"Tariff" might be the President's favorite word, but for businesses, it's becoming a nightmare. In this episode of Letters of Intent, Pankaj Raval and Sahil Chaudry break down the new "Trump 2.0" trade regime.

They explain why tariffs are no longer just a trade tool but a "core policy weapon," how "tariff stacking" can quietly triple your landed costs (up to 67% on some goods), and why courts are rejecting "Force Majeure" as an excuse to break contracts. If you import goods, you need to audit your agreements now—because silence on tariffs means you foot the bill.

Takeaways

• Tariffs are a Weapon: The administration is using tariffs as a broad economic tool, not just for trade disputes. Expect a baseline 10% global tariff plus country-specific penalties.
• The "Stacking" Trap: It’s not just one duty. You face a baseline tariff, plus Section 301, Section 232, and reciprocal tariffs. This "stacking" effect can increase costs by 40-100% overnight.
• Force Majeure is Dead: Courts have ruled that tariffs are "foreseeable" market risks, especially when announced publicly on social media. You cannot use "Act of God" clauses to escape a contract just because it became expensive.
• Audit Your Contracts: Review your "Fixed Price" and "Change in Law" provisions. If your contract is silent on who pays new tariffs, the burden usually falls on the performing party (the importer).
• Drafting for Uncertainty: Future contracts need explicit tariff allocation. Include triggers for price adjustments, renegotiation rights, or termination clauses if duties spike beyond a certain threshold.
• Preserve Refund Rights: Even if tariffs are later ruled illegal by the Supreme Court (which is pending), you won't get a refund unless you actively preserved your rights.

Soundbites

• "Trump has said repeatedly, tariffs are the most beautiful word in the dictionary."
• "We're not just talking about a few targeted duties. We're talking about a baseline global tariff regime."
• "A sudden 20% increase... with Indian goods right now... you're talking about upwards of 67%. That can vaporize your entire pricing model."
• "Courts are consistently saying [you can walk away] only if your contract says you can."
• "It's almost impossible to argue surprise... generic force majeure clauses... it's just not working."
• "Contracts have to become living, breathing documents that can respond to tariff risk."

Keywords

Tariffs, Trump 2.0, Trade War, Supply Chain, Force Majeure, Commercial Contracts, Import/Export, Customs, Risk Management, Tariff Stacking, Carbon Law Group

🔗 Learn More

Website: carbonlg.com

Connect with Pankaj: https://www.linkedin.com/in/pankaj-raval/

Connect with Sahil: https://www.linkedin.com/in/sahil-chaudry-6047305/

Trademark Watch Service: https://carbonlg.com/introducing-carbon-laws-new-trademark-watch-service/

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