Related-Party Imports Put Nearly Half of US Tariff Costs Inside Multinational Supply Chains

Tariffs on imports between affiliated companies can raise costs inside US production networks, even when the overseas seller belongs to the same multinational group. The exposure is substantial: related-party transactions accounted for 49.5 percent of US goods imports in 2024, and an estimated 45.6 percent of the current tariff base consists of those transactions.

That pattern complicates the familiar claim that tariffs primarily make foreign companies pay for access to the US market. When imported parts, materials, or equipment move between a company’s own affiliates, the tariff can land on a business network that supports production and employment in the United States. The immediate payer is the US importer; the eventual economic cost can be shared across company operations, workers, suppliers, and customers.

Nearly half of imports move within corporate groups

Census Bureau data show that related-party imports have represented between 46 and 51 percent of total US goods imports in each year since 2005. The proportion was 49.5 percent in 2024. It dipped during the 2008 recession and the pandemic, but the long-running range points to a durable feature of cross-border commerce, rather than a recent exception.

Related-party trade covers imports between a US parent and its foreign affiliates, as well as shipments to US subsidiaries from foreign parent companies. Both kinds of firms contribute to domestic employment and investment. The Census figures do not separate imports from US-owned affiliates from those sent by foreign-owned parents, so the data cannot assign the overall share to one ownership category.

Multinationals organize production across borders to match different stages of work with specialized labor, raw materials, suppliers, and customers. US factories may depend on imported components and machinery to keep domestic production running. Many imports are intermediate or capital goods that support activity in the United States, rather than finished products that displace it.

That structure matters for tariff incidence. Research has found that US businesses and consumers bear much of the cost of tariffs, despite claims that foreign exporters would pay. Other evidence suggests foreign firms may absorb a larger share than early estimates indicated. Still, when the transaction takes place within one corporate group, the usual distinction between a foreign exporter and a US importer becomes less straightforward.

Exposure varies sharply by sector

The estimated related-party share of imports subject to current tariffs is particularly high in autos and pharmaceuticals. For auto imports, 97.1 percent of related-party trade is subject to current tariffs; the related-party share of total auto imports is 96.8 percent. In pharmaceuticals, the corresponding figures are 84.5 percent and 85.5 percent. Metals have a lower related-party share, at 34 percent, while the figure for all other imports is 38 percent of trade subject to tariffs.

Table 1. Related-Party Import Share for Goods by Sector and Tariff Applicability

The sector mix shows why a single national tariff figure can obscure meaningful differences in business exposure. Autos, in particular, rely heavily on transactions between affiliated entities. A tariff applied to an imported component can therefore increase costs for a US plant even when its overseas supplier is part of the same company.

Consider a Japanese automaker that operates a US factory serving the North American market. The plant contributes to domestic investment and employment, but tariffs on inputs can make its operations more expensive. That added cost may affect the parent company’s decisions about production, hiring, or future investment. Foreign ownership does not prevent a tariff from affecting activity located in the United States.

Cost increases can reach beyond the border

Companies build multinational supply networks around facilities, trained workers, and logistics systems developed over many years. These arrangements can’t always be changed quickly when tariff rates shift. In the near term, firms face higher input costs. Over time, some may alter sourcing or relocate production, but redesigning a network to reduce tariff exposure can sacrifice efficiency if the new structure is less productive.

Companies have a few ways to absorb the cost: accept lower margins, raise prices, or cut spending elsewhere. The pressure can reach US consumers, while cost reductions may affect hiring and expansion. Firms that use tariffed inputs to manufacture goods in the United States can also face a competitiveness problem abroad. They may need to charge foreign buyers more or accept thinner margins than rivals with lower-cost supply chains.

Tariff exemptions can reduce the bill for some firms, but the need for exemptions also signals how difficult broad tariffs are to apply in an economy built on interconnected production. The administration’s extensive exemptions for baseline tariffs indicate that officials recognize the potential for broad measures to raise costs for domestic manufacturers.

Uncertainty adds another layer. Tariff rates have changed more than 50 times since March 2025, according to the source analysis. Frequent adjustments make it harder for companies to plan investment and staffing around stable input costs. When firms can’t confidently forecast trade costs, they may postpone decisions about facilities, hiring, and supply relationships.

What the estimate can and can’t show

The estimate combines Census Bureau 2024 related-party trade data, published at the six-digit NAICS level, with categories matched to tariff actions directly or through an HTSUS-to-NAICS concordance. The calculation divides related imports by total imports across the matched 2024 trade. It also considers exclusions and USMCA utilization rates.

Because related-party trade data aren’t available below the NAICS6 level, the analysis cannot match every shipment to the more detailed tariff lines that define the actual scope of a measure. The 45.6 percent estimate should therefore be read as an approximation based on the available data, not an exact count of every tariffed transaction.

The key market context is clear even with that limitation: a large share of US imports moves within multinational companies, and many of those goods feed domestic production. Tariffs on these flows can raise costs for US operations regardless of the parent company’s nationality. That makes ownership and supply-chain structure central to assessing who ultimately bears the burden.

Methodology

Estimates of the related-party share of US imports subject to recent tariff action use Census Bureau’s 2024 Related-Party Trade Data, published at the 6-digit NAICS level. Relevant NAICS codes were matched to each tariff directly or via the HTSUS to NAICS concordance, and related-party share was calculated as related imports divided by total imports across all matched 2024 trade. Exclusions and USMCA utilization rates were considered. NAICS codes are coarser than the HTSUS codes that define tariff scope; however, this precision gap affects related and total imports proportionally. Related-party trade data is not published below the NAICS6 level, so this remains an estimate constrained by that resolution rather than an exact tariff-line calculation.