#United States #California #contract management #Agiloft #Trade Disruptions

Global Trade Disruptions Lead to Contract Overhaul

As global trade relations continue to face strains, a recent report from Agiloft reveals that an overwhelming 92% of organizations are adjusting their contracts to integrate tariff-related clauses. This report, titled Navigating Tariff Turbulence: The Operational Impact of Global Trade Policies on Contract Management, sheds light on how trade volatility is establishing new norms in corporate strategy and contract management.

The Landscape of Change

The survey included insights from over 600 professionals in legal, procurement, IT, and finance sectors across the U.S. and U.K. The findings indicate that the landscape of corporate contracts is evolving amidst intensified geopolitical tensions and tariff concerns. Notably, 49% of U.S. firms and 52% of U.K. organizations reported terminating supplier relationships as a direct consequence of these tariffs.

The adaptation does not stop at merely making changes to existing agreements; organizations are scrambling to engage with new suppliers in formerly uncharted markets, with nearly 57% acknowledging that tariff pressures influence their decision-making processes.

Rising Complexity and Compliance Challenges

With 73% of the respondents indicating that tariffs are increasing the complexity of contracts, the struggle to keep pace with the evolving trade policies is palpable. Almost 53% expressed difficulties in tracking the constant influx of tariff-related updates. 49% of companies lament the sheer volume of contracts that require review and alteration due to regulatory changes, which has intensified operational pressures on legal and procurement teams.

Collaboration between departments, particularly between legal, procurement, and finance, has also been identified as inadequate. A significant 38% of U.S. respondents highlighted that the lack of real-time cooperation undermines their ability to navigate these complexities, while 42% of U.K. counterparts pointed to insufficient intelligence regarding contracts as a notable barrier to innovation and adaptation.

Navigating Operational Pressures

The ripple effects of tariff complexities extend beyond the legal realm, presenting financial ramifications that threaten organizational stability. Key concerns include:

• - Increased costs of imports—identified as the primary threat by 49% of organizations.
• - The impact tariffs have on customer pricing and demand, which 47% reported as a growing concern.
• - Ongoing uncertainties concerning compliance which 44% of respondents ranked as a significant worry, alongside reduced profit margins experienced by 42%.

As trade tensions mount, a startling one-third of organizations indicate that adjustments to existing contracts with suppliers or clients are happening with heightened frequency. Specific to the U.K., 45% expressed considerable anxiety about supply chain disruptions, compared to 30% in the U.S.

Solutions to Evolving Needs

In recognition of these challenges, Agiloft has acquired Screens, aimed at equipping organizations with actionable playbooks that address tariff-related contract risks. Their resources include a Buyer's Perspective for supplier contracts, a Seller's Perspective for commercial commitments, and critical terms to help legal teams swiftly identify tariff-relevant clauses. These tools not only aim to streamline processes but also are pivotal in fulfilling compliance requirements.

Agiloft's AI-integrated Contract Lifecycle Management (CLM) platform stands out as a fundamental asset amid these changing dynamics. With AI embedded at every contractual stage, businesses can aim to enhance visibility, reduce review times by 80%, and maneuver through regulatory changes more adeptly. This transformation advocates for a shift from mere contract management to a pro-active strategy that secures sustainability against unpredictable events.

Conclusion

As companies brace for ongoing geopolitical disturbances, the findings underscore the crucial evolution of contracts as strategic assets rather than transactional documents. With data-driven practices becoming essential, organizations are called upon to prioritize contract management as a central pillar of their operational strategies—led by insights that inform better decision-making while ensuring compliance and transparent supplier relationships.

For complete insights, the full report can be accessed here. To delve deeper into how to effectively navigate these tariff-related challenges, be sure to register for Agiloft's upcoming webinar scheduled for September 18, 2025.