Imagine negotiating an export contract assuming the entry price into the United States is settled under a free trade agreement, only to find a few months later that the calculation no longer holds. This isn’t a hypothetical scenario — it’s exactly what Colombian foreign trade has experienced over the past year. And while the topic sounds like something out of the business news, at its core it’s a contract law problem with a very specific name: who bears the cost when the rules of the game change midway through the deal?
What has happened, in short
Since early 2026, the United States has adjusted, on several occasions, the tariffs applied to imports from various countries, including Colombia. There was an interesting legal back-and-forth: in February, the U.S. Supreme Court determined that one of the legal bases used to impose those tariffs exceeded presidential authority, which brought brief relief. The response, however, didn’t take long: the U.S. government turned to a different legal basis — this time on firmer footing — and in July 2026 set a 12.5% tariff on Colombian exports, replacing the 10% that had been in effect.
That adjustment, though it may sound like a simple percentage point, directly affects sectors that account for a significant share of what Colombia sells to the United States: cut flowers, palm oil, electrical transformers, and other industrial products. For many companies, that additional 2.5% translates into thinner margins, the need to renegotiate prices with buyers, or the uncomfortable question of who absorbs the difference.
Why a Free Trade Agreement Isn’t a Full Shield
One of the most common misunderstandings is assuming that, if a free trade agreement is in force, tariffs are fully blocked out. The reality is more nuanced: these recent measures weren’t applied by amending the FTA, but through other legal tools within U.S. foreign trade law that operate in parallel. This means a product can still enjoy tariff preference under the FTA for certain purposes and, at the same time, remain subject to an additional surcharge under a different piece of legislation.
The practical lesson is that each product’s tariff classification — the exact code under which it is declared at customs — matters more than ever. Two products that look similar at first glance can receive completely different treatment depending on that code, and that’s exactly where a technical review pays off before assuming you already “know” how the merchandise will be treated at entry.
What You Can Actually Control: Your Contracts
This is where commercial law stops being theory and becomes a genuine risk-management tool. Here are some questions every exporting company should be asking about its current and future contracts:
- Who absorbs a tariff change that arises after signing? Many export contracts are silent on this point, which in practice tends to leave the risk with whoever failed to anticipate it. A price-adjustment clause or a clause allocating tariff-related overcosts can prevent an uncomfortable discussion midway through a business relationship.
- Does the contract include a force majeure or hardship clause that covers this type of event? Not all standard clauses contemplate regulatory changes in a third country as a triggering cause. It’s worth checking whether the current wording actually protects against this scenario, or merely sounds like it does.
- How is periodic price revision structured? In medium- or long-term supply contracts, a revision clause tied to objective variables (costs, tariffs, exchange rate) is far easier to apply than having to renegotiate the entire contract every time external conditions shift.
- What does the agreed Incoterm say about who handles and pays for import procedures? The chosen Incoterm is not a minor detail: it largely determines who ends up bearing these additional costs in practice.
The Other Side Effect: Imported Inflation
It’s worth noting that this type of measure doesn’t only affect exporters. Companies that depend on imported inputs or machinery also feel the impact, because higher external costs tend to be passed along, at least in part, to the end consumer. If your company both exports and imports inputs for production, the contract review is worth doing in both directions.
The Practical Takeaway
No exporting company can control the trade policy of its international partners. What it can control is making sure its contracts, tariff classifications, and pricing structures are prepared to absorb these changes without surprises. A preventive contract review — before the next adjustment lands — is almost always far cheaper than renegotiating under pressure with a buyer who has already received an invoice with the extra cost baked in.
This article is for informational purposes only and does not constitute individual legal advice. If your company exports to the United States and would like to review its current contracts in light of this scenario, we recommend a specific consultation with your legal advisor.
Sebastián Legarda
Abogado — Derecho Comercial y Empresarial
