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ARTICLE · 18 AUGUST 2025

Tariffs And Your Contracts: Why Do Delivery Terms Matter?

Foley & Lardner LLP
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In light of a trade landscape rife with tariffs, companies are examining their commercial contracts to judge the exposure to increased costs of production.

United StatesInternational Law
Kathleen Wegrzyn
Kathleen Wegrzyn
Eugenia Wang
Eugenia Wang
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In light of a trade landscape rife with tariffs, companies are examining their commercial contracts to judge the exposure to increased costs of production. One area of a supply contract that cannot be overlooked when determining this type of exposure is the delivery terms for the product sale. This is because the delivery terms of a contract may identify the party responsible for payment of tariffs.

Incoterms 2020 Delivery Terms

Delivery terms are commonly expressed as Incoterms, which are a set of 11 individual delivery terms with a prescribed set of responsibilities issued by the International Chamber of Commerce, a global business organization. The most favorable delivery term for suppliers under Incoterms 2020 is EXW (Ex Works), in which the supplier makes the goods available at its facility, and the buyer is responsible for transportation, including payment of tariffs. Conversely, the most favorable delivery term for buyers under Incoterms 2020 is

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