What happened?

Since beginning his second term, President Trump has taken a tougher stance on U.S. trade policy, in particular in dealings with key US trading partners such as Mexico, Canada, China, and the EU.

The political discussions ultimately skyrocketed, and various tariffs were introduced. Some have been later adjusted, paused, or withdrawn – while others remain in effector are continuously being threatened.

With key world economies suggesting retaliation, this has added to the uncertainty for global businesses.

Whether you are transporting oil across the Atlantic, loading avocadoes to be driven from Mexico to Texas, or selling Canadian beer at a local Illinois pub, it is difficult to track these measures and their impact. Where some companies are deciding to avoid the US trade altogether, others have no choice but to adapt.

Either way, this situation could cause significant legal issues for many ongoing international sales contracts involving the US, affecting players at each level of the supply chain.

Measures currently in effect:
As of the end of Saturday, 8th of March, the situation is as follows:

Canada: On February 1, 2025, the U.S. imposed a 25% tariff on most Canadian imports, with a reduced 10% tariff on energy resources. These measures aim to address concerns over illegal immigration and drug trafficking. In retaliation, Canada announced a 25% tariff on approximately CA$30 billion worth of U.S. goods, including food, textiles, and furniture, with plans to expand to CA$125 billion in imports. The implementation of the 25% tariff on most Canadian imports, initially set for February 1, 2025, was delayed until March 4, 2025, following an agreement between President Trump and Prime Minister Justin Trudeau. Canada reciprocated by pausing its retaliatory measures.

Trump’s 25% tariffs ultimately took effect on March 4, but were then paused for United States–Mexico–Canada Agreement (USMCA) -compliant goods until April 2.

Mexico: Similarly, a 25% tariff was levied on most Mexican imports starting February 1, 2025, targeting issues related to border security and drug trafficking. It was then postponed to March 4, 2025, after discussions between President Trump and President Claudia Sheinbaum. Mexico agreed to bolster border security efforts and collaborate with the US to prevent drug trafficking. Again, the tariffs became effective on March 4, but were then paused for USMCA – compliant goods until April 2. According to US officials USMCA Compliant trade generally accounts for about 50 percent of Mexican and 38 percent of Canadian imports.

EU: President Trump has mentioned imposing tariffs in relation to the EU, raising fears of an even wider trade conflict. While not yet targeted, the EU has expressed readiness to implement countermeasures.

China: An additional 10% tariff was imposed on all Chinese imports in early February2025, focusing on curbing the flow of precursor chemicals used in synthetic opioids like fentanyl. This measure came into effect on 4 February and was in addition to any already existing tariffs. In response, China introduced tariffs of 10-15% on US agricultural goods, coal, liquefied natural gas, pick-up trucks, and some sports cars. Subsequently, on March 4, 2025, President Trump increased the tariff rate on Chinese imports from 10% to 20%. China imposed new tariffs ranging from 10% to 15% on various U.S. agricultural products, including chicken, wheat, corn, cotton,  sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products, effective March 10.
There have been no official announcements regarding the suspension or withdrawal of these tariffs

Legal implications:
Rapid political actions like this always bring a lot of uncertainty for rational business decision-makers. Companies are forced to make tough decisions on the spot, without the benefit of legal advice or economic analysis. Whether deciding to terminate existing contracts or continue supplying goods that will ultimately be subject to increased tariffs, many negative consequences could be avoided if the applicable contractual clauses and legal frameworks are reviewed before taking action. The two most important questions to consider at this stage are: (i) whether the new measures may directly or indirectly affect any existing contracts, and (ii) if so, who is ultimately responsible for paying the increased costs. Sale or transportation agreements will often contain clauses which might make the division of such risks clearer.

• For example, clause 62.5 of the BP GTCs provides that generally the risks for any taxes, duties, imposts, fees, charges and dues of every description imposed or levied by any governmental, local or port authority pass to the Buyer together with the risk in the Product that is being supplied.
• This way, in FOB sales subject to BP GTCs once the Product is considered to be onboard, the risk in any increased import duties in respect of it will apparently pass to the Buyer. Somewhat similarly, in DAP sales, all taxes and duties in respect of customs and excise entry of the Product will be for the Buyer’s account.

Clauses similar to these could undoubtedly be found in many international sale contracts. However, even in the absence of express contractual provisions in relation to tariffs, parties may be able to rely on concepts such as force majeure, changed circumstances, frustration of purpose or impossibility to get around an unfavourable arrangement. Where the situation is still fast-developing, it is also advisable to negotiate a change of language in the existing contracts (even if they are not yet affected) to minimise any potential risks. Each situation is unique and requires careful analysis of the applicable legal standards.

Our multijurisdictional team is well equipped to assist at short notice to help businesses mitigate any potential exposure and decrease uncertainty, where it is possible to do so.