Tariffs became the defining trade story of 2025

Tariffs consumed the regulatory headlines and forced constant adaptation throughout the year. Measures were announced, amended, rolled back or narrowed; some applied to specific products but not others. Policymakers invoked different authorities — reciprocal actions, IEEPA, Section 232 and Section 301 — creating a patchwork of rules that trade teams had to decipher on the fly.

Practitioners were pushed to learn new terminology and practices, from metallurgical terms to how Free Trade Agreements operate. Within six months of the reciprocal tariffs being unveiled, compliance and logistics teams were racing to map supply chains and compute landed costs, reconsider Free Trade Zones, and revalidate product classifications. The pace has been relentless.

How tariffs affected day-to-day operations

The tariff changes drove up supply chain costs and disrupted inventory and lead-time planning. Companies have faced difficult choices about shifting sources, diversifying suppliers, re-routing flows, or expanding compliance teams and budgets to handle unfamiliar import rules tied to broadened supplier bases.

Import compliance pressures on valuation, origin and classification

Tariffs hit the three core pillars of import compliance: valuation, country of origin, and classification. Errors in any of these areas can lead to paying too much or too little duty — both outcomes carry financial and regulatory consequences — so accuracy became essential under volatile tariff conditions.

Legal uncertainty and the refund challenge

With the Supreme Court scheduled to hear challenges to the tariffs in early November, companies face uncertainty about whether levies will stand. Importantly, if the tariffs are invalidated, duty refunds will not be issued automatically. Importers should engage customs brokers now to determine the process for filing refund claims and which entries may qualify.

Even if a specific tariff regime is overturned, authorities can pursue other tariff tools. The government has already expanded Section 232 measures for autos and auto parts, softwood lumber, and kitchen cabinets and vanities — signaling that tariff policy will be a sustained feature of trade enforcement.

BIS issues the 50% Affiliates Rule on September 29

On September 29, the U.S. Department of Commerce’s Bureau of Industry and Security published the so-called 50% Rule, commonly referred to as the Affiliates Rule, which took immediate effect. The rule extends U.S. export controls to entities that are 50% or more owned, directly or indirectly, by one or more parties listed on the government’s Entity List, Military End User List, or OFAC’s Specially Designated Nationals and Blocked Persons List, treating them as "unlisted entities" subject to the same restrictions.

Due diligence and screening grew more complex

BIS has warned that the online Consolidated Screening List that many smaller firms relied on is no longer sufficient for compliant due diligence. The agency expects companies to implement risk-based compliance programs and to go beyond simple checklist screening.

Investigations into ownership structures can be difficult when documentation is opaque. Research requires knowing where to look and what signs of control to seek. Even if suppliers or customers sign certificates disclosing ownership, firms must still be alert for broader "indicia of control" the government expects them to detect. That uncertainty led many importers to pause or re-vet trading partners mid-year.

Licensing bottlenecks and revoked authorizations compounded delays

BIS experienced a buildup of license and classification requests in 2025 as demand surged. At the same time, staffing and institutional knowledge thinned, reducing the agency’s capacity to process applications quickly. Firms producing sensitive items with global licensing needs have at times halted shipments or sought alternative arrangements to secure approvals.

In late August, BIS revoked certain Validated End User authorizations that previously allowed a limited number of companies to ship specified semiconductor manufacturing equipment to China without individual licenses, adding to the volume of required license applications. Companies should identify any export licenses that will expire in the next six to twelve months and file renewals as early as possible.

Start preparing now: investing in people

Amid the turbulence, a trend called the Great Lock In — where individuals commit to fall goals instead of waiting for New Year resolutions — offers a metaphor for firms: begin preparing now for 2026. Assess whether trade teams have the technical skills, product knowledge and authority to act quickly, for example to spot misclassifications, stop shipments or respond to holds.

Key questions include whether staff are empowered to raise concerns, how much budget exists for compliance training, and whether investing in personnel now can prevent future violations tied to unfamiliar rules or internal process gaps.

Build processes that meet a risk-based standard

BIS expects enterprises to maintain a risk-based compliance regime made up of policies, procedures and operational controls to address risks introduced by the Affiliates Rule and related measures. At a minimum, programs should include:

• Prioritized review of higher-risk regions and transactions
• Ownership and control mapping to aggregate ownership by restricted parties
• Identification and escalation of red flags and other indicia of control
• Clear steps to pause or resume shipments as situations require
• Ongoing training on core processes
• Comprehensive recordkeeping

These process elements cannot be deferred until a lull in activity — the pace of regulatory change in 2025 suggests that enforcement and rulemaking will continue.

Upgrade technology to reduce manual risk

Many organizations still rely on spreadsheets, email and manual checks to manage trade compliance. To stay ahead, companies should automate where possible and deploy global trade management systems that centralize classification data, license records and screening functions.

Maintain and test systems regularly: restricted parties are added frequently, Section 232 derivative product lists expand, and tariff rates shift as negotiations progress. Systems require active maintenance, not a "set and forget" approach.

Turning compliance into a competitive advantage

The challenges of 2025 have been significant, but trade professionals have adapted. By prioritizing continuous education, investing in targeted technology, and adopting strategic, risk-based controls, companies can reduce costly disruptions and position compliance as a business differentiator.

With vigilance and purposeful planning, organizations can keep supply chains moving while navigating evolving tariffs and export controls into 2026 and beyond.