What’s Really Keeping Business Leaders Up at Night Ahead of August 1 – Artificial Lawyer

By Tanja Podinic + Kate Poppitt, ContractPodAi.

The impending US tariffs are only part of the problem. Business leaders are scrambling to assess contract exposure, uncover buried risk, and renegotiate without hitting reset. AI can help.

When the new tariffs take place, whether on August 1 or a future date, for business leaders the impact will extend beyond higher prices for semiconductors, steel, and solar panels. They will expose a far more fundamental and vulnerable layer within modern enterprises: the contracts that quietly determine how businesses endure disruption, allocate risk, and sustain their operations.

For business leaders around the world, their anxiety often stems from a central question: What is our risk exposure? For tariffs, sweeping new sanctions, or supply chain transparency laws, the answer isn’t found in commodity codes or country lists; it’s hidden within agreements and supplier contracts, many scattered across different teams, uncoordinated databases, legacy platforms, and physical archives. These fragmented documents make risk assessments challenging, too often leaving businesses blind to their vulnerabilities as the trade and regulatory environments around them shift.

This isn’t just a trade issue. It’s a risk crisis. And most organizations are unprepared for what lies ahead.

It’s Not Just About Tariffs – It’s About the Lack of Visibility

For all the headlines about retaliatory duties and supply chain disruptions, what keeps business leaders up at night isn’t just the tariffs themselves, it’s the lack of clarity about their company’s level of risk. And they can’t mitigate what they don’t know. Compounding that is the challenge of responding to global regulatory environments that are now moving faster than their legal and operational frameworks can adapt.

It’s not just about tariffs, but tariffs are a perfect microcosm of the unknown risks buried in vast numbers of agreements and contracts. Companies are especially vulnerable at points where critical goods or components flow through jurisdictions subject to volatile trade policy. Electronics manufacturers often rely on semiconductors from Taiwan, Vietnam, or China. Automakers depend on lithium-ion batteries and rare earth materials, predominately mined or processed in China and South Korea, to power EV batteries and motors. Pharmaceutical firms are similarly exposed, as they lean heavily on overseas supply chains for active ingredients and finished medications that are manufactured offshore. These dependencies create pressure points where a single tariff shift can have cascading effects across production, pricing, and delivery.

This complex web of global interdependence, whilst beneficial at the height of globalisation’s popularity, now is a cause of uncertainty and urges companies to re-evaluate their strategies.

Legal and procurement professionals along with supply chain and finance leaders, have consistently raised four major concerns: visibility into tariff risk, the operational burden of mitigating that risk, the auditability of decisions made under pressure, and whether any solution is scalable across multiple jurisdictions. These challenges directly impact an organization’s ability to anticipate, withstand, and adapt to major regulatory changes and market volatility.

Most large organizations still cannot answer basic contractual questions across all of their contracts, or indeed any given number of contracts. Can they quickly and easily determine who bears the cost if tariffs increase 30% overnight? Or are they contractually allowed to renegotiate prices or terminate supply deals? What about their legal recourse if shipments are delayed or cancelled due to tariff related changes?

The truth is that few companies have an expansive, real-time understanding of what is in their contracts. The inability to answer these questions doesn’t just threaten internal operations; it can impact entire industries, driving up costs, constraining supply, and ultimately impacting consumers. Understanding when and how these provisions apply across a company and at speed is critical for risk mitigation, and with existing AI capabilities it is no longer an impossible exercise.

Turning Data Into Defense: How AI Reshapes Contract Risk

Companies that have deployed AI to understand their contracts often gain a strategic advantage, not because technology replaces judgment, but because it enables teams to be proactive and quickly identify contract vulnerabilities. However, AI is not a silver bullet. The advantages AI brings do not come without challenges: data standardization, system integration, change management, and regulatory uncertainties around privacy and intellectual property can hinder adoption. But ignoring its capabilities in times of crisis is a missed opportunity.

As a result, organizations must weigh these operational challenges against the advantages AI can provide. For many leading companies these advantages can look like mapping their enterprise-wide exposure, exposing general trends and pinpointing specific contracts at risk from multifaceted external factors, extracting risk provisions and flagging critical clauses. There are several critical clauses AI can flag including relevantly escalation clauses, tariff pass-through language, force majeure applicability, geopolitical triggers, or jurisdictional liabilities. AI can also quantify financial impact, highlightwhere the most significant financial exposures across the company’s global supply chains lies allowing for prioritising remedial action, and expedite amendment and contract drafting. These capabilities provide assistance for fast, precise modifications (often without the need to start from scratch) and the creation of resilient new agreements. All, often, within minutes.

With this intelligence-driven approach, legal and procurement teams gain the clarity needed to prioritize renegotiations, safeguard critical agreements, and future-proof their commercial relationships. One notable example: during the last major round of tariffs, a global steel manufacturer used AI-based contract analysis to quickly identify and address exposure across its operations. This enabled the company to take decisive actions – rerouting shipments, renegotiating terms, and mitigating financial risk before costs could escalate.

As the next wave of tariffs approaches, global businesses face a pivotal test. Their ability to interpret the obligations and protections buried in their contracts will define how effectively they navigate disruption. Those utilizing AI to access real-time contract intelligence, and strong coordination across legal, procurement, and operational teams will be better prepared to respond. In a landscape shaped by uncertainty, true resilience and agility begin with clarity and control at the foundation. Solutions like Leah Tariffs are designed specifically for this challenge — helping organizations surface tariff exposure, quantify financial impact, and accelerate renegotiation efforts with precision.

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Authors:

• Kate Poppitt, Dir. AI Programs at ContractPodAi
• Tanja Podinic, Senior Vice President, AI Programs, Product at ContractPodAi

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You can find more information about ContractPodAi and its Leah Tariffs capabilities here.

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[ This is a sponsored thought leadership article for Artificial Lawyer by ContractPodAi. ]