US tax & customs policy: effects on the German economy 

Comprehensive changes to customs and tax systems are imminent worldwide. The protectionist measures introduced by the USA under President Donald Trump are already having a noticeable impact on companies - and more could follow.
This raises key questions: Which new customs and tax regulations will apply in which countries in the future? What countermeasures are possible? How can the associated financial risks be minimized - or are there even opportunities to benefit from tax cuts?

Accordingly, companies are faced with the challenge of shaping their long-term planning in a highly volatile environment. The variables to be taken into account do not only affect the areas of production, sales and research & development. Group-internal transfer pricing models and customs strategies need to be reconsidered. Investors also expect transparent risk assessments and effective countermeasures. In addition, adapting corporate strategies often involves considerable effort and lengthy process changes.

Effects of US tax policy on companies

In order to minimize the impact on their business activities and take advantage of potential opportunities, companies must act proactively and prepare well. Various measures can be taken in this regard:

• Recording of relevant transaction flows and amounts: All relevant transaction flows and amounts should be captured in order to perform sound scenario analysis and simulations on customs and transfer pricing effects.
• Analysing the supply chain and possible additional customs duties: It is important to understand the entire supply chain and any associated additional customs duties on certain goods in order to be able to react to changes in a targeted manner.
• Use of free trade agreements (FTA) and preferential customs agreements: : Existing and new FTAs and preferential agreements should be examined as possible countermeasures against tariff impacts.
• Conducting location and localisation analyses, including a possible realignment of supply chains and production relocations: Investments, tax regulations, subsidies and timetables must be taken into account in order to develop the optimal location strategy.
• Monitoring regulatory developments: Companies should always stay informed about new customs, export control and tax regulations in order to react quickly to changes.
• Preparing for global minimum taxation Pillar Two: It is important to prepare for the implementation of global minimum taxation and optimize the tax strategy accordingly.

• Analysis of group-internal transactions, the transaction value as a basis for determining the customs value in order to optimise the assessment basis while ensuring arm's length transfer prices and taking into account customs value regulations.

• Review of the transfer pricing strategy: The group's internal pricing should be regularly reviewed and adjusted in order to take account of changed cost structures (e.g. as a result of increased customs charges), ensure arm's length profit allocations and thus avoid multiple charges.

• Operational transfer pricing: Transfer pricing specifications should be effectively integrated into daily processes in order to be able to react quickly and in accordance with the rules in the event of changes (e.g. due to changes in customs rates, new customs duties or tax laws).

Recommendations for action for German companies

Companies should regularly review and adapt their internal processes and systems to ensure that they comply with current legal requirements. This may include implementing new software solutions to better manage customs, transfer pricing and tax data. In addition, diversifying suppliers and markets can help to reduce the risk of dependencies and strengthen the company's resilience. By developing contingency plans and conducting regular risk assessments, companies can be better prepared for unforeseen events and respond more quickly. Ultimately, it is crucial to promote a culture of continuous improvement and adaptability within the company in order to be successful in the long term.