Are Trump's Tariffs a Force Majeure Event?

On April 2, 2025, President Trump enacted sweeping new import tariffs on products from all over the world. This led many businesses to worry about their ability to perform under pre-existing contracts. The broad import tariffs have already drawn retaliatory tariffs on U.S. goods. As the tension related to tariffs continues to increase, more and more businesses are looking for ways out of performing or being held in default under pre-existing contracts that are no longer commercially reasonable or even feasible to perform.  

One avenue businesses might take is to claim a force majeure event. Under a force majeure clause, a contracting party may be relieved of liability for its inability to perform or for its delay in performance if an enumerated event in the force majeure clause occurs. In the U.S., force majeure events are not implied and must be based on the specific language contained in the parties' contract. Typically, force majeure clauses will excuse a party's performance in the event that something beyond the control of the parties prevents one party from fulfilling its contractual duties. In some cases, the force majeure provision will explicitly name events that constitute a force majeure such as acts of God, earthquakes, floods, riots, strikes, war, etc. whereas in others the provision is a catch-all excusing performance that was made impossible by unforeseen events outside the party's control.  

Many force majeure clauses account for actions taken by a sovereign government that would seem to cover the type and scope of tariffs recently imposed, but the issue is not so simple. First, even where the force majeure clause lists government action as a qualifying event, courts will not find performance excused unless the government action made the party's performance impossible. Performance that is merely made more costly or difficult, but not impossible, may not excuse performance.  

Further, courts typically only apply force majeure clauses when the event constituting the force majeure was unforeseeable. With the recently imposed tariffs, it is difficult to know whether a court would find the tariffs unforeseeable because the President has long advocated for increased import tariffs and campaigned on the promise. Additionally, courts often view market fluctuations, particularly in the context of fixed-price contracts, as foreseeable. This too could prevent a force majeure event from excusing performance. Indeed, parties often plan for these types of risk when conducting international trade such as by providing the delivery terms or by specifying which party is responsible for paying duties and clearing the goods through customs.  

In order to properly invoke a force majeure clause, businesses should read the provisions in their contracts carefully and consult with an attorney. So too should companies seeking to enter into new agreements account for the shifting and unpredictable trading landscape. Burke, Warren, MacKay & Serritella attorneys are experienced in supply and trade agreements and are available to interpret existing and assist in drafting new force majeure clauses as the world navigates this new business environment.