Key take-aways for businesses on how to navigate the U.S. tariff measures and optimal approach
27 June 2025
The new U.S. administration’s tariff measures have disrupted global businesses, but ongoing policy uncertainty is the main driver of today’s volatile trade environment. With the suspension of the expansive ‘reciprocal’ tariff regime set to expire in early July and President Trump renewing announcements for potential new measures, global markets remain on edge. Countermeasures and significant commercial consequences are becoming more likely, while emerging bilateral deals could reshape market conditions. The rapidly shifting trade landscape is making it harder for businesses to manage cross-border operations.
In our latest Ashurst webinar, our international trade and disputes teams explored the key legal and commercial impacts of these developments and shared practical strategies for mitigating risk. Below is a summary of the main insights and recommendations. If you missed the session, the full recording is available here.
Key take-aways
1. Trade Volatility Is the New Normal
The persisting U.S. tariff measures are not just disrupting supply chains— they are entrenching long-term uncertainty, prompting businesses to fundamentally reassess cross-border operations, pricing strategies, and investment planning. While some measures have been temporarily suspended and negotiations with key trading partners offer the prospect of lower tariff burden in some sectors and for some jurisdictions, the broader trade environment remains volatile and increasingly fragmented. Domestic and international legal challenges are unlikely to bring a definitive end to current U.S. trade policy. Instead, businesses must prepare for a new reality: the era of broad-based trade liberalization has, at least for the foreseeable future, come to a close.
2. Tariff Mitigation Strategies: Strategic Customs Planning Is Essential
Effective mitigation requires reassessing customs treatment, including rules of origin, valuation, classification, and eligibility for preferential regimes. U.S.-specific complexities—such as the “substantial transformation” test and the “first sale for export” rule—necessitate close legal and operational scrutiny. The substantial transformation test, in particular, is inherently subjective and applied on a case-by-case basis, relying on precedent and administrative rulings - complying with these standards demand close legal and operational scrutiny. In parallel, companies should evaluate the applicability of existing Free Trade Agreements (FTAs). While most of the current tariff measures apply broadly and without exemption, including to FTA partners, a lower base rate under an FTA reduces the overall burden. This is due to the cumulative nature of these tariffs, which are applied on top of existing rates. Accordingly, preferential duty treatment, even if partial, can provide meaningful cost relief. Generally, a proactive approach can unlock cost efficiencies and minimize compliance risks.
3. Contractual Implications: Commercial Contracts Require Review
Rising tariff exposure is driving a wave of contract renegotiations. Businesses should closely review existing agreements for provisions addressing force majeure, price adjustments, and tariff allocation. The volatility of trade policy has led many parties to incorporate clauses that address extreme cost fluctuations, suspension rights, or renegotiation triggers linked to tariff changes. Looking ahead, incorporating clear and enforceable risk-allocation mechanisms into new contracts will be essential for managing uncertainty and protecting commercial interests.
Optimal approach
1. Anticipate Global Trade Disruptions
Integrate trade policy volatility and geopolitical risk into broader enterprise risk management frameworks to proactively address potential disruptions.
2. Audit and Diversify Supply Chains
Conduct comprehensive reviews of supply chains to identify opportunities for diversification and optimization. Leverage FTAs to reduce tariff exposure and enhance sourcing flexibility.
3. Ensure Compliance and Minimize Cost
Maintain rigorous compliance with tariff and non-tariff regimes. Pay particular attention to accurate product classification, valuation, and origin determination to avoid costly errors, penalties, and overpayments.
4. Enhance Contractual Resilience
Strengthen contracts by including clear risk-allocation provisions—such as tariff-sharing, price-adjustment, and renegotiation clauses—to safeguard against unforeseen trade policy shifts.
