Key take-aways for businesses on how to navigate the U.S. tariff measures
01 May 2025
Amid escalating trade disruptions resulting from the latest U.S. tariff policies and global reactions, businesses are facing heightened uncertainty across global markets. The fast evolving dynamics of the U.S. measures and responses from affected trading partners make it increasingly difficult for businesses to navigate the impact of these policies on cross-border operations. In our latest Ashurst webinar, our international trade and disputes teams unpacked the key trade and commercial contract implications of these measures and shared actionable strategies for managing risk in cross-border operations. Below we provided a summary of the key implications and recommended actions discussed during the session. If you were unable to attend, the full recording is available here: https://www.ashurst.com/en/insights/the-impact-of-the-new-us-tariffs-and-related-countermeasures-on-global-business/.
Key implications identified
1. U.S. trade measures have disrupted global markets, shifting cross-border trade to a more volatile and uncertain environment, disrupting supply chains and slowing transactions and investment
U.S. tariff measures have significantly disrupted the global trade environment, creating a volatile landscape that has raised widespread concerns among businesses. This instability affects strategic planning, deters investment, and complicates day-to-day operations. Companies are facing increased difficulty assessing risk across complex supply chains, as tariffs - and the potential for countermeasures - impact sourcing strategies, customs planning, and cost forecasts. Rising costs and limited availability of key inputs further challenge supply chain resilience, particularly in sectors reliant on globally integrated production models, such as automotive, semiconductors, and advanced manufacturing.
2. Besides immediate impacts, businesses also face challenges navigating secondary effects such as trade diversions and responding measures caused by the tariff measures.
In addition to direct economic impacts, the rapid and uncertain evolution of both countermeasures and protective trade measures has introduced a layer of unpredictability that is difficult for businesses to manage. Trade diversion risks and secondary effects, such as increased competition or new trade defence actions, are further complicating compliance and market strategy.
3. From a day-to-day business operational point of view, tariff measures impact contractual performance and create uncertainty around the legal and practical effects of price increases and supply chain disruptions.
Contractually, tariff-related disruptions are affecting pricing and performance under existing agreements, triggering the invocation of renegotiation and termination provisions under contract and applicable legal doctrines and thereby increasing the likelihood of disputes. The unpredictability of the measures also pose challenges to drafting of future agreements in light of the need to account for pricing volatility and performance disruptions.
Key points of action
4. Audit and optimise supply chains and look for possibilities to diversify and strategically relocate production.
Businesses should begin by conducting a comprehensive supply chain audit to identify exposure to U.S. tariffs, highlighting high-risk suppliers, products, and jurisdictions. This forms the foundation for developing contingency plans and maintaining supply continuity. Simultaneously, companies should explore opportunities to optimise supply chains - particularly by leveraging rules of origin under free trade agreements - to enhance eligibility for preferential tariff treatment and minimise exposure to additional duties. To reduce reliance on tariff-affected regions, businesses should consider diversifying their supplier base and exploring production shifts. However, strategic relocations must account for associated risks - such as the impact on rules of origin and varying production costs across regions.
5. Avoid extra costs and ensure proper compliance with existing and future tariff and non-tariff regimes.
To mitigate tariff exposure, businesses must have a firm understanding of the applicability and scope of measures in place and those to come. This includes a thorough conception of how tariffs are applied and how products are classified and valued; applying the correct transaction value or alternative valuation methods ensures tariffs are not overpaid. Businesses should validate Harmonized System (HS) codes across all products to avoid misclassification, conduct detailed product classification reviews and tariff engineering which - where feasible - can lead to substantial savings. Additionally, companies should monitor secondary trade measures such as anti-dumping or countervailing duties, which may arise due to trade diversion effects from broader tariff policies.
6. Strengthen Contractual Readiness.
The imposition of U.S. tariffs - particularly under the Trump-era measures - has underscored the importance of contractual readiness in mitigating legal and financial exposure. Existing commercial contracts should be carefully reviewed to assess their resilience to tariff-related disruptions, with particular attention to price adjustment mechanisms, change-in-law clauses, and force majeure and hardship provisions. Where such clauses are absent or ambiguous, businesses may need to rely on statutory or general principles under civil, common, or international law to seek contract modification or termination. For future agreements, parties are increasingly advised to include tariff-specific provisions that address cost allocation, renegotiation triggers, or termination rights in the event of trade-related shifts. Given the potential for disputes arising from cost increases or delays in performance, incorporating clear dispute resolution frameworks is equally critical to manage the legal uncertainties tariffs continue to generate.
