Impact of US-EU tariffs on commercial contracts
07/08/25
After four months of uncertainties, the US and the EU have reached a verbal framework agreement with respect to trade tariffs. Based on this verbal framework agreement, the US will impose a 15 per cent tariff ceiling on all imported goods from the EU with exceptions for certain products. The EU has suspended its additional counter tariffs on US products imported into the EU. However, since the agreement is not worked out in detail, uncertainty remains.
What does this mean for your business?
The past few months for most countries a general 10 per cent reciprocal tariff has been in place, however the newly published country specific reciprocal tariffs came into effect as of 7 August 2025. This will mean higher tariffs for a substantial number of countries.
The US tariffs on goods imported from the EU will increase the cost of doing business across borders, have implications on supply chains, and may trigger delays in performance or delivery. It is crucial to understand the implications of the new tariffs on your business and contractual relationships.
A key question is: who bears the costs of these new tariffs? In principle, it is the importer of record that will bear the costs of the new tariffs. However, if the contract includes – for example – price adjustment clauses, unforeseen circumstances provisions, or a force majeure clause that describes specific force majeure events, the cost may be shifted contractually to the buyer.
Actions to consider
Given the impact of tariffs on commercial contracts, companies need to take steps to mitigate risks and adapt to the changing trade environment.
Existing commercial contracts
To assess whether your current contracts provide protection, review your contracts on the following topics.
- Scope of obligations – who is responsible for what?
- Price (indexation / adjustment) provisions – fixed or adjustable pricing?
- Change of law provisions – does the contract cover tariff increases?
- Delivery terms and Incoterms – who bears the risk / costs at each step?
- Exclusivity provisions – does the contract restrict flexibility in sourcing?
- Contract duration and extension– how long is the (current) term and will the contract automatically be extended?
- Termination provisions – does the contract include specific early termination grounds?
- Force majeure or unforeseen circumstances – does the contract specify specific events that may qualify as force majeure?
Under Dutch law, contractual adjustments may be possible due to unforeseen circumstances (article 6:258 Dutch Civil Code). However, Dutch courts are strict with applying this legal principle. As an example, according to Dutch courts COVID-19 was considered an unforeseen circumstance that in certain situations could justify a contractual adjustment.
Tariffs and inflation typically are not considered unforeseen circumstances, unless the magnitude and unpredictability are extreme, but that depends on the specific circumstances of the case and requires a review on a case-by-case basis.
For contracts concluded before the campaign for the US presidency and the US presidential elections, the increased import tariffs may still have been unforeseen.
New commercial contracts
For new commercial contracts, it is recommended to evaluate whether incorporating a certain level of flexibility is desirable to effectively manage potential uncertainties. This can be done by aligning your contracts with your (new) sourcing strategy and including specific provisions, for example:
- Clearly allocate tariff risk, stating which party bears any current or future tariffs.
- Include price adjustment mechanisms tied to tariffs or similar economic events.
- Include changes of law provisions that explicitly address any legal or financial impacts caused by international tariffs.
- Ensure force majeure provisions are tailored to cover economic hardship due to trade policies.
- Include renegotiation or (early) termination provisions, especially for long-term contracts.
- Consider including or excluding exclusivity provisions, to the extent flexibility is required for your business.
Moreover, since we see that tariffs are implemented for specific industries and as more deals are concluded / there is differentiation of applicable reciprocal tariffs for the different countries of origin, the accurate classification and origin of goods become, from a customs perspective, increasingly critical to avoid miscalculations and ensure compliance. For example, Industries such as pharmaceuticals and semiconductors usually attracted a 0 per cent duty rate. With the new 15 per cent tariff, businesses may see a significant impact on costs. And, since they have never been confronted with tariffs before, they lack the knowledge/qualified personnel to properly deal with them.
Contact us
Claudia Buysing Damsté
Partner, International Trade, Customs, Sustainable supply chains, PwC Netherlands
Tel: +31 (0)65 103 04 63
Senior Manager, Digital law & Commercial Contracting, PwC Netherlands
Tel: +31 6 53 20 15 78
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