What APAC GCs Need to Know About Tariffs and the 90-Day Pause

The recently announced 90-day pause on the rollout of the U.S.’ reciprocal tariffs has created a temporary buffer, but General Counsel (GCs) in Asia-Pacific (APAC) enterprise firms should treat this as a strategic window to prepare — not a reprieve.

The base global tariffs of 10% will remain, and China has been hit with 125% of tariffs, with blanket tariffs of 25% on steel, aluminium, autos, and auto parts also in place.

Asian stock markets were among the hardest hit by this tariff whiplash experiencing a 12.61% drop.

While tariffs have long been part of global trade policy, the long-term trend of shrinking tariffs has been reversed with Taiwan, South Korea, Vietnam, Thailand, and Malaysia (whose exports to the U.S. have seen substantial growth since 2018) facing heightened exposure and increased vulnerability under these measures.

Trade tensions can shift rapidly, and legal departments must be ready to respond decisively in their contracts to minimize operational, contractual, and reputational risks.

The role of Legal AI in navigating tariff risk

Legal AI tools don’t replace legal strategy —  they supercharge it. Such tools allow GCs to be the resilience leaders in their firms, driving strategies which avoid the worst of trade instability. Specialized AI tools can speed up contract review to detect tariff-related clauses, allowing GCs to prioritise which contracts need the most urgent attention, and helping to establish playbooks for future tariff-proof contracts.

AI can provide real-time alerts and workflow automation to monitor trade law changes and ensure proactive compliance.

Implications of tariff whiplash for APAC-based enterprises

1. Supply chain disruption and legal exposure

Many APAC manufacturers and exporters rely heavily on U.S. markets. If tariffs are reinstated at or near their proposed levels, companies may face:

• Contractual disputes where pricing or delivery terms are no longer viable.
• Supply chain rerouting pressures, which bring regulatory and legal complexity.

GCs must assess whether their contracts provide any relief under force majeure, change in law, or hardship clauses, and whether such clauses are enforceable under governing law.

2. Cross-border compliance complexity

A unilateral tariff regime creates uncertainty beyond cost impacts. Enterprises must navigate:

• Dual-layered compliance, especially where goods transit through multiple jurisdictions.
• Country-of-origin rules under closer scrutiny, particularly where firms may be accused by the U.S. of transshipment or mislabeling to avoid tariffs.
• New reporting and documentation obligations under U.S. Customs and Border Protection enforcement. Contracts should include clear obligations around country-of-origin disclosure, as these are used to dictate which tariff is due over the product.

3. Contractual and commercial pressures

Tariffs almost always translate into increased input costs, impacting pricing, profitability, and ultimately customer relationships. GCs should examine:

• Existing pricing structures in contracts — are they fixed or adjustable? Contracts that lock in fixed pricing without adjustment options expose the business to margin erosion.
• Whether cost escalation clauses provide sufficient flexibility.
• Risk of dispute escalation if one party refuses to absorb the increased cost. GCs must assess whether arbitration or litigation is the default, and which jurisdictions and court govern resolution.

Priority actions for GCs right now

1. Audit contracts for tariff risk

Conduct a targeted contract review of supplier, distribution, and customer agreements, particularly those with U.S. connections or pricing dependencies. Focus on:

• Tariff pass-through language
• Change of law provisions
• Termination for convenience or cause
• Dispute resolution mechanisms

Legal AI platforms can accelerate this review by flagging relevant clauses across thousands of contracts in minutes.

2. Map legal exposure across the supply chain

Work cross-functionally with operations teams to create a legal supply chain map:

• Identify which goods, components, or services are exposed to U.S. trade shifts.
• Analyze sourcing routes for vulnerability under customs scrutiny.
• Evaluate any restructuring of supply or delivery through a legal lens.

3. Coordinate with internal and external stakeholders

GCs are uniquely positioned to lead cross-functional tariff response planning:

• Brief the C-suite and board on legal scenarios and enterprise risk.
• Coordinate with procurement, compliance, and finance to align contract strategies.
• Engage with U.S. legal counsel to monitor the political and legal developments that may affect future trade regulation.

Looking beyond the 90 days: Preparing for all scenarios

What happens after the 90-day pause? At least three plausible scenarios exist:

1. Full-scale rollout of reciprocal tariffs, triggering wide-ranging duties across the globe.
2. Targeted tariffs on certain industries or high-surplus countries (e.g., semiconductors, EVs, pharmaceuticals, metals such as steel and aluminum).
3. Policy paralysis due to litigation, lobbying, or political deadlock, but with sustained uncertainty.

GCs must ensure their organizations can operate across any of these conditions, through contract flexibility, compliance readiness, and real-time legal risk analysis.

Conclusion: Tariff readiness is a strategic priority

The current pause offers GCs a rare chance to get ahead of the curve. Whether the full U.S. tariff agenda materializes or not, enterprises with U.S. exposure are operating in an environment of chronic trade instability.

GCs must lead the charge in building legal resilience by stress-testing contracts, tightening compliance frameworks, and advising leadership on proactive strategies. Because when the next wave of tariffs comes, legal preparedness will be the difference between disruption and agility.

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