Trump Tariffs Force British Companies To Rush Contract Changes With Suppliers

British companies are hastily moving to renegotiate supplier contracts as they grapple with the looming impact of heightened US tariffs, fresh data reveals. A comprehensive survey examining firms with over 5,000 employees indicates 90 per cent anticipate President Trump’s import duties will negatively affect their revenues and profits, prompting a widespread search for cost-saving measures.

The research, conducted by contract management software provider Icertis, shows 55 per cent of organisations are prioritising contract reviews to identify savings and secure improved terms. These revisions specifically target break clauses that could provide protection against newly imposed levies.

Bernadette Bulacan from Icertis emphasises that organisations’ immediate response to protect profit margins involves scrutinising existing customer and supplier relationships. Companies are actively incorporating termination rules and force majeure clauses within contracts to address tariff-induced costs, whilst simultaneously seeking alternative suppliers in non-affected countries.

The Trump administration’s 90-day pause on reciprocal tariffs, announced on 8 April, approaches its July expiration date. Despite securing a partial tariff agreement with the UK, most British goods face a 10 per cent tariff in US markets, elevating the average US tariff rate from 1 per cent to beyond 6 per cent. The European Union continues negotiations with the White House to prevent potential 55 per cent tariffs on its goods exports.

The survey, encompassing 1,000 companies across Britain, the United States and India, reveals nearly half are re-evaluating their supplier base to circumvent tariffs. These organisations are restructuring supply chains and manufacturing facilities, whilst considering the termination of relationships that become commercially unviable under new cost pressures.

Approximately 40 per cent of UK firms indicate they will absorb increased costs into their margins, while just over one-third plan to raise consumer prices. Legal experts suggest companies should consider implementing price adjustment clauses to account for tariff fluctuations, drawing parallels with how force majeure clauses evolved during the pandemic.