MVA Supply Chain Brief: What Terms Govern?

In this second installment of MVA's Supply Chain serieson tariffs, we examine a fundamental question in the determination of which party to a contract is responsible for paying tariffs on goods imported into the United States: "What Terms Govern?". While this may seem like a simple question on the surface, the reality is often more complex.

Executed Agreements: The Easy Path

Let's take the ideal scenario first. If the buyer and seller have executed (or otherwise accepted and performed under) a written agreement, the terms of that agreement govern. In that case, the delivery term (e.g., DDP, EXW, FOB, etc.) within the agreement applies and determines which party is responsible for payment of tariffs.