The impact of tariffs on trade and risk reduction

In international trade, trade tariffs are not just duties on importing or exporting goods. They are a complex system of instruments, including:

Ad valorem and specific duties (a percentage of value or a fixed rate per unit of goods),
Seasonal tariffs,
Tariff quotas,
Antidumping measures,
Tariff escalation (higher rates on higher value-added products).

Each of these instruments affects cost structure, margins, and the investment attractiveness of a business.

For example, when working with the EU at COREDO we repeatedly encountered situations where changes in EU trade policy required revising contractual terms and optimizing logistics, up to choosing alternative supply routes and re-exporting through free economic zones (FEZ).

In Asia, tariff policy is highly variable: some countries pursue liberalization, while others have strict import duties and non-tariff barriers.

COREDO’s experience in company registration in Singapore and Hong Kong shows that the right choice of jurisdiction allows significantly reducing tariff costs and taking advantage of tariff preferences under bilateral trade agreements.

The impact of trade barriers on business

Trade barriers today are not only tariffs but also non-tariff restrictions: Licensing, technical regulations, quotas, currency controls, as well as EU and US sanctions regimes.

The consequences for business can be dramatic: from payment blocks and asset freezes to loss of access to key markets.

The COREDO team implemented projects where sanctions screening of counterparties and the implementation of automated compliance procedures enabled a client to avoid fines and preserve their reputation in the international market.

Such measures are especially relevant for companies working with high-risk markets or in sectors subject to export controls (for example, technology, finance, energy).

Sanctions often lead to the need for urgent restructuring of supply chains, diversification of export and import channels, and the implementation of Due Diligence to assess tariff and sanctions risks at the deal-closing stage.

Tariffs of the EU, Asia and Africa: comparison

Let’s consider the key differences in tariff policy and their impact on company registration and market entry strategy:

Region	Main tariff barriers	Regulatory features	impact on business
EU	Customs duties, sanctions, anti-dumping measures	Strict compliance and AML, transparent registries	High protection, but complex reporting
Asia	Variable tariffs, non-tariff barriers	Differences between countries, emphasis on localization	Opportunities for optimization, but risks of currency volatility
Africa	Import duties, quotas, currency controls	Fast registration, but complex tax regimes	Growth prospects, but high regulatory risks

COREDO’s practice confirms: when registering legal entities in Asia and Africa it is necessary to consider not only tariff levels, but also the specifics of currency controls, requirements for corporate structuring, and the availability of tariff preferences.

In the EU, special attention is paid to legal support of business and compliance with compliance standards, which is critical for access to European payment systems and the stock market.

Tariffs for business: risks and impact

Illustration for the section «Tariffs for business: risks and impact» in the article «The impact of tariffs on trade: how to reduce risks»

Tariffs for business are not just regulated rates, but a significant factor that shapes risks and directly affects companies’ competitiveness.

Their changes can create both financial costs and market uncertainty, which is especially important to consider in strategic planning.

Tariff implications for business

Tariff risks for business manifest in reduced margins, increased operating costs and the need to revise business models.

Assessment of ROI when tariff rates change,
Analysis of business sensitivity to tariff changes,
Scenario modeling for strategic planning.

At COREDO we use a comprehensive analysis of tariff consequences for companies, including:

Assessment of ROI when tariff rates change,
Analysis of business sensitivity to tariff changes,
Scenario modeling for strategic planning.

For example, when working with exporters in the EU the COREDO team developed methods to minimize tariff costs by optimizing holding structures, using FEZs and implementing hybrid financial instruments to hedge currency and tariff risks.

Currency risks and logistics with new tariffs

Currency volatility and rising tariff rates often lead to the need to revise logistics schemes.

COREDO’s experience has shown that multichannel logistics and currency hedging can significantly reduce the impact of tariffs on logistics and ensure the resilience of supply chains.

For international companies, critical are:

Managing currency flows,
Optimization of foreign trade expenses,
Using alternative supply routes when tariff policy changes.

In several cases COREDO’s automation of tariff change monitoring and integration of ERP systems with customs services allowed clients to respond promptly to regulatory shifts and minimize logistics risks.

Consequences of tariff wars for business

Tariff wars between major economies lead to market volatility, increased inflationary risks, and reduced investment attractiveness of several industries.

COREDO analytics shows that in 2025 the greatest vulnerability to new tariffs will remain with:

The automotive industry,
Electronics,
The agricultural sector,
Financial and payment services.

Scenario planning and stress-testing of trade models are becoming mandatory tools for companies focused on long-term development amid unstable trade policy.

Reducing risks in international trade

Illustration for the section «Reducing risks in international trade» in the article «The impact of tariffs on trade: how to reduce risks»

Reducing risks in international trade requires a comprehensive approach that takes into account the specifics of foreign economic transactions and potential threats at every stage of working with foreign partners.

Rational management of these risks begins with optimizing tariff and foreign trade expenses, which not only increases business resilience but also reduces the likelihood of financial losses.

Practical methods for minimizing tariff costs include:

Optimization of tariff and foreign trade expenses

Using tariff preferences under trade agreements,
Trade diversification: entering new markets with lower tariffs,
Optimizing supply chains and choosing alternative routes,
Using re-export through jurisdictions with preferential regimes.

At COREDO we have repeatedly helped clients choose optimal export and import schemes, taking into account not only trade tariffs but also non-tariff barriers, currency and tax risks.

Understanding tariff and non-tariff barriers plays a key role in the efficiency of international trade, and it is equally important to consider compliance, AML and due diligence issues: we will examine their differences in detail in the next section.

Compliance, AML and due diligence: what’s the difference?

Compliance and AML for companies are becoming an integral part of managing trade risks. The solution developed at COREDO includes:

Implementing compliance procedures when working with tariffs and sanctions,
Conducting due diligence in international trade,
Sanctions screening of counterparties and automation of compliance processes.

These measures not only reduce sanction-related and tariff risks, but also ensure legal protection of the business when operating under tightening regulatory requirements.

Managing tariff risks: automation and digitalization

Modern digital tools allow automating the monitoring of tariff and sanction changes, integrating ERP systems with customs and payment services, as well as performing trade analytics and forecasting tariff trends.

In one of COREDO’s cases, automating the monitoring of tariff changes allowed the client to reduce reaction time to new regulatory requirements from several weeks to one or two days, which is critical for maintaining competitiveness in rapidly changing markets.

Company registration in the EU, Asia and Africa: tariffs and laws

Illustration for the section «Company registration in the EU, Asia and Africa: tariffs and laws» in the article «The impact of tariffs on trade: how to reduce risks»

company registration in the EU, Asia and Africa is not just a formal procedure but a strategic step that determines the conditions for doing business, its taxation and legal protection.

Registering a business in different countries

company registration in the EU, Asia and Africa requires a deep understanding of local regulatory nuances, including:

Requirements for foreigners and ownership structure,
Licensing of certain types of activities (banking, crypto, payment, forex services),
Features of corporate structuring and beneficiary control (UBO).

COREDO’s practice shows: in the EU transparency of company registers, compliance with AML standards and the presence of a compliance officer are crucial. In Asia: speed of registration, flexibility of tax regimes and the possibility of using SEZs to optimize tariff and tax costs.

How to choose a jurisdiction for business and taxes

The choice of jurisdiction for company registration should take into account:

The size and structure of tariff barriers,
Tax planning and transfer pricing,
Availability of tariff preferences and trade agreements.

The COREDO team has implemented projects where strategic planning during tariff changes and analysis of tariff consequences for companies allowed clients to significantly reduce total costs and increase the investment attractiveness of the business.

Legal support and compliance for business

Legal business support: it is not only company registration but also ongoing financial monitoring, beneficiary control, implementation of compliance procedures and protection of interests in international arbitration disputes over tariffs.

Our experience at COREDO confirms: only a comprehensive approach to legal security and compliance allows minimizing risks related to changes in tariff policy, sanctions and regulatory shifts.

That is why it is important to develop effective mechanisms in advance to reduce the impact of tariff changes on a company’s operations.

How to reduce the impact of tariffs on business

Illustration for the section «How to reduce the impact of tariffs on business» in the article «The impact of tariffs on trade: how to reduce risks»

The impact of tariffs on business can manifest through rising cost of goods sold, reduced competitiveness and the need to revise development strategies.

To ensure resilience under changing tariff policy, companies need to understand the main risks and know how to minimize them. Below we will consider specific smethods that will help reduce the impact of tariffs on business and manage tariff risks.

How to minimize tariff risks?

Conduct due diligence to assess tariff and sanction risks for all key counterparties and supply routes.
Implement automation for monitoring changes in tariffs and sanctions using digital tools and ERP system integration.
Use free economic zones and tariff preferences to optimize the structure of foreign trade operations.
Develop scenario planning and stress-testing of business models taking into account possible escalation of tariff wars.
Ensure legal support and compliance control at all stages: from company registration to making cross-border payments.

Metrics and KPIs for assessing effectiveness

To assess the effectiveness of measures to reduce tariff risks, we recommend using:

Trade balance (export/import),
ROI when tariff rates change,
Share of tariff and logistics costs in the cost structure,
Response time to changes in tariff policy,
Compliance metrics: number of identified risks, speed of their elimination, level of process automation.

Analysis of business sensitivity to tariff changes and regular financial monitoring allow timely adjustment of strategy and maintain resilience in the face of foreign trade shocks.

Legal and consulting partners

Best practices for interacting with legal advisors on tariff barriers include:

Transparency of communications and regular updates on regulatory changes,
Joint development of a corporate strategy for managing tariff and currency risks,
Integration of corporate responsibility and ESG factors into the global trade strategy.

COREDO acts as a long-term partner for clients, providing not only legal security but also strategic support in the context of changing trade policy.

Recommendations for entrepreneurs

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The impact of tariffs on trade and business requires a systemic approach: from strategic planning and optimization of foreign trade expenses to implementing compliance and AML for companies and continuous legal support for the business.

A global trade strategy should take into account corporate responsibility, ESG factors, and new requirements for transparency and sustainability.

COREDO’s practice proves: only the integration of legal, financial, and operational instruments makes it possible to minimize tariff-related risks and ensure the long-term competitiveness of the business in the international arena.

The impact of tariffs on trade and how to reduce risks