Tariff Clauses and the Trade War: How Sellers Can Protect Themselves
Understanding the new wave of tariff clauses and what every importer needs to know
Over the past few years, global trade tensions have significantly impacted how businesses buy, sell, and transport goods across borders. From the U.S.–China trade war to the recent expansion of tariff enforcement under the “reciprocal trade” framework, importers are facing new layers of uncertainty.
But one change stands out above the rest — the rise of tariff clauses in business contracts. These clauses, which have become increasingly common in 2025, are reshaping the distribution of costs and risks between suppliers and buyers.
In this article, we’ll explain what these clauses mean, why they matter, and how Amazon and eCommerce sellers can protect themselves. Most importantly, we’ll outline how Proboxx helps clients stay compliant, cost-efficient, and in control even when trade rules change overnight.
1. The Evolving Landscape of Global Trade
The trade war that began several years ago hasn’t ended — it has evolved.
Following new U.S. tariff rounds targeting steel, aluminum, batteries, and strategic goods, governments worldwide are taking similar actions in response.
Key developments in 2025 include:
Reinforced U.S. tariffs on Chinese imports, including electronics, textiles, and consumer goods.
India, Vietnam, and Mexico are adjusting export incentives and tariff schedules to attract manufacturers relocating from China.
Europe is implementing its own carbon-border tariffs, affecting products with steel or aluminium components.
As a result, the entire supply chain — from manufacturers to sellers — is recalculating landed costs and rewriting contracts.
2. What Are Tariff Clauses?
A tariff clause is a section in a purchase or supply agreement that specifies who is responsible for additional customs duties or tariffs that might arise after the contract is signed.
Before trade tensions escalated, most suppliers offered fixed pricing, assuming stable tariff conditions.
Now, many are adding language such as:
“In the event of any new import duties, tariffs, or trade restrictions imposed after the signing date, the Buyer shall bear such additional costs.”
This clause shifts financial responsibility from the supplier to the buyer, allowing factories and exporters to protect themselves from unexpected policy changes.
While that may seem fair from a supplier’s perspective, for Amazon or eCommerce sellers, it can lead to unplanned expenses that erode margins.
3. Why These Clauses Are Becoming Common
Suppliers in Asia are under pressure. Raw material costs fluctuate, energy prices rise, and global demand remains unpredictable.
When a government suddenly increases tariffs by 10–20%, factories that operate on thin margins can’t absorb that cost.
By inserting tariff clauses, they:
Protect profit margins from volatility
Reduce financial exposure to trade policies
Shift currency and customs risks downstream to the buyer
For importers, especially small and medium-sized sellers, this introduces a new layer of risk — one that can easily wipe out profitability if left unchecked.
4. Real-World Impact on Sellers
Let’s illustrate this with a simple example.
A U.S. Amazon seller orders $50,000 worth of stainless-steel kitchenware from a supplier in Zhejiang under a DDP (Delivered Duty Paid) agreement.
At the time of signing, the applicable import duty is 8%. Two weeks later, a new tariff is introduced, adding an extra 10%.
If the contract includes a tariff clause, the supplier may issue an additional $5,000 invoice to cover the difference — or worse, delay shipment until the buyer agrees to pay it.
If the seller doesn’t have backup funds or a clear understanding of their Incoterms, the order stalls, and inventory runs dry just before Q4.
This is no longer a hypothetical scenario. At Proboxx, we’ve seen multiple clients caught in similar situations over the past year.
5. Common Types of Tariff Clauses
Not all tariff clauses look the same. Here are three main variations that sellers should watch for:
1. Cost-Pass-Through Clause
Specifies that any increase in tariffs, taxes, or regulatory fees will be passed on to the buyer.
Example:
“Buyer agrees to bear any increase in customs duty, VAT, or tariffs imposed after this agreement.”
2. Price-Adjustment Clause
Allows suppliers to revise unit prices in response to regulatory or fiscal changes.
Example:
“Seller reserves the right to adjust the price if changes in trade regulations increase the landed cost of goods.”
3. Delivery Suspension Clause
Gives suppliers the right to delay or suspend shipments until tariff disputes are resolved.
Example:
“In case of any change in tariff policy affecting delivery costs, Seller may postpone shipment until mutual agreement is reached.”
Each of these clauses shifts leverage away from the buyer unless negotiated carefully.
6. What Sellers Can Do to Protect Themselves
1. Review All Supplier Contracts
Before signing a new purchase order, review every clause related to tariffs, duties, and taxes.
Don’t assume that “DDP” covers all import fees — confirm in writing which party pays for customs, brokerage, and duty adjustments.
2. Negotiate Neutral Language
When possible, replace one-sided phrases with balanced terms such as:
“Any changes in tariffs or trade duties shall be reviewed jointly by both parties to determine fair allocation of costs.”
This creates room for discussion rather than automatic cost transfer.
3. Use FOB or FCA Terms for Transparency
By choosing FOB (Free on Board) or FCA (Free Carrier) terms, you separate the supplier’s responsibility from the import process.
This gives you visibility into the actual landed cost and more control over customs management.
4. Work With a Trusted Freight Partner
Your freight forwarder should provide up-to-date tariff data and HS classification validation.
This ensures your goods are correctly declared and eligible for lower-duty categories when possible.
5. Diversify Manufacturing Locations
If your entire product line is sourced from one country, you’re exposed to concentrated risk.
Consider alternate sourcing from Vietnam, India, or Mexico, where tariff structures may be more favorable for specific product categories.
7. The Role of HTS Classification in Reducing Duty Costs
Many sellers overlook a powerful tool in tariff optimisation: correct HTS (Harmonised Tariff Schedule) classification.
Each product entering the U.S. is assigned a 10-digit HTS code that determines its duty rate.
However, small variations in product description or material composition can result in large tariff differences.
For example:
Kitchen racks made of aluminium (HTS 7616.99.51) may carry a 10.5% duty.
The same rack classified as household shelving (HTS 9403.20.00) may have a 0% duty.
Proboxx Compliance Service helps sellers validate the correct HTS codes, ensuring both accuracy and cost-efficiency.
This process alone can save thousands of dollars per shipment while maintaining full legal compliance.
8. When Tariffs Become Negotiation Leverage
Tariff clauses are not always bad news. When understood correctly, they can actually be a negotiation tool.
For example, if a supplier insists on including a tariff clause, you can request:
Lower base pricing in exchange for assuming tariff risk.
Priority production slots or shorter lead times as compensation.
A cap on tariff-related cost adjustments (e.g., “not exceeding 5% of the order value”).
By approaching it strategically, you convert uncertainty into an opportunity for better terms.
9. Proboxx’s Role in Mitigating Tariff Risk
At Proboxx, we understand that tariffs aren’t just a customs issue — they’re a supply chain issue.
We work with hundreds of Amazon and e-commerce sellers who face shifting duty rates, changing Incoterms, and complex documentation requirements.
Here’s how we help our clients stay protected:
Tariff Monitoring and Updates
Our compliance team tracks tariff changes daily across major markets (U.S., Canada, EU, U.K.). We alert clients whenever their product category is affected.
HTS Code Validation
We verify every classification used in customs declarations, ensuring correct duty calculation and avoiding overpayment.
Landed Cost Analysis
We calculate the total cost per SKU, including freight, duty, insurance, and fees, to provide sellers with a clear picture of profitability before they ship.
Supplier Coordination
We assist in reviewing supplier contracts and flagging risky tariff language before orders are finalised.
Global Sourcing Strategy
For clients considering diversification, we analyse alternative manufacturing locations and expected landed cost differences.
This end-to-end approach helps sellers minimise surprises and maintain steady margins, even when trade policies shift mid-quarter.
10. Case Study: Protecting a U.S. Seller from a Tariff Shock
In mid-2024, one of our clients — a U.S.-based Amazon seller importing fitness accessories — faced a sudden 15% tariff increase on rubber and neoprene products.
Their supplier immediately issued a $12,000 surcharge under a tariff clause buried in the contract.
Instead of paying it, we stepped in to:
Review the HTS classification and confirm the product could qualify under an alternate, lower-duty category.
Re-route new shipments through Vietnam, where similar products carried zero additional tariffs.
Update Incoterms to FOB, removing the supplier’s control over customs valuation.
The result:
The client avoided the surcharge, reduced long-term costs by 18%, and strengthened their negotiating position for future orders.
11. Legal and Compliance Considerations
While freight forwarders and logistics providers can support with data and planning, final tariff responsibility lies with the importer of record.
That’s why sellers must maintain documentation that supports their declared HTS codes, country of origin, and customs valuation.
Here are three key compliance practices to adopt:
Keep all supplier invoices and bills of materials.
Customs may request proof of content or value.
Track substantial transformation rules.
If goods are assembled in multiple countries, the final “country of origin” depends on where the last significant manufacturing step occurred.
Update your customs broker.
Ensure that every shipment accurately reflects the correct classification and country of origin, in accordance with current regulations.
Proboxx’s compliance team guides all these points, ensuring that sellers maintain transparency and documentation in line with U.S. CBP (Customs and Border Protection) standards.
12. Final Takeaway
The new generation of tariff clauses is transforming the way business is conducted.
Suppliers are protecting themselves — and sellers must do the same.
The key lessons:
Always read and negotiate trade clauses before signing.
Understand your HTS classification and duty exposure.
Diversify your supply chain to spread geopolitical risk.
Partner with a forwarder who understands both logistics and compliance.
At Proboxx, we bridge the gap between freight operations and trade compliance, helping sellers plan smarter and ship with confidence, no matter how complex the global trade landscape becomes.
📞 Want to review your supplier contracts or duty exposure?
Book a free compliance consultation and let’s make sure your next shipment arrives legally, efficiently, and profitably.