Tariffs increase and international agreements governed by French law

On February 13 2025, Donald Trump announced the implementation of « reciprocal tariffs » on all imported goods. These measures will inevitably impact international trade relations, leading to potential legal remedies for businesses facing excessive cost increases in fulfilling their contractual obligations. Besides the choice, adaptation or review of the relevant ICC Incoterm as regards its impact on sale prices and tariffs, parties may seek alternative grounds to adapt their contractual undertakings. 

Summary:

• The increase in tariffs is unlikely to be considered a force majeure event under French civil code or under CISG, to be a valid excuse to the non-fulfilment on a contractual obligation.
• However, it may meet the conditions for contract renegotiation based on the French legal mechanism of “Unforeseeability”, provided the contract does not exclude such a legal mechanism.
• Price adjustments by one party may be possible in business relationships for future agreement, but might be subject to a reasonable notice before this adjustment being effective.

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