Tariffs Paused, Trade Chaos Continues - Time for Legal to Take Charge

Tariffs on Hold are a Brief Reprieve Amid Ongoing Chaos 

The U.S. government’s current pause or stay on certain tariffs might feel like a welcome breather for companies that import goods. After years of escalating trade tensions, many in-house legal teams and supply chain managers have sighed in relief now that planned tariff increases are temporarily on ice. However, this tariff timeout is not a return to stability, it’s merely a brief lull in what continues to be a stormy global trade climate. 

Even with tariffs paused, the broader picture of international trade remains chaotic. Ongoing supply chain disruptions, geopolitical conflicts, fluctuating commodity prices, and shifting trade policies are still very much in play. In fact, recent industry surveys indicate that a majority of companies continue to experience significant supply chain challenges well into 2025, from shortages of critical components to unpredictable shipping delays. The chaos in global trade hasn’t disappeared; it’s just taking new forms. 

For legal departments, this means that many contractual risks tied to these uncertainties remain active. The tariff stay should be treated as a chance to catch our breath, not as an “all clear” signal. Now is the time to act. Instead of assuming the pause will last forever, savvy in-house counsel and legal operations professionals are using this window to fortify their organizations against whatever comes next. 

Hidden Risks and Obligations Buried in Contracts 

Why focus on contracts right now? Because the real impact of trade turbulence - whether tariffs, shortages, or delays - ultimately shows up in the fine print of your agreements. Contracts that were negotiated in calmer times may not have anticipated today’s volatile conditions. Risks and obligations are lurking in your contract portfolio, and if left unexamined, they can spring unpleasant surprises on your business when the next disruption hits. 

Tariffs, for example, are not just economic issues or headlines, they are legal triggers. A new tariff or a change in duties can activate price adjustment clauses, nullify volume commitments, or invoke termination rights that were negotiated under a very different market reality. Similarly, a port closure or materials shortage might trigger force majeure clauses or penalty provisions in supply contracts. If your team hasn’t reviewed these clauses recently, you might be sitting on ticking time bombs. 

Consider a few scenarios that could be buried in contracts: 

• Price Hikes and Surcharges: An agreement might allow your supplier to impose a price increase if import costs rise by, say, 5%. If tariffs resume tomorrow, are you prepared for an automatic cost spike? 

• Missed Delivery Deadlines: A manufacturing contract might include strict delivery timeframes with penalties. Ongoing logistics chaos could make those deadlines unachievable, leading to breach of contract if not managed. 

• Regulatory Compliance Changes: New trade sanctions or export control rules could render parts of an agreement illegal or unfulfillable, practically overnight. 

• Termination Triggers: Some long-term deals have clauses allowing termination if external economic conditions change drastically. A dramatic swing in tariff policy or supply chain viability might meet that threshold. 

Without a structured, proactive review, businesses risk facing: 

• Breach of contract allegations due to unforeseen supply chain failures. 

• Unexpected cost obligations (like suddenly absorbing a tariff cost because the contract said so). 

• Lost renegotiation opportunities that could have mitigated pain if spotted earlier. 

• Legal disputes and penalties that drain resources. 

• Damaged supplier or customer relationships due to last-minute surprises. 

In short, ignoring the fine print is no longer an option. The tariff pause is exactly when legal teams should double-check what they’ve committed the business to, and what outs or protections they have, in all key contracts. 

A Window of Opportunity for Legal Teams 

With the pressure of immediate tariffs eased for the moment, proactive legal departments are seizing this window to get their contract house in order. This is a classic “fix the roof while the sun is shining” situation. Once tariffs or other trade measures kick back in, and they likely will, given the unpredictable climate - it will be much harder (and more frantic) to respond if you haven’t done the homework now. 

Taking a challenger mindset, in-house counsel should resist any complacency within the business. Yes, it’s tempting to shelve those stressful tariff scenarios now that they’re not an active threat. But a consultative legal leader will explain to the C-suite that now is actually the best time to prepare for the next curveball. When everyone else is in reactive mode, your legal team can get ahead. 

Here’s what a proactive, forward-thinking legal team might do during this lull: 

1. Audit Key Contracts: Identify the contracts most exposed to tariffs or supply chain disruptions, for example, supplier agreements, manufacturing contracts, distribution deals, and any cross-border sales/purchase orders. 

1. Review and Flag Clauses: Within those contracts, review clauses related to pricing, delivery obligations, force majeure, change in law, termination rights, and any tariff allocation provisions. For instance, check who bears the cost of import duties under various Incoterms (if the contract uses a term like DDP or Ex Works, it determines whether the seller or the buyer pays the tariffs). 

1. Assess Obligations and Rights: Determine what your organization is obligated to do (or entitled to) if a tariff increase comes off pause. Do you have the right to pass on cost increases to customers? Can you exit a contract that becomes unprofitable due to tariffs? Or conversely, are you locked into a price that could turn into a loss? 

1. Engage Counterparties Early: If you spot a high-risk clause – say, a volume commitment that you might not meet if costs soar – consider reaching out to the counterparty now to discuss it. Renegotiating or at least alerting them beforehand can preserve the relationship and avoid breach situations later. 

1. Update Playbooks and Templates: Use lessons learned to update your standard contract templates and negotiation strategy guidelines. If current events exposed a weakness (e.g. lack of a tariff-triggered price adjustment clause), build that into new contracts going forward. This is part of institutionalizing contract intelligence, so the organization becomes more resilient. 
   
   

The Broader Value of Contract Intelligence 

One positive outcome of all this turmoil is that many organizations are realizing contracts aren’t just paperwork, they’re strategic data assets. When systematically analyzed, your collection of contracts reveals patterns of risk and opportunity. This is where contract intelligence comes into play. 

Instead of a one-time scramble whenever a crisis hits, contract intelligence is about continuous insight. It means having the ability to quickly search, sort, and analyze contract terms across your entire portfolio. With the right tools, legal teams can immediately answer questions like: 

• “How many of our supplier contracts allow price increases if tariffs exceed 10%?” 

• “Which customer agreements commit us to fixed prices – no matter what happens to our costs?” 

• “Do any contracts automatically terminate if laws change (e.g. a new trade regulation)?” 

• “Do we have force majeure clauses that may delay performance due to government trade actions?” 

Answering these questions manually, by pulling out PDFs and reading hundreds or thousands of pages, is impractical if not impossible. That’s why leading legal operations teams are investing in AI-powered contract analysis tools to do the heavy lifting. 

Beyond handling the tariff issue at hand, contract intelligence adds value across the board: 

• It surfaces hidden risks early, so you can address them before they become legal fires. 

• It drives better business decisions by quantifying how a policy change (like a tariff) will impact existing commitments. 

• It reduces those frantic “fire drills” where Legal is asked to review a mountain of contracts overnight. Instead of panic, you have answers at your fingertips. 

• It frees up legal professionals from rote review work and allows them to focus on strategy, negotiations, and advising the business. 

As one analysis noted, this isn’t just about avoiding downside risk, it’s about creating clarity and giving legal teams the data-driven power to lead. In a world where tariffs and other commercial realities can change overnight, such foresight is becoming indispensable. 

How AI-Powered Tools Like ThoughtRiver Help 

Modern AI-driven contract review platforms (such as ThoughtRiver) are game-changers in making contract intelligence a reality. Instead of combing through contracts one by one, legal teams can leverage AI to rapidly pinpoint relevant clauses and risky terms across thousands of documents. 

With an AI tool, you can: 

• Search contracts at scale for specific clauses or keywords (e.g. find every mention of “tariff” or “duty” in your agreements). 

• Identify deviations in language by comparing clause wording across contracts to spot which agreements have non-standard or high-risk terms. 

• Analyze interconnected terms, understanding how a change in one clause (like a new tariff in a pricing provision) might interact with another (like a force majeure clause) to create compound effects. 

• Prioritize action by generating reports that flag the contracts (or specific clauses) that deserve immediate attention, so you can triage effectively and build a playbook for remediation. 

All these capabilities are not theoretical, ThoughtRiver’s platform is powered by a legally trained AI model (Lexible™) specifically designed for contracts. This means it’s not just doing keyword matching, but actually interpreting contract language in context - much like a human lawyer would, but at superhuman speed and scale. 

By deploying such technology, legal teams transform their role. Instead of being the department of “no” or the bottleneck that slows deals down, they become enablers of smart business moves. When an external crisis hits - whether tariffs, pandemics, or something else - a tech-empowered legal team can instantly assess the impact on the business’s obligations and options. That kind of agility can save millions, preserve key relationships, and even unlock opportunities (for instance, finding contracts that allow renegotiation might let you secure better terms proactively). 

From Firefighting to Foresight: Be the Legal Team That Leads 

Ultimately, the current tariff stay is a wake-up call wrapped in a temporary relief. It’s reminding companies that uncertainty is the new normal in global trade. Today it’s tariffs; tomorrow it could be something else. The question for in-house legal teams and general counsel is: will you be reactive, scrambling with each new crisis... or proactive, ready and armed with insights? 

Adopting a challenger mindset means not accepting the status quo of endless firefighting. Instead, challenge your team and your organization to leverage this moment. Use the lull in tariff action to build a more resilient contract foundation. Implement the processes and tools that give you visibility into every nook and cranny of your contractual landscape. By doing so, you turn Legal from a last-minute firefighter into a forward-looking guardian of the company’s interests. 

The broader business will thank you for it. When the next shock comes, instead of midnight phone calls and war-room triage, you can present leadership with a clear analysis: “Here’s how we’re affected, and here’s our plan.” That level of preparation not only avoids losses and legal disputes but also instils confidence across the company that Legal is on top of things. 

Seize the Moment (Before the Next Storm) 

The pause in tariffs won’t last forever. Global trade chaos will throw new challenges our way, it’s just a matter of when. Now is the time to seize the moment and get ahead of those challenges by intelligently reviewing and managing your contracts. The payoff for this proactive approach is huge: fewer nasty surprises, more control over outcomes, and a stronger negotiating position come what may. 

Don’t wait for the headlines to turn dire again before you act. Take this opportunity to harness AI-powered contract intelligence and turn your contracts into a source of strength rather than anxiety. 

Ready to move from reactive to proactive? Equip your legal team with the tools and insights to navigate whatever comes next. Book a demo of ThoughtRiver today to see how AI can help you surface risk, drive better decisions, and eliminate the legal fire drills for good. 

Disclaimer: This post is for informational purposes only and does not constitute legal advice. Always consult qualified legal counsel for advice specific to your situation.