Collaboration Is Crucial to Navigating the New Tariff Landscape

As during the Covid-19 pandemic, force majeure provisions and pricing adjustment clauses written pre-2023 are likely inadequate for today’s volatility. The new regulatory framework demands enhanced record-keeping, and customs authorities are increasingly scrutinizing origin claims. The closing of the de minimis loophole means that even low-value imports now require more paperwork, delays, and costs.

Decades-long business plans built on free trade agreements are out the window along with the easy movement of goods within free trade zones. And just like during the pandemic, supply chain restructuring requires an assessment of both the immediate impact of tariffs and longer-term geopolitical risk exposure. These challenges mean it’s especially important now for in-house counsel to rely on cross-functional teams.

Breaking Down Silos

When tariffs unexpectedly shift, the natural corporate response may resemble the five stages of grief—denial (“This won’t affect us”), anger (“This is impossible to manage!”), bargaining (“Maybe we can get exemptions”), depression (“Our margins are doomed”), and acceptance. My advice? Skip straight to acceptance—and action.

It’s tempting to initially approach a sudden tariff as a purely legal problem. Tariffs, after all, are based on federal laws such as the International Emergency Economic Powers Act. But it’s important for counsel to remember that tariffs can be thought of as an input cost like raw materials, labor, or energy. These costs often, but not always, can be managed.

In addition to analyzing regulatory language to determine the immediate impact, counsel needs to work with several departments:

• finance to model the impact
• procurement to explore alternatives
• operations to determine implementation feasibility
• IT to implement programming changes that need to happen quickly and accurately
• sales and purchasing, which must explain who has to collect the tariffs, and how

Timeliness is crucial in many instances. For example, every vehicle of every type sold in the US needs rubber tires to hit the pavement. The industry currently imports about half of its requirements from countries such as Thailand, Indonesia, South Korea, Japan, and Malaysia.

Tariffs may make some of these imports prohibitively expensive and prompt scrambles to purchase long-term supplies from US-based plants. As this capacity dries up, firms moving too slowly may find themselves having to pay for more expensive imported tires.

This type of analysis of tariff versus domestic supplier capability and capacity is happening across thousands of component inputs now, and counsel needs to use a multi-team approach. Meeting frequently with defined decision-making authority, reporting clearly to leadership, and being able to move quickly are all key to successfully navigating this issue.

Counseling Patience

Executives facing supply chain disruptions often demand immediate answers and perfect solutions, which may not be feasible. Using “patient pragmatism”—acknowledging ambiguity while taking measured steps—to navigate uncertainty is a helpful mitigation approach.

Try to differentiate between signal and noise, because not every announcement from the White House warrants action. Develop scenario planning with defined trigger points for different actions. Focus on resilience over reaction, so the organization invests in supply chain flexibility for the future.

When executives press for immediate action, ask them to articulate the additional information they wish they’d had before deciding. This simple question often reveals that waiting for more clarity is the prudent approach.

Supporting Your Teams

Behind every supply chain disruption and tariff calculation are people experiencing significant stress. At Ford Motor Co., I witnessed our logistics and compliance teams working weekends for months during previous trade disputes.

The current environment is even more demanding. Your logistics team may be juggling impossible deadlines, uncertain transportation timelines, and mounting costs. The same applies to your procurement teams negotiating with anxious suppliers and your compliance staff facing increased audit pressure.

Scheduling regular check-ins focused on workload sustainability, creating “no meeting” blocks on your calendar to allow focused work time, and celebrating small wins can bolster team morale. Acknowledge that this situation isn’t anyone’s fault within your organization. During stressful periods, blame can quickly become a corporate pastime—don’t let it happen.

The US-based management team’s approach to trade disruptions can come across as tone-deaf to teams in Asia or Europe, so it’s also important to consider relationships with international colleagues and partners. While US teams might view new tariffs as an operational challenge, colleagues in targeted countries may experience them as economic threats.

Consider creating forums where international colleagues can express concerns without judgment. Offer to adjust communication timing to accommodate global time zones. (Those 3 a.m. calls shouldn’t always fall on the same regions.) Learn about the local economic impact of tariffs in countries where you have team members, and frame decisions in terms of global business sustainability rather than US-centric priorities. Invest time in relationship-building across cultures.

The Bottom Line

The new tariff landscape demands that legal departments serve as both strategic partners and guides through uncertainty. By fostering genuine cross-functional collaboration, counseling patience without paralysis, and addressing the very real human impacts, in-house counsel can help their organizations navigate these choppy waters.

At our law school, I often remind our staff and faculty: “We can’t control the weather, but we can build a better ship.” Building that ship requires bringing together the engineers, navigators, and captains—from all corners of the globe—in a coordinated effort guided by calm, clear-eyed, and culturally aware counsel.

Remember that today’s trade challenges, while significant, are ultimately temporary. Your leadership in building resilient, human-centered approaches will serve your organization long after the current tariff regime has become a footnote in trade history.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Terence Lau is dean of the Syracuse University College of Law. He previously served in the office of the general counsel at Ford Motor Co.

Write for Us: Author Guidelines