April '25The Impact of Trump Tariffs on Outsourcing : 4 Questions that No One Answers
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President Trump and his administration recently initiated a new trade policy that applied tariffs on all goods and merchandise imported into the United States from all countries.
At PamGro – Employer of Record , we have been getting a ton of questions from contract workers and customers on whether Tariffs apply to companies that employ remote workers and/ or outsource work outside the United States.
We put together a set of Trump Tariff FAQs on Remote Working and Outsourcingthat bring clarity to your business decisions.
The Trump Tariff Frequently Asked Questions :
1. I have remote workers and / or outsource work to other countries. Will tariffs be applied on their work delivered to us and paid from the USA ?
The short answer is NO.
If you have team members working globally or outsource work to other firms globally and you pay them from the United States then these are counted as services imported into the United States. As per the new trade policy under President Trump these are not under tariffs so you should not worry. (Source)
2. The “No Tariffs on Services” policy can change with a single tweet. Then what ?
The trade policy can change at short notice and no one knows the mind of the administration but imposing tariffs on services looks like a low probability event.
3. Why are you sure that tariffs will not be applied to imported services ?
No one can be 100% sure. However, consider this: the U.S. runs a huge surplus in services exports – $293.3 billion in 2024 alone, according to the U.S. Bureau of Economic Analysis (Source). This isn’t by accident, it’s powered by America’s strongest industries: Tech, Finance, Software, Intellectual property. Think Silicon Valley giants and the Magnificent 7, these companies dominate global services and bring in serious money from around the world. So, would the U.S. really put tariffs on imported services, something that could trigger retaliation and harm its own most profitable export sector? Highly unlikely.
4. I am thinking of setting up a firm in Europe / Asia / Latin America to outsource, what should I do now?
Remote work and Outsourcing are global Megatrends, organizations increasingly find the right talent at the right price globally. Covid demonstrated this very well and it’s hard to go back on that path. If you have already set up a firm or are in the process of doing so, then you should probably go ahead.
However if you are still evaluating this option then there is a Low Risk choice.
Employer of Record (EOR) - The Low Risk Option for Outsourcing and Remote Working
If you’re not ready to fully commit to outsourcing or managing remote teams due to potential changes in tariff policy or simply the uncertainty of international expansion, then Employer of Record (EOR) is a convenient and low risk way to start.
With an Employer of Record, you can:
- Hire the talent you need in any country you want, without the need to establish a company there.
- Use an EOR service provider like PamGro – Employer of Record to manage your Legal and HR compliance and handling all authority payments like Pension, Insurance and taxes to name a few.
- Avoid the need to set up a local office, allowing you to operate internationally without the complexity and cost of establishing a new company and manage local compliances.
- Get started quickly and evaluate if this international expansion works for your business.
Once your team scales up and there is clarity on the tariff policy or you are confident of making it work, you can set up your own entity and migrate the team to your own company in the new country.
When to Choose an EOR (Employer of Record) - The Industry Best Practice
Case 1:
Employer of Record is ideal for smaller teams, typically up to 20-25 employees. For larger teams or long-term commitment to a specific market, you may consider setting up a local entity once you’ve confirmed that expansion is sustainable and profitable.
Example: If you are a silicon valley startup and want to hire a 5-10 smart engineers in India and Germany each , then Employer of Record helps you start immediately instead of waiting for weeks.
Case 2:
Employer of Record also works if you have a large fixed time period project to complete with a clearly defined milestone and you don’t need a permanent presence in that country or talent pool beyond that milestone.
Example: If you are developing a Maps application and you hire a large number of people temporarily to run street cams. Once your database of Street Views is completed, you need a much smaller team to run it. EOR is a great fit for these use cases.
👉 Want to explore how EOR can fit your growth plans?
Book a quick 15-minute discovery call with us. Let’s talk about your expansion goals and how PamGro – Employer of Record can make it easier, faster, and compliant.
Disclaimer *Nothing in this newsletter is intended to be legal advice, please consult a qualified legal professional before you make a business decision.
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Follow Soham Vaghela for expert insights on EOR trends, global compliance, and international business expansion strategies—backed by hands-on experience across multiple markets!.
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