Why Tariff Clauses Now Dominate Contract Strategy

Trade tariffs are turning contract management into a frontline strategy. With uncertainty reshaping the rules of global commerce, businesses in 2025 are hardwiring tariff clauses into nearly all their contracts in a bid to stay agile and protected.

New research by Agiloft, a contract lifecycle management (CLM) platform, reveals how firms are responding to the unstable trade environment by placing contracts at the centre of risk control.

In its report Navigating Tariff Turbulence: The Operational Impact of Global Trade Policies on Contract Management, Agiloft finds that 92% of organisations now include tariff-related provisions in contracts. This reflects a wholesale change in how companies handle disruption.

As tariffs continue to influence supply chains, pricing and supplier relationships, contracts are no longer administrative tools – they have become operational assets.

Prashant Dubey, Chief Strategy Officer at Agiloft, says: “Geopolitical volatility is now an everyday reality that demands constant adaptability. This report makes it clear: today's legal leaders are navigating unprecedented complexity and solid contracting processes have emerged as critical levers for ensuring resilience and managing unpredictability.

“From containing supplier costs to accelerating deal cycles, contracts are central to protecting margins and unlocking value. Yet, many organisations still lack good data-driven contracting process hygiene.

“CLM with integrated, fully-configurable AI is the catalyst that transforms contracts into strategic assets and operational instruments to maintain key customer and supplier relationships in the face of constant turbulence.”

Contracts as tools for operational resilience

Agiloft’s research team surveyed 600 professionals in legal, procurement, IT and finance across the UK and US.

The findings show how tariff pressure is reshaping business operations at every level. Legal departments are at the core, but the ripple effects are felt across teams. Contracts are now being revised more often and taking longer to approve. Processes once viewed as routine are now critical decision points.

More than half of those surveyed (53%) say they struggle most with tracking and applying ongoing tariff changes. Almost as many (49%) report being overwhelmed by the volume of contracts that now require revision or renegotiation. This weight is not only legal’s problem; in the US, 38% cite a lack of real-time collaboration across legal, procurement and finance teams as a challenge, while 42% of UK respondents report a lack of contract intelligence tools.

The business case for embedding tariff clauses is now clear. These provisions help guard against price swings and supply disruptions.

However, they also add layers of complexity. Managing high volumes of detailed contracts with embedded trade clauses demands updated systems and clearer workflows.

• 92% of companies now include tariff-related clauses in standard contracts
• 73% agree tariffs have increased contract complexity
• 71% say tariffs have driven up costs
• 55% report greater emphasis on compliance and legal review
• 40% say contracts now take longer to approve

Financial pressure mounts from all sides

Tariffs come with cost implications that cut across every business unit. Nearly half (49%) of those surveyed highlight increased costs for imported materials and products as their top concern. Another 47% are watching customer pricing and demand, worried about how price hikes may push clients away.

Compliance ranks third among top challenges, with 44% citing regulatory uncertainty. Reduced profit margins follow closely behind at 42%. With costs rising and margins squeezed, contracts now act as financial safety nets as well as legal records.

This complexity also prompts businesses to rethink how and where they buy. Contracts are being revised, renegotiated or abandoned altogether in favour of more agile options.

Supplier relationships shift

Tariff unpredictability is also shaking long-standing supplier agreements. More than a third of companies say they are renegotiating contracts with suppliers more frequently because of changing trade regulations. Meanwhile, 32% identify global supply chain disruption as one of the greatest tariff risks they face.

In the UK, 45% say supply chain disruption is a major issue – a higher proportion than in the US (30%). Almost half of companies on both sides of the Atlantic are walking away from existing suppliers: 48% in the US and 52% in the UK report abandoning partnerships due to tariff-related pressures.

As a result, 54% have sought new suppliers in unfamiliar markets or regions, trying to find stability where old networks no longer provide it. This pivot brings new hurdles. About 57% say onboarding new suppliers now takes longer and requires more detailed compliance checks, which adds further pressure on procurement and legal teams.

With tariffs unlikely to disappear, companies now see agile contract processes not as a compliance tool but as a business imperative.

Contract lifecycle management platforms with built-in AI are stepping in to help, not only to speed up workflows but also to turn contracts into real-time sources of insight and protection.