Transfer Pricing, Customs Valuation & Tariffs: Bridging the Gap with Alex Martin

Episode: Simply Trade #413 Hosts: Andy Shiles & Lalo Solorzano Guest(s): Alex Martin, Transfer Pricing Specialist, KBKG Published: December 18, 2025 Length: ~37 minutes Presented by: Global Training Center Episode Summary 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. Key Takeaways 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 Who Needs to Be at the Table? 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.   🔍 Transfer Pricing Insights from Alex Martin (KBKG) 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 https://www.kbkg.com/feature/higher-tariffs-are-on-the-way Free Webinar (CPA Academy): Transfer Pricing & Tariff Savings Strategies https://www.cpaacademy.org/s/webinar/a0DQh00000ZyzPXMAZ/transfer-pricing-and-tariff-savings-strategies Article: Higher Tariffs Are on the Way https://www.kbkg.com/feature/higher-tariffs-are-on-the-way Free Webinar (CPA Academy): Transfer Pricing & Tariff Savings Strategies https://www.cpaacademy.org/s/webinar/a0DQh00000ZyzPXMAZ/transfer-pricing-and-tariff-savings-strategies   📚 Resources & Mentions KBKG – Transfer Pricing & Tax Advisory https://www.kbkg.com/ Alex Martin – LinkedIn Alex Marting YouTube videos U.S. Customs Valuation Methods (WTO / CBP) https://www.cbp.gov/trade/valuation IRS Transfer Pricing Overview (Section 482) https://www.irs.gov/businesses/international-businesses/transfer-pricing Global Training Center – Customs Valuation E-Learning Course https://www.globaltrainingcenter.com/ Foreign Trade Zones (U.S. FTZ Board) https://www.trade.gov/foreign-trade-zones 📢 Subscribe & Follow Stay connected with the Simply Trade community: LinkedIn – Global Training Center https://www.linkedin.com/company/global-training-center?utm_source=SimplyTradePodcast YouTube – Simply Trade Podcast https://www.youtube.com/@SimplyTradePod?utm_source=SimplyTradePodcast Spotify – Simply Trade https://open.spotify.com/show/09m199JO6fuNumbcrHTkGq?utm_source=SimplyTradePodcast Apple Podcasts – Simply Trade https://podcasts.apple.com/us/podcast/simply-trade/id1640329690?utm_source=SimplyTradePodcast Trade Geeks Community https://globaltrainingcenter.com/portal/?utm_source=SimplyTradePodcast