Your SME insider for supply chain, negotiations, and procurement
📌Agenda
✔ Negotiation Power Move – Tariff-Proofing Your Supply Chain: 5 Proven Tactics SMEs Are Using
✔ Breaking Insight – Why Standard "Force Majeure" Clauses Won't Protect You From Tariffs
✔ Case Study – How Linamar Restructured Contracts to Shield Against 25% Automotive Tariffs
✔ Trend Watch – Tools SMEs Are Using to Model Tariff Impact Scenarios
✔ ProcWee™ Takeaways - Your Implementation Plan
📖 Mini-Story
In April 2025, the U.S. administration imposed a 25% tariff on imported automobiles and auto parts (GEODIS, 2025). Ontario-based auto parts manufacturer Linamar Corporation, with operations in 75 facilities across 17 countries, recognized the need for swift action. Rather than immediately shifting production or abandoning markets, Linamar implemented a targeted approach focused on strategic contract negotiations and operational flexibility (Linamar Corporation, 2025).
CEO Linda Hasenfratz characterized tariffs as an "entrepreneurial opportunity," suggesting the company is exploring how to turn trade challenges into competitive advantages (Linamar Corporation, 2025).
🎧📝 Executive Briefing: Your Podcast
Tariff-Proofing Your Supply Chain: 5 Proven Tactics SMEs Are Using
🚀 Negotiation Power Move: Tariff-Proofing Your Supply Chain: 5 Proven Tactics SMEs Are Using
New clauses | Flexibility | Commitments
Implement "Tariff Trigger" Clauses
Add specific contract language that outlines how tariff costs will be shared between parties. Contracts with detailed tariff provisions have significantly fewer disputes than those using generic force majeure language (Bloomberg Law, 2025).Create Origin Flexibility Agreements
Negotiate contracts that allow adjustment of manufacturing origins without penalty. Companies with origin flexibility clauses can significantly reduce tariff impact during trade disputes (Airiam, 2025).Develop Dual-Sourcing Partnerships
Build relationships with suppliers on both sides of tariff boundaries. Mid-sized manufacturers with dual-sourcing arrangements respond faster to trade disruptions than single-source companies (GEODIS, 2025).Structure Tiered Price Agreements
Create pricing models with predetermined adjustments based on tariff thresholds. SMEs with tiered price agreements maintain higher margins during trade disputes (Netstock, 2025).Deploy "Good Faith Negotiation" Commitments
Include explicit commitments to renegotiate in good faith when tariffs exceed specific thresholds. This approach preserves more supply relationships during tariff cycles compared to rigid contract terms (Dentons, 2025).
🧠 Breaking Insight
Reality | Time | Preparation
Why Standard "Force Majeure" Clauses Won't Protect You From Tariffs
The Foreseeability Problem
Tariffs are increasingly viewed by courts as foreseeable business risks rather than unforeseeable events. Standard force majeure clauses failed to provide relief from tariff-related contractual obligations in most instances (Bloomberg Law, 2025).The Proportionality Gap
Even when force majeure is recognized, courts typically require that performance be impossible, not merely more expensive. Economic hardship alone rarely triggers force majeure provisions (K&L Gates, 2025).The Notification Pitfall
Most force majeure clauses require prompt notification, typically within 30 days. Yet tariff impacts often manifest in supply chains gradually—leading to missed critical notification windows and lost protection (Dentons, 2025).
🏆 Case Study
Production Realignment | Contract Restructuring | Regulatory Expertise
How Linamar Corporation Is Responding to 25% Automotive Tariffs
Situation
Linamar Corporation, a Canadian automotive parts manufacturer with approximately $7.5 billion in annual revenue, found itself caught in the crossfire of the 2025 U.S.-EU trade tensions. With manufacturing operations in 75 facilities across 17 countries and customers on both sides of the Atlantic, the company faces potential tariff challenges on multiple fronts (Linamar Corporation, 2025).
Actions
As documented in their press statements and investor communications, Linamar is implementing several strategic responses:
Strategic Production Realignment
Evaluating how to optimize existing facilities across borders without moving operations to the U.S. to avoid tariffs (Linamar Corporation, 2025).Contract Restructuring
Reviewing customer agreements to determine where tariff costs can be shared or passed through, focusing on transparent, formula-based approaches (Linamar Corporation, 2025).Regulatory Expertise
Leveraging compliance teams to ensure proper classification of components under USMCA rules to maximize tariff-free treatment where possible (Linamar Corporation, 2025).Entrepreneurial Approach
Exploring how to turn trade challenges into competitive advantages (Linamar Corporation, 2025).
Expected Results
Resilient Operations
Focusing on maintaining operational continuity rather than dramatic production shifts.Relationship Preservation
Aiming to maintain customer relationships through transparent, collaborative approaches to tariff challenges.Long-Term Strategic View
Viewing the current trade tensions as requiring strategic adaptation rather than reactive measures.
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📈 Trend Watch
Tariff schedule | Origin simulation | Supporting software
Tools SMEs Are Using to Model Tariff Impact Scenarios
Forward-thinking mid-sized manufacturers are leveraging accessible tools to model and manage tariff impacts:
Harmonized Tariff Schedule (HTS) Analyzer Tools
Software that helps SMEs identify alternative product classifications that may qualify for lower tariff rates or exemptions. These tools are essential for navigating complex tariff codes (Netstock, 2025).Origin Simulation Platforms
Tools that allow manufacturers to model how changes to their supply chain would affect product origin calculations under various trade agreements. Essential strategies for small businesses during tariff turbulence (My USA Corporation, 2025).Free Trade Agreement Qualification Software
Applications that help SMEs determine if their products qualify for preferential treatment under remaining free trade agreements. Critical tools in action plans for importers (GEODIS, 2025).
"These tools are putting sophisticated tariff analysis capabilities within reach of companies that can't afford dedicated trade compliance teams," explains Airiam's 2025 tariff impact guide (Airiam, 2025).
ProcWee™ Takeaways & Action Steps
Apply these SME-proven tactics to shield your supply chain from escalating tariffs:
Audit your contracts immediately – Review all supplier and customer agreements for tariff-specific language
Implement specific trigger clauses – Replace vague force majeure provisions with detailed tariff-sharing mechanisms
Model multiple origin scenarios – Identify alternative manufacturing and sourcing configurations to minimize exposure
Create pricing flexibility – Develop formulas that objectively adjust pricing based on documented tariff impacts
Consider geographical diversification – Evaluate potential production in both US and EU markets to serve customers locally
💬 Ready to transform your negotiation outcomes?
As a specialist in strategic procurement, supply chain optimization, and negotiation psychology, I help organizations achieve significant cost improvements while strengthening critical supplier relationships – even in volatile market conditions.
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Two ways I can support your organization:
Virtual Negotiation Workshop: Customized training for your procurement and leadership teams (ask me for onsite trainings, our program is very popular)
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Sources
Airiam. (2025). 2025 U.S. Tariff: Complete Impact & Action Guide for SMBs. Retrieved from https://airiam.com/blog/2025-u-s-tariffs-complete-impact-action-guide/
Bloomberg Law. (2025). Commercial, Overview - Contractual Defenses to Tariff Price Increases. Retrieved from https://www.bloomberglaw.com/external/document/XEEIGBTS000000/commercial-overview-contractual-defenses-to-tariff-price-increas
Dentons. (2025, April 8). Do President Trump's Tariffs Constitute Force Majeure? Retrieved from https://www.dentons.com/en/insights/alerts/2025/april/8/do-president-trumps-tariffs-constitute-force-majeure
GEODIS. (2025). Adjustments to Importing Automobiles and Automobile Parts into the U.S. Retrieved from https://geodis.com/us-en/resources/customs-corner/adjustments-importing-automobiles-and-automobile-parts-us
K&L Gates. (2025, April 28). Impact of Tariffs on Commercial Contractual Performance: Can Tariffs Be a Force Majeure Event? Retrieved from https://www.klgates.com/Impact-of-Tariffs-on-Commercial-Contractual-Performance-Can-Tariffs-Be-a-Force-Majeure-Event-4-28-2025
Linamar Corporation. (2025, April 11). Shareholder Memo: Tariff Update. Retrieved from https://www.linamar.com/wp-content/uploads/2025/04/4_Linamar_Shareholder_Memo_Apr11_2025_v2.pdf
My USA Corporation. (2025, May 5). Navigating Tariffs in 2025: Essential Strategies for Small Businesses During Small Business Week. Retrieved from https://www.myusacorporation.com/our-blog/2025/05/05/navigating-tariffs-in-2025-essential-strategies-for-small-businesses-during-small-business-week
Netstock. (2025, April 18). Tariff Survival Guide for CFOs and Treasurers. Retrieved from https://www.netstock.com/research/2025-tariff-impact-report/