In today’s global environment—shaped by trade tensions, evolving regulations, and shifts in international tax policy—transfer pricing (TP) compliance has become a strategic priority for multinational companies. Mexico is no exception. In 2025, a combination of internal and external factors will pose concrete challenges that businesses must address in the documentation and valuation of related-party transactions.
Global Uncertainty
The Looming Threat of a New Tariff Cycle
The Financial Times, in The Economic Consequences of Donald Trump’s Second Coming, warns that a second Trump administration could reignite his aggressive tariff agenda—threatening key trade partners. Proposals such as a blanket 10% tariff on all imports and a 60% tariff on Chinese goods would ripple through global value chains, driving up production costs and undermining the competitiveness of Mexican exports, especially in the automotive and auto parts industries. Beyond external markets, this scenario directly impacts transfer pricing: as market conditions shift, comparable margins may become distorted, and the adjustments required to support intercompany pricing turn increasingly complex.
The Risk of Uncertainty in the Real Economy
As Investopedia highlights in its article How Tariff Uncertainty Corrodes the Economy, the real risk is not only the imposition of tariffs, but the persistent uncertainty surrounding if, when, and on which sectors they will fall. This volatility discourages business investment, disrupts strategic planning, and undermines the reliability of financial data used in functional, asset, and risk analyses for transfer pricing studies.
Navigating Uncertainty in Mexico
The international perspective is reinforced by recent reports in national media, highlighting concrete effects already taking place in Mexico:
- Rising Costs in Essential Goods: In states like Baja California, San Luis Potosí, and Chihuahua, essential goods have seen noticeable price increases—driven in part by the rising costs of industrial inputs affected by U.S. tariffs. This trend indirectly raises operating costs for businesses in sectors such as logistics, packaging, and distribution.
- Production Halts and Workforce Reductions in Key Industries: The trade war with the United States has triggered shutdowns in automotive and steel plants, along with workforce reductions across northern Mexico. These developments reshape cost structures, operational capacity, and critical functions—factors that must be thoroughly documented in the functional analyses of transfer pricing studies.
- Early Review of the USMCA Trade Agreement: In response to looming tariff threats, Mexico’s Ministry of Foreign Affairs has confirmed that the country will request a review of the USMCA in the second half of 2025. This process could bring changes to rules of origin, tax incentives, and compliance frameworks—all of which must be carefully addressed in intercompany contracts and transfer pricing documentation.
Transfer Pricing Implications
For multinational companies in Mexico, the following considerations are key to mitigating risks and ensuring full compliance:
- Reassessing Margins and Comparables: With market conditions shifting at an accelerated pace, it is crucial to update benchmark profit margins and assess whether traditional comparables remain reliable in environments shaped by tariffs, inflation, or operational disruptions.
- Strengthening Documentation: Tax authorities may challenge intercompany pricing when there is no clear evidence of external factors at play. Strengthening intercompany contracts, functional analyses, market studies, and all supporting documentation is therefore essential.
- Cross-Functional Coordination: Tax, Customs, and Legal: Trade and tax policies can no longer be managed in silos. Tax compliance teams must coordinate with foreign trade functions to ensure customs values align with transfer pricing studies—mitigating the risks of adjustments, penalties, and double taxation.
Conclusion
The economic and regulatory landscape of 2025 demands that companies respond with agility, technical precision, and strategically integrated transfer pricing practices. In Mexico, pressures arise not only from domestic changes but also from international trade decisions that shape the operations and oversight of multinational businesses. Transparency in documentation, ongoing monitoring of global developments, and rigorous technical reviews of economic studies are now essential to mitigate risks and strengthen a defensible tax position. More than a matter of formal compliance, transfer pricing studies must be recognized as a cornerstone of both tax and operational strategy in today’s evolving global environment.
Sources
- https://www.ft.com/content/0892542b-abb6-4097-b3d7-b9600d4cac11
- https://www.investopedia.com/why-uncertainty-corrodes-the-economy-11698581
- https://elpais.com/mexico/2025-06-23/de-las-extorsiones-a-los-aranceles-de-trump-los-cinco-estados-con-la-canasta-basica-mas-cara-de-mexico.html
- https://elpais.com/mexico/2025-06-25/paros-tecnicos-y-despidos-en-la-industria-automotriz-y-siderurgica-en-plena-guerra-comercial-con-trump.html
- https://elpais.com/mexico/economia/2025-05-13/ebrard-confirma-que-la-revision-del-tmec-se-adelantara-al-segundo-semestre-de-este-ano.html
- Diario Oficial de la Federación (DOF), “Reglas Generales de Comercio Exterior para 2025”, publicado el 30 de diciembre de 2024
Por: Alejandra Nava
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