Turbulent Tariffs – How stormy conditions will lead to a bumpy ride for company and consumer alike

Tariffs and the current picture

A tariff is a tax that governments impose on imported goods to protect domestic industries and raise revenue. Despite Trump agreeing with Xi over reducing tariffs on Chinese imports from 57% to 47%, China still faces higher tariffs than it did when Trump came into office, and the ramifications of such long-term tariffs will continue to be felt[1]. This is an ongoing economic conflict that Trump has advocated for while in office, over his concern about longstanding unfair trade practices and intellectual property theft.

Starting to build legal links

There will be a critical Supreme Court case over whether the president can impose sweeping tax increases on imported goods[2]. Trumps emergency tariffs are under an emergency law known as IEEPA– the International Emergency Economic Powers Act of 1977[3].  In May 2025, several small US businesses sued the federal government over tariffs (Learning resources Inc v Trump[4]), arguing that they exceeded the president’s authority. As a result, the tariffs were ruled as unconstitutional, and the Trump administration will be appealing the latest affirmative decision that was upheld by the US Court of Appeals on the 29^th of August 2025.

What happens next?

Until the Supreme Court makes its decision, businesses are uncertain over how to plan while they currently pay tariffs. Although as history has shown us, the persistence of the Trump administration means that even if the Supreme Court decision swings in the way of businesses, the Trump administration may explore other avenues to impose higher tariffs[5].

Case study on Adidas and subsequent consumer effects

Adidas expects U.S import tariffs to have a direct impact of 120 million euros on its operating profit in 2025[6]. For context, operating profit, is the profit a company makes from its core business operations before deducting interest and taxes. CEO Bjorn Gulden notes the direct impact on the consumer, through higher prices in the U.S to try and counterbalance the tariff impact[7]. Moreover, Adidas’ struggles as highlighted in this graph below is simply just the tip of the iceberg in terms of companies affected.

Graph depicting Adidas stock price in 2025 linked to key tariff-related events*, (For reference Q3 refers to the third quarter of the year)

Consequential mounting legal pressures

Quite a few global law firms, such as Holland & Knight, have specific teams to help clients mitigate potential large changes in import duty rates because of tariffs[8]. This becomes especially relevant when Companies like Adidas must consider whether high import duties on Countries in Asia like Indonesia, make sticking with the same product suppliers the most financially viable option[9]. Moreover, changing suppliers, means Environmental Social Governance (ESG) policies and due diligence practices, need to be advised upon with the aid of law firms.

Potential change of contracts, through moving supply sides away from the US, means a thorough examination of clauses is necessary, as well as potential costs and legal claims revolving around any contract terminations[10].

Final thoughts

The ongoing tariff disputes present a complex uncertain environment for both companies, and consumers, who rely on such brands throughout their daily life. The pending Supreme Court decision on the president’s authority to impose sweeping tariffs further intensifies this uncertainty, complicating strategic planning for businesses currently bearing these costs.

Despite legal challenges, it remains clear that the administration may seek alternative avenues to maintain tariff pressures. Consequently, companies must remain vigilant, adapting their risk management and legal strategies to navigate this evolving landscape effectively, ensuring resilience in the face of continued trade tensions.