Tariffs, Technology, and Trade Risk: What U.S. SMEs Should Be Paying Attention To Right Now
Over the past several months, U.S. trade policy has continued its shift away from predictability and toward selective intervention, particularly in technology-driven sectors. New and proposed tariffs on advanced semiconductors, AI-related components, and other sensitive inputs may appear, at first glance, to affect only large multinational corporations. In practice, many of the businesses absorbing the impact are small and mid-sized enterprises earning more than $1 million annually—companies that operate internationally, rely on global suppliers, and do not have the luxury of dedicated internal trade teams.
From a compliance perspective, the most challenging aspect of these measures is not necessarily the tariff rate itself, but the uncertainty surrounding scope and application. Tariffs are increasingly tied to downstream use, destination markets, and evolving national security criteria. For SMEs that import components into the United States for assembly, integration, or re-export, this creates real ambiguity around duty exposure, classification, and valuation—often after contracts have already been signed and pricing has been locked in.
I frequently see situations where a company’s commercial agreements assume tariff stability that no longer exists. Import and supply contracts drafted even two or three years ago often lack mechanisms to address sudden duty increases, reclassification risks, or government action beyond the parties’ control. When tariffs shift mid-term, the question becomes less about compliance in theory and more about who bears the cost in practice. Without clear contractual allocation, SMEs can find themselves absorbing unexpected six-figure duty liabilities with limited recourse.
Another overlooked issue is how tariffs intersect with export controls and sanctions compliance. Technology-related tariffs rarely operate in isolation. A component subject to increased duties may also trigger licensing considerations, destination-based restrictions, or heightened scrutiny from Customs and Border Protection. For companies trading with Asia, the Middle East, or Europe, this layered regulatory environment increases the risk of delays, penalties, and post-entry audits—particularly where documentation has not been updated to reflect current rules.
SMEs are often surprised to learn that tariff exposure is not confined to imports into the United States. Pricing models, transfer pricing arrangements, and distributor agreements abroad can all be indirectly affected when upstream costs change. In some cases, tariffs imposed in the U.S. can trigger renegotiations or disputes overseas, especially where contracts were drafted without tariff-adjustment clauses or hardship provisions. These are legal and commercial risks, not merely accounting issues.
As an international trade compliance attorney, my role is not to advise companies to disengage from global markets, but to help them operate with clearer eyes and better tools. This typically involves a focused review of tariff classifications, country-of-origin determinations, and supply chain assumptions, alongside a legal review of contracts that govern pricing, delivery terms, and regulatory change. In many cases, modest adjustments on paper can prevent significant financial exposure later.
What concerns me most is not that SMEs are unaware of tariff developments, but that many assume they are “managing around” the risk without formally assessing it. Informal workarounds—changing suppliers, rerouting shipments, or absorbing costs temporarily—can create compliance vulnerabilities if they are not documented and legally sound. Customs authorities are paying closer attention to consistency, intent, and audit trails, particularly in sectors linked to technology and national security.
For internationally operating SMEs, now is an appropriate moment to pause and assess whether existing trade documents still reflect today’s reality. That includes import agreements, distribution contracts, Incoterms usage, and internal compliance procedures. A short, targeted review can often identify risks before they materialize into enforcement actions or commercial disputes.
If you would like to have your tariff exposure, trade contracts, or import arrangements reviewed from a compliance and risk-allocation perspective, you may schedule a consultation using the link below. The objective is not to sell complexity, but to provide clarity in a trade environment that is becoming increasingly difficult to navigate without it.