Import tariffs and transfer pricing issues of international market joint ventures are coming to impact each country’s governance and leadership strategies, which President Trump has sounded the alarm bell. Why can the US have a big influence in restructuring this trade balance?

The U.S. can have a big influence in restructuring the global trade balance, especially when it comes to import tariffs and transfer pricing in international joint ventures, for several reasons—many of which align with concerns raised during President Trump’s administration. Let’s break it down:

1. Economic Size and Market Power

The U.S. remains one of the world’s largest consumer markets. Many countries and multinational corporations depend heavily on access to American consumers. This gives the U.S. significant leverage in trade negotiations and when pushing for fairer terms.

2. Control Over Tariff Policy

The U.S. can unilaterally impose tariffs or adjust them to protect domestic industries or respond to what it sees as unfair trade practices. Under Trump, this was seen with tariffs on steel, aluminum, and Chinese goods as part of a broader effort to address trade imbalances.

3. Transfer Pricing Scrutiny

Transfer pricing—the way companies set prices for transactions between their own subsidiaries across borders—is often used to shift profits to low-tax jurisdictions. The U.S. has been increasingly cracking down on this through stricter IRS regulations and cooperation with international tax initiatives (like the OECD’s BEPS project).

Trump and other U.S. leaders have argued that multinational companies and foreign governments use these systems to avoid taxes or manipulate trade data, which undermines domestic industries.

4. Geopolitical Clout

The U.S. plays a leading role in major international institutions like the WTO, IMF, and World Bank. Even with recent skepticism of multilateral agreements, the U.S. still has significant say in shaping global economic norms and policies.

5. Reshoring and Trade Realignment

Under Trump, there was a big push toward reshoring (bringing manufacturing back to the U.S.) and rethinking global supply chains—especially to reduce reliance on China. That influence has persisted and shaped how international joint ventures are structured now, with a greater emphasis on national security and economic independence.

So Why Does This Matter for Governance?

As trade balances and joint ventures shift, each country has to adapt its domestic policies—on taxation, subsidies, labor laws, and more. U.S. leadership can essentially set the tone for how other countries respond, either by aligning with the U.S. or pushing back through regional partnerships.

Would you like a deeper dive into how this impacts a specific industry or region?