Navigating the new tariff terrain: Insights from our US/EU trade tariffs seminar on 8 April 2025
Earlier this week, we hosted a seminar in Amstelveen on one of today’s most pressing trade developments: the newly implemented U.S. tariffs on imported products and the EU’s anticipated countermeasures. The event attracted tax, logistics and finance professionals from a wide range of industries—all looking for clarity in an increasingly complex international business environment.
The seminar featured a dynamic line-up of customs, tax and supply chain speakers – including Andrew Siciliano, KPMG’s Global Trade & Customs Practice Leader— who together explored the impact of U.S. and EU tariffs on EU companies, highlighting mitigation strategies from Tariffs, Tax and Supply Chain perspectives, while offering valuable insights into current market practices and how businesses are navigating these challenges.
State of play (8 April 2025)
On April 5, 2025, the U.S. declared a national economic emergency under the IEEPA and introduced a general 10% tariff on imports from all countries—excluding Mexico and Canada. Just days later, on April 9, an additional 20% “reciprocal” tariff was announced on goods from the European Union and other countries. While products such as steel, aluminum, and semiconductors are exempt due to existing Section 232 tariffs, the new measures are expected to significantly impact EU exporters.
As of today (10 April 2025) some of the tariffs have been suspended for 90 days.
Business impacts: Navigating the Challenges
As tariff rates increase, businesses face higher costs and supply chain disruptions resulting in a variety of business impacts. These changes can lead to greater tax complexity and operational expenses, while reducing supply chain flexibility.
Trade and tariffs are also pivotal in navigating complex tax, indirect tax and supply chains. For example, tariffs can alter the cost structure of imported goods, affecting transfer pricing, VAT, GST, and tax compliance strategies. Transfer Pricing must align with arm's length principles to avoid double taxation and manage cross-border costs. Intellectual property rights may need reassessment, impacting royalty payments. Withholding taxes may be payable when unbundling import prices.
Supply chain impacts include cost increases, alternative sourcing, and additional complexity to comply with new trade regulations to minimize disruptions. Businesses are advised to evaluate their exposure and explore mitigation strategies as transatlantic trade tensions evolve.
Key takeaways: The Road Going Forward for businesses and tax professionals
Mitigation strategies – it is still not too late to take steps
Businesses need a comprehensive and multidisciplinary strategy to effectively manage tariff disruptions. As tariffs evolve, exporters and importers must proactively address the impacts of new U.S. tariffs and res of the world countermeasures. By employing both short- and long-term duty mitigation strategies, companies can optimize tariff liabilities, strengthen supply chain resilience, and enhance their competitive position in the global market. During the seminar, Andrew Siciliano and team provided several mitigation strategies for businesses to manage the tariff disruptions, whilst shedding light on attention points in other areas, for example:
- “First sale for export” choice
- Reviewing the country of origin desgination for goods to benefit from preferential trade agreements and reduced duty rates
- Various supply chain strategies, such as foreign tolling arrangements or change of supplier entity
- Using the US Foreign Trade Zones (“FTZ”) to deter duty payment until foreign merchandise leaves the FTZ for US consumption, as FTZ are considered outside of US customs territory that importers can use to mitigate duties
- Breaking down the cost components of imported goods to identify non-dutiable costs and unbundling the costs such as freight, insurance and services, businesses can minimize the dutiable value and reduce overall duty payments (cost unbundling)
Supply chain strategies – “Take a holistic approach”
Johan Smits, partner of Global Strategy Group at KPMG, also provided insights regarding supply chain strategies to enhance business resilience and to mitigate the tariffs impacts. Johan told the audience during the Q&A session: “Take a holistic approach to deploy the supply chain strategies.” A holistic approach implies that businesses should also look at the customs planning, transportation, sourcing and pricing strategy, value chains, tax, and systems integration.
Penalties if errors are made
Andrew also mentioned that non-compliance can lead to penalties imposed retroactively for up to five years, with added interests on unpaid tariffs. Ensuring full compliance with the regulations is essential to avoid these penalties.
Outlook: preparing for increased audits
During the seminar’s Q&A session, Andrew mentioned that more audits on customs and tax compliance are expected in the near future, highlighting the importance of timely and thorough documentation to ensure full compliance of businesses, including preparing substantiations of cost unbundling, supply chain analyses, tariff analyses, substantiations of customs value and transfer pricing documentation.
For organizations navigating these complex landscapes, KPMG offers guidance to help you identify, navigate and accelerate offramps for the greatest value delivery. Our multidisciplinary and cross border teams are here to guide you through these changes, ensuring your business remains compliant, adaptable, and well-positioned in response to the evolving tariff landscape, avoiding that attention points fall through the cracks. Please reach out to our teams at KPMG for assistance in maximizing value delivery and maintaining a competitive edge in the global market.
