It’s quite complicated, but to give an example:
- Company A (US) licenses its toothpaste IP to a child company based in Ireland
- Company B (IR) sub-licenses the expensive formula to a Company C (FR)
- Company C pays another subsidiary Company D (Poland) to manufacture it
- Company C then sell it to a mass retailer in France
- the mass retailer sells it in supermarkets

Company C deduces royalties and production costs from its profits, so the profits go to Company B, based in a tax paradise.

@C0rn3lius It’s not about the tariffs but corporate taxes. Although in practice US companies have local subsidiaries and pay local taxes (if they pay it at all of course, cf Amazon), a lot of products are also manufactured in the EU. US companies pay taxes to the US gov when the EU child company sends money to the parent company, but there are a lot of tax optimisation strategies (IP licensing…) to partially evade it.
No idea how much of our grocery money gets back to the US treasury.