As U.S. tariff policies continue to rapidly evolve, businesses are under pressure to quickly determine how these changes impact their ongoing contractual obligations. Tariffs are likely to impact global and domestic businesses in numerous ways, not only in the cost of contractual performance, but in the domino effect inevitably caused as parties shift their supply and import strategies. There is no one-size-fits-all answer as each organization must address its own unique challenges. To address these challenges, businesses must first determine whether their goal is to pass on increased costs, hold parties to a contract, renegotiate pricing, delay or pause performance, or exit the contract entirely. If a business desires to be relieved from performance as a result of a new tariff policy, relying on a force majeure clause is unlikely to be a viable solution absent very specific contractual language. The best strategy depends on business needs and the contract’s terms.

To learn about the actions to take today to aid in the development of a tariff response strategy, view Taft’s complete law bulletin here.