How Trade Tariffs are Reshaping Contract Management

Tariffs have completely dominated discourse in business circles in 2025, with companies struggling to find firm footing amid an ever-evolving landscape.

In response to the lack of solid foundations, teams are attempting to wrestle back control by implementing tariff-related clauses into contracts, according to research from Agiloft. 

The data-first contract lifecycle management (CLM) specialist's latest industry report, Navigating Tariff Turbulence: The Operational Impact of Global Trade Policies on Contract Management, reveals 92% of firms are doing this, marking a seismic shift in how organisations are responding to trade disruption.

Contracts become strategic weapons against uncertainty

Agiloft's research team spoke to 600 legal, procurement, IT and finance professionals in the US and UK.

Their findings showcase the vital role contracts are playing on the frontline of strategic decision-making, as tariffs and political uncertainty reshape global commerce.

Companies are being forced into a balancing act: dealing with more frequent contract revisions and longer review cycles, alongside the need for enhanced cross-departmental collaboration – all while facing significant cost pressures and regulatory uncertainty.

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."

Legal teams drowning in tariff updates

The impact of tariffs is demonstrated by the fact 53% of respondents said they were struggling most with tracking and applying the constant stream of tariff-related updates. Almost half (49%) are overwhelmed by the sheer volume of contracts requiring review and renegotiation.

This burden extends beyond legal teams – 38% of US respondents cited a lack of real-time collaboration between legal, procurement and finance departments as a major hurdle, while around 42% of UK respondents are hindered by insufficient contract analytics or intelligence.

Trade-related contract provisions have become a business necessity. Though these clauses protect companies from unexpected cost fluctuations and supply chain interruptions, they create additional complexity for legal departments managing high volumes of agreements with increasingly sophisticated terms.

Organisations are responding by fundamentally rethinking their contract management approaches:

• 92% of organisations now have hardwired tariff-related language into their standard contracts
• 73% of respondents agree tariffs have increased contract complexity and made contract management more challenging, while 71% reported higher costs
• 55% report increased focus on compliance and legal review processes
• 40% state that contracts are taking longer to review and approve

The report reveals a ripple effect of operational and financial challenges caused by tariff complexity, leading to substantial business risks that extend far beyond compliance issues:

• Nearly half of organisations (49%) identify increased costs of imported materials and products as their primary threat
• 47% worry about the impact on customer pricing and demand – suggesting tariffs are creating pricing pressures that squeeze companies from both directions
• Regulatory uncertainty and compliance challenges rank as the third-biggest concern (44%), followed closely by reduced profit margins (42%)

Supplier relationships under unprecedented strain

Tariff uncertainty is fundamentally straining supplier relationships and procurement processes.

More than a third of companies report that contracts with suppliers or clients are being renegotiated more frequently due to changing trade regulations, while 32% identify disruption to global supply chains as one of their biggest tariff-related risks.

• 48% of US companies and 52% of UK respondents have exited existing supplier relationships as a direct result of tariff impacts
• Notably, UK organisations express significantly greater concern about supply chain disruption (45%) compared to their US counterparts (30%)
• 54% of all respondents state tariff-related pressures have led them to enter new supplier relationships in unfamiliar markets or regions
• Around 57% said tariffs have made supplier onboarding and compliance checks more complex or time-consuming