadvantageous trade and tax relationships, particularly with states regarded as strategic competitors or adversaries.

The renewed focus on trade deficits, reshoring and national security concerns could lead to higher tariffs,[4] intensified enforcement and potential retaliation from key trading partners, all of which could have significant implications for supply chains and market strategies.

Key Considerations for Businesses

• Trade Policy Risks: Heightened trade enforcement could lead to retaliatory measures from other countries, adding complexity to trade flows and disrupting existing agreements and market access. Companies need to anticipate potential countermeasures and adjust trade strategies accordingly.
• Supply Chain Impact: Businesses should assess their exposure to potential tariffs and evaluate alternative sourcing strategies to mitigate risk. Strengthening supply chain resilience will be critical in adapting to evolving trade restrictions and shifting cost structures.
• Regulatory and Compliance Pressures: Increased scrutiny of VAT systems, subsidies and nonmonetary trade barriers may necessitate adjustments to pricing models, import/export strategies and overall compliance frameworks to remain competitive and avoid penalties. Conversely, the new administration’s leveraging tax policies to incentivize domestic investment will provide additional considerations to pricing models.
• Market and Investment Strategy: The push for onshoring and domestic production, and for ensuring that U.S. inbound and outbound investment is not a vector for national security exploitation, will impact foreign investment review. This reality needs to be accounted for in investment strategy, design and decision-making; operational footprints; and capital expenditures and plans, with corresponding strategy reevaluation by companies, investors and advisors.

How A&M Can Help

A&M provides a holistic, one-firm approach to trade and tax strategy, combining deep expertise in global trade compliance, tax policy and supply chain optimization, and operational and compliance risk management. Our team helps businesses understand regulatory and policy shifts, conduct diligence to identify risk, assess trade and tax policy impact, and implement agile strategies to adapt to and navigate a dynamic operating environment. Through scenario modeling, diligence, tariff impact assessments, and risk reduction frameworks, we enable clients to stay ahead of potential disruptions and seize new opportunities in an increasingly complex global market.

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