Introduction: What Just Happened?
On April 5, 2025, the Trump administration rolled out one of the most aggressive trade policies in recent history. A flat 10% tariff now applies to all imports into the U.S., with country-specific tariffs stacking on top—like a jaw-dropping 54% for goods coming from China. These sudden changes have left businesses scrambling, markets reacting sharply, and supply chains facing unprecedented pressure. For business owners, especially importers and small-to-midsize companies, this isn’t just a policy shift—it’s a financial punch in the gut.
Why This Isn’t Just About Politics
While many see tariffs as a political issue, they carry real consequences for everyday business operations. If you’re a U.S. importer, you’re now paying significantly more to bring products into the country. And those added costs? They either eat into your profits or get passed down to your customers. The result: thinner margins, rising prices, and tough decisions for business owners who rely on global trade to stay afloat.
The Legal Foundation of the Tariffs
These new tariffs aren’t just random numbers—they’re backed by legal authority. The Trump administration is using powers from Section 301 of the Trade Act of 1974, which allows for tariffs in response to unfair trade practices. Other sections, like 232 and 201, add further legal backing related to national security and domestic industry protection. The important part? These powers don’t need congressional approval. That means changes can be fast—and hard to fight.
Why You Can’t Just Sue Your Way Out
Many business owners ask, “Can’t I just challenge this in court?” Unfortunately, the courts have consistently upheld presidential tariff powers. Legal experts say it’s less about courtroom battles and more about smart planning. You need a strategy—not just a lawyer. And that’s where legal professionals come in: helping you revise contracts, manage risk, and make sure your business can handle the new tariff reality.
Who Really Pays the Tariff?
It might surprise you, but even if you’re not the manufacturer, you may still be the one stuck with the bill. Under international shipping terms (called Incoterms), the “importer of record” pays the tariff. So, whether you’re using FOB (Free On Board) or CIF (Cost, Insurance, Freight), if you’re listed as the importer, you’re responsible. This is where contract details matter more than ever.
Contracts Need an Upgrade—Now
If your contracts don’t already include clauses for tariff changes, now’s the time to act. There are three powerful clauses that can protect you:
- Tariff Adjustment Clause – Lets you raise prices if tariffs change.
- Force Majeure Clause – Protects you if government actions make fulfillment impossible or unreasonably expensive.
- Change in Law Clause – Allows renegotiation if a law change (like a new tariff) significantly impacts your costs.
These clauses give you breathing room and protect your bottom line. Don’t wait until it’s too late.
Already Signed the Contract? There’s Still Hope
Even if a contract is already in place, there are still legal tools available. Under the Uniform Commercial Code (UCC), sellers may seek relief under:
- Section 2-615 (Impracticability): If a sudden government action makes performance nearly impossible.
- Section 2-209 (Modification in Good Faith): Allows contract changes when both parties agree and costs have gone up.
It’s a tough standard, but not impossible—especially if you act quickly and document everything.
Regulatory Exceptions: A Glimmer of Relief
There’s a little-known option called the Section 301 Exclusion Process. If your product is subject to a new tariff, you might be able to apply for an exemption. To qualify, you’ll need to show:
- There’s no U.S. supplier available.
- The tariff causes serious economic harm.
- The product isn’t tied to sensitive national security sectors.
The process is slow and competitive, but successful applications could lead to refunds on tariffs already paid—and future relief.
Smart Business Strategies to Move Forward
So what should you do now?
- Review All Contracts – Look for pricing flexibility and missing clauses.
- Audit Incoterms – Know exactly who’s paying what.
- Get Ready to Apply for Exclusions – Start gathering paperwork and economic data.
- Talk to Your Suppliers and Customers – Renegotiate where needed.
- Reevaluate Your Supply Chain – Consider near-shoring to countries with lower tariff risk, like Mexico.
Acting fast can save you money and relationships
Conclusion: Turning Panic Into Planning
These new Trump tariffs are more than just numbers—they’re a game-changer for global business. But with the right legal tools, thoughtful contract revisions, and proactive planning, you don’t have to face them alone. At Carbon Law Group, we’re here to help you protect your business, renegotiate smarter, and adapt quickly. Don’t wait for the storm to pass—start building your umbrella today.