Force Majeure in the Tariff Era: Does Your Clause Actually Cover a 50% Section 232 Tariff Hike?

The scale of what's changed is worth stating plainly. Section 232 tariffs on steel and aluminum doubled from 25% to 50% in June 2025, and copper products were hit with a new 50% tariff in August 2025 — both major, government-imposed cost shocks with no advance negotiation window for anyone holding a fixed-price contract at the time. AGC's January 2026 outlook survey found 70% of firms report being directly affected, and the ripple effects showed up in broader pricing data almost immediately: construction input prices rising at a 12.6% annualized rate by early 2026, the fastest pace since 2022.

For a contract signed in early 2025, before any of this happened, the question of whether these tariff-driven cost and delay impacts are covered by the contract's existing force majeure language is not hypothetical — it's a real, live issue on active jobs right now.

This is exactly the same underlying tariff shock covered from a pricing angle in our piece on material price escalation clauses — the two clauses (force majeure and escalation) address the same risk from two different angles, and a well-reviewed contract should have both, not just one.

Most standard force majeure clauses were drafted around a familiar list: acts of God, war, terrorist acts, civil unrest, labor disputes, and unavoidable casualty loss. Government action shows up too, but often in narrower language — "government restrictions" or "regulatory action" — that predates the specific, dramatic tariff escalations of 2025. Whether a 50% Section 232 tariff hike counts as a covered "governmental restriction" under an older clause is genuinely unclear without careful reading, and reasonable people (and reasonable lawyers) can disagree about how a specific clause's exact wording applies.

This ambiguity matters because force majeure clauses typically only excuse performance — delay or cost — for events the clause actually covers. If a tariff increase doesn't clearly fall within the clause's language, the party bearing the cost impact may have no contractual relief at all, regardless of how dramatic or unforeseeable the tariff change actually was.

This is precisely the kind of ambiguity that tends to surface for the first time in an actual dispute — both sides reading the same sentence and reaching opposite, equally defensible conclusions, with no way to resolve it short of negotiation or litigation.

The fix isn't complicated, but it requires the clause to be specific rather than relying on a decades-old boilerplate list. Language explicitly referencing "newly announced or enacted governmental restrictions and/or regulations" — not just "government action" generally — closes the ambiguity gap directly, since a new tariff is unambiguously a newly enacted governmental restriction under that framing. For a full look at how this specific clause should be worded, see our detailed piece on force majeure after disruption, which covers the broader standard language this update builds on.

The goal isn't to shift all tariff risk onto the other party by default — it's to make sure the contract actually answers the question one way or the other, rather than leaving it as an open dispute waiting to happen the next time a tariff hits mid-project.

A well-drafted version of this update also typically pairs the excuse-from-delay language with a defined process for requesting a cost or schedule adjustment — since even a clear force majeure trigger doesn't automatically tell either party exactly how much relief is due, or how to document the claim.

A force majeure clause that clearly excludes tariff impacts is at least a known, negotiable risk you can price into your bid or push back on before signing. A clause that's simply silent or ambiguous on the question is worse in a specific way: it invites a dispute exactly when both parties are under the most cost pressure and least willing to compromise, with no clear contractual answer to point to.

Given that 70% of firms are already experiencing tariff impacts directly, this isn't a theoretical edge case worth deferring — it's an active, present risk on contracts being signed and executed right now.

Firms that have gone through a tariff-driven cost dispute once tend to update their standard force majeure language immediately afterward — this piece is really an attempt to get ahead of that lesson before it has to be learned the expensive way.

Read the force majeure clause specifically for how it handles government action — does it reference newly enacted restrictions and regulations explicitly, or does it rely on older, more general language that predates the 2025 tariff shocks? If it's the latter, that's worth raising before signing, not after a tariff hits mid-project and the dispute is already underway.

This is exactly the kind of clause-specific, currently-relevant check a contract review should apply automatically. See how RCS reviews force majeure language for tariff-era coverage gaps before you're locked into a contract that doesn't address 2026's actual risk environment.

Given how quickly this specific risk area has evolved, it's also worth revisiting any standard force majeure template your firm uses at least annually — a clause written even two years ago may already be dated relative to the current tariff environment.

Tariff policy itself remains genuinely unsettled, which is exactly why a well-drafted clause needs to reference the category of event (newly enacted governmental trade restrictions) rather than any specific tariff rate — the language should stay durable even as the underlying policy keeps shifting.