The Impact Of Tariff Policy Changes On Contracts Governing Cross-Border Transactions

Trump's frequent and unpredictable tariff policy changes have, since April 2025, brought huge uncertainty to global trade, resulting in a sharp increase in tariff risks in international transactions. The sudden increase in tariffs may lead to a surge in the cost of contracts which had already been entered into, and may accordingly engender disputes between the contracting parties. Moreover, future contracts will need to carefully consider whether to adopt tariff clauses. This article will discuss the risks and countermeasures which may be warranted by the issues canvassed above.

I. Impact on Signed Contracts

In circumstances where a company's contractual performance is negatively impacted by tariff policy changes which come into effect after the contract has entered into effect, it is first necessary to confirm whether the contract specifies which party bears the risk of tariffs. In this regard, it is necessary to examine whether the contract includes a risk