IMPACT OF THE TRADE WAR ON BUSINESSES: UNDERSTANDING AND MITIGATING RISKS
The ripple effects of the trade war initiated by the US are far-reaching, carrying consequences that cut across jurisdictions and sectors – even those not directly affected are feeling the macro effects.
Businesses are wise to consider the implications of the trade war, whether from the immediate effects of changes to applicable tariffs themselves or the knock-on effects and uncertainty caused by the stop and go approach taken by the US in changing its tariff regime and the retaliatory measures of other countries. Changes such as increases in the cost of doing business, supply chain disruption and political and economic uncertainty increase the risks faced by businesses engaged in international trade.
Businesses looking to proactively manage the array of risks posed by the trade war should consider their exposure and opportunities holistically. In addition to exploring trade-law remedies, that involves considering solutions available through international investment law. Businesses should also examine existing commercial contracts for key provisions that may be relied upon to manage new risks and negotiate commercial contracts with these new commercial realities in mind.
On the contract side, the key contractual clauses to focus on are those that are most likely to be relied upon to manage the risks and increased costs created by the recent trade measures. These are the clauses that businesses or their counterparties are most likely to try to rely on to terminate contracts, excuse non-performance or seek relief from the impacts of trade-related pressures.
Jul-Sep 2025 issue
McCarthy Tétrault