If you sell to or buy from the United States, the last two years have been a moving target. The rates change, the exemptions change, and the paperwork that qualifies your goods changes with them. I’m not going to predict where the numbers land — by the time you read this they may have moved again. What doesn’t move is the contract law underneath it, and that’s where you can actually protect yourself.
A tariff makes performance cost more. It rarely makes performance impossible. Canadian and American courts generally treat a cost increase — even a brutal one — as a risk the parties took on, not as force majeure or frustration of contract. Unless your clause specifically names tariffs, duties, or a “change in law” as a trigger, don’t assume you can walk away or suspend delivery because a new duty blew up your margin. Try, and you may find yourself the one in breach.
This is the part most people never checked. In a goods contract, your delivery terms — the Incoterm, if you used one — decide who clears customs and pays the duty. Sell “DDP” (delivered duty paid) and that’s you: the seller eats the tariff. Sell on most other terms and the duty lands on the buyer at the border. The trap is a contract that’s silent, or that uses a delivery term that doesn’t match how you actually priced the deal. Go through your active contracts and answer one question for each: if a new duty hits this shipment, who is contractually on the hook? If you don’t like the answer, that’s the one to renegotiate first.
For anything you’re signing or renewing now, this is the fix. A proper tariff or change-in-law clause does four things: it defines the trigger (a new or increased tariff, duty, or surcharge imposed after signing), it allocates who bears it (seller absorbs, buyer pays, or the two of you split it), it gives a mechanism (a price pass-through or adjustment, or a duty to renegotiate in good faith), and it gives an exit — a right to terminate without penalty if the added cost crosses a threshold you can both live with. A one-line “prices are firm” is a great clause right up until it isn’t.
A lot of Canada–US trade can still cross tariff-free if the goods meet the trade agreement’s rules of origin and you hold the paperwork to prove it. That’s not automatic — it depends on where the inputs come from and whether you can certify origin. If your product might qualify, confirming it and keeping clean records is often worth more than any clause, because it takes the duty off the table entirely. Don’t assume you qualify, and don’t assume you don’t.
You can’t rewrite a signed contract on your own. But you have more room than it feels like. Read it first — you may already have a change-in-law or price-review clause you forgot was there. If you don’t, the move is to negotiate an amendment now rather than wait for the invoice fight, and to price the tariff risk into the next renewal. A short, businesslike amendment agreed before anyone’s angry is a lot cheaper than a dispute after a shipment is stuck.
If you’re staring at a contract and not sure who’s wearing the tariff, that’s a short conversation worth having before the next shipment goes out.
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