Manufacturers face greater exposure to tariff volatility than almost any other sector, according to legal experts at Foley and Lardner LLP.
Changes in tariffs can increase input costs, disrupt production planning, undermine pricing assumptions, and put pressure on supplier relationships across entire industries.
The risks are sharpest where manufacturers rely on globally sourced components, long lead times, or concentrated production in higher-risk jurisdictions.
Gregory Husisian, John E. Turlais, Parker White, and Lindsey P. Zirkle of Foley and Lardner argue that tariff risk must be embedded across sourcing, production, finance, and customer-planning decisions.
Treating tariff exposure as a customs issue alone leaves businesses dangerously underprepared for the pace of change seen in recent trade policy.
The first recommended step is to map which inputs and product lines carry the greatest vulnerability to tariff changes and assess the resulting pressure on margins.
Identifying raw materials, components, and finished goods most at risk allows businesses to prioritise resources and responses before disruption takes hold.
The second check involves reviewing contracts for tariff-related provisions, particularly those negotiated before the current period of volatility began.
Businesses should examine whether existing agreements address tariff-related cost increases, price adjustment rights, delivery obligations, and termination or renegotiation mechanisms.
As the authors note, contract terms often shape whether tariff pressure becomes manageable or acute, and who ultimately bears the risk of changes.
The third area of focus is coordination between trade compliance personnel, operations teams, and finance departments, recognising that tariff exposure is not only a legal issue.
Manufacturers that operate with those functions in silos risk misreading their true exposure and missing opportunities to adjust before costs escalate significantly.
The authors stress that manufacturers which assess tariff-sensitive inputs, review contractual exposure, and build operational flexibility will be better positioned to withstand future trade disruption.
In the current environment, tariff preparedness is increasingly part of basic business resilience, not an optional or secondary concern for legal teams alone.