Episode: Simply Trade #413

Alex Martin, Transfer Pricing Specialist, KBKG

Tariffs have changed everything — and many companies are still missing the second-order effects.

In this episode, Andy and Lalo sit down with Alex Martin of KBKG to unpack one of the most misunderstood (and increasingly risky) intersections in global trade: transfer pricing and customs valuation.

As tariffs rise from single digits to 25%, 50%, and beyond, decisions once made solely by tax or finance teams now carry massive customs consequences. Alex explains how multinational companies are getting “whipsawed” between Customs and the IRS — one pushing values up for duty, the other pushing values down for income tax.

This conversation makes one thing crystal clear: customs, tax, finance, and compliance can no longer operate in silos.

Whether you’re an importer, trade compliance professional, CFO, or tax leader, this episode highlights why cross-functional coordination is now essential — not optional.

Transfer pricing impacts both customs duties and income tax — often in conflicting ways

Rising tariffs have turned valuation into a material financial risk, not an academic exercise

Customs looks at transactions line-by-line, while tax authorities focus on annual results

CFOs and tax directors must now actively engage with trade compliance teams

Poor coordination can increase audit risk, cash-flow pressure, and margin erosion

Programs like FTZs, bonded warehouses, drawback, and cost bifurcation can help mitigate exposure

Asking for transfer pricing documentation is a powerful first step for trade teams

This episode stresses the importance of assembling a multi-disciplinary team, including:

Trade Compliance

Tax & Transfer Pricing

Finance / CFO leadership

Accounting (AP / AR)

Pricing & Sourcing

International affiliates and parent companies

If tariffs have changed your margins, they’ve already changed your tax picture — whether you’ve addressed it or not.

Strategic transfer pricing adjustments can reduce customs duties by lowering inventory values and separating non-dutiable management fees

Many companies overlook the income tax benefits of transfer pricing, especially when foreign entities are profitable while U.S. operations show losses

Transfer pricing changes can significantly lower a company’s global effective tax rate when aligned correctly

KBKG regularly hosts transfer pricing education sessions to help trade professionals understand intercompany pricing from a tax perspective

KBKG also supports companies with R&D tax credits, cost segregation, and green energy incentives, alongside transfer pricing services

Learn more:

Article: Higher Tariffs Are on the Way

Free Webinar (CPA Academy): Transfer Pricing & Tariff Savings Strategies

Article: Higher Tariffs Are on the Way

Free Webinar (CPA Academy): Transfer Pricing & Tariff Savings Strategies

KBKG – Transfer Pricing & Tax Advisory

Alex Martin – LinkedIn

U.S. Customs Valuation Methods (WTO / CBP)

IRS Transfer Pricing Overview (Section 482)

Global Training Center – Customs Valuation E-Learning Course

Foreign Trade Zones (U.S. FTZ Board)

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Trade Geeks Community