As the Supreme Court of the United States (SCOTUS) considers the legality of Trump tariffs under the IEEPA, including V.O.S. Selections, Inc. v. United States and Learning Resources, Inc. v. Donald Trump, it is important to consider how tariffs have impacted general business and tax strategy, as well as the path forward for 2025.
Key Takeaways for How Tariffs Have Impacted General Business and Tax Strategy:
- Supply chain disruption and the need to seek alternative suppliers and new markets have consumed many business leaders in 2025.
- Tariffs have created substantial accounting and tax issues for many U.S. businesses, and tax reporting and compliance for 2025 will be a considerable challenge, regardless of SCOTUS’s decision.
- Political realignment associated with the European Union (EU), Canada, and Mexico may have long-lasting implications for U.S. businesses.
Supply Chain Renegotiation and Realignment In a Season of Tariffs
What impact have tariffs had upon supply chains here in the United States and around the world? Most industry experts summarize the effects in two words: renegotiation and realignment. For example, according to multiple industry sources, the majority of consumer goods businesses have been forced to renegotiate contracts with their suppliers, while shifting sourcing to alternative domestic sources and those in nations with advantageous trade agreements with the United States.
Other industries find it difficult (if not impossible) to obtain primary components or products from different sources, resulting in substantially increased costs and a nearly universal business challenge: accounting and tax compliance in an age of tariffs.
The Tax Implications of International Tariffs for all U.S. Businesses
Many business leaders have underestimated one of the larger challenges of how tariffs have impacted general business and tax strategy: accounting and tax compliance. What is the challenge of simply recording tariff expenses as they are incurred? What is the impact of a substantial residual expense at year-end for tariff expenses associated with unsold inventory remaining on hand in the warehouse?
Many are unaware that, for most import businesses, tax preparation will require the application of UNICAP rules, resulting not only in an increase in taxable income but also in a reduction in Cost of Goods Sold (COGS). Business leaders navigating the impacts of tariffs now and after the SCOTUS decision should consult external integrated tax and accounting firms to reduce negative financial impacts while increasing opportunities to compete and grow.
The Realities of Political Realignment in 2025
What are the lasting realities of political realignment in 2025? How, then, should you lead in such an uncertain climate?
The European Union has responded to U.S. tariffs by realigning existing trade agreements with South America, Indonesia, and even Mexico, and substantial progress on access between specific EU markets and India has resulted in increased access to each other’s markets. India has already realigned much of its former trade with the U.S. toward China.
What of the USMCA (or, as Canada calls it, the CUSMA) agreement, and the impact of Trump tariffs on Canada and Mexico? Is “nearshoring” the answer to how tariffs have impacted general business and tax strategy for U.S. companies?
Canada, historically one of the U.S.’s closest trade and military allies, has been forced to “fundamentally reimagine” (in the words of Canada’s new Prime Minister, Mark Carney) its economic, trade, and even military strategies and alliances. “Uncertainty” has become a much more common word in Canadian investment and business projections and earnings calls. Canadians have actively rejected U.S. products, shifting to domestic options, even if they are more expensive. Even Canadian tourism in the U.S. has plummeted, with an estimated $5.7 billion in losses, according to the U.S. Travel Association.
In contrast to Canada, Mexico has replaced Canada as the largest importer of U.S. goods and the largest supplier to U.S. companies (as of August 2025). The recent extension of tariff relief for Mexico and ongoing talks may reflect the present administration’s perspective on the future. It may also be perceived as leverage in bilateral discussions between the U.S. and Canada, as well as the USMCA.
How Tariffs Have Impacted General Business and Tax Strategy Heading Into 2026
The impact of tariffs in 2025 has shifted business reality for many U.S. companies. How will your supply chain management strategies shift once the outcome of the trade case before SCOTUS is decided? How will your organization accurately account for the impact of tariffs and other costs of business and even associated losses in 2025?
The rewards and risks of international business and tax are often a delicate balance, and the scale tips toward gain when your company is well-positioned, organized, and capturing the data and information necessary to inform your corporate decisions.
Allen Barron is uniquely positioned to support you through these times. Our unique blend of business, legal, tax, and accounting expertise, combined with our depth of experience in managing multinational companies and international tax, provides deeper insight into any issue, question, or challenge.
We leverage economies of scale while providing our customers with insight from a much broader, higher perspective. A business attorney has no idea how an organizational decision may affect taxation in multiple markets around the world, nor the accounting challenges or business complications that might arise.
Our experts bridge these disciplines to help our clients understand the impact across all aspects of the organization and how to maximize opportunity and profitability, while reducing risk. We invite you to learn more about the integrated tax, legal, accounting, and business consulting services of Allen Barron and contact us or call today to schedule a free consultation at 866-631-3470. Let’s open a conversation about your goals and how Allen Barron can contribute to the success of your corporation in the coming months and years.
Domestic, international, and cross-border business success in 2026 will continue to require accurate, quick, insightful, and informed decisions on a moment’s notice. SCOTUS’ tariff decision will obviously have an immediate impact on every aspect of most companies’ business, tax, and accounting strategies for the coming year. You will need an integrated business partner who can help you accurately assess conditions, adjust the existing plan, and balance financial and tax implications with business realities.
