Under an existing contract, an increase in US tariffs falls first on the party the contract makes liable for import duties, and the Incoterm almost always says who that is: the buyer under EXW, FCA, FOB or CIF, the seller under DDP. Force majeure is of virtually no help, because a tariff makes performance more expensive without making it impossible. Hardship under Article 1195 of the French Civil Code may apply to a French-law contract concluded before 2025, provided it has not been excluded. For contracts signed since, the argument is weak. The real issue in 2026 lies elsewhere: renegotiation, and what happens to the duties being refunded since the Supreme Court struck down the IEEPA tariffs.
A small firm in the Arve valley makes precision-turned parts for an automotive supplier in Michigan. The framework agreement, signed in October 2024 for three years, sets prices in euros, reviewable once a year against a raw materials index, and provides for delivery DDP Detroit: the Savoy manufacturer is the importer of record in the United States and pays the duties. In spring 2025 the duties on its parts were multiplied. It paid, invoiced a “tariff surcharge” that its customer settled under protest, then learned in February 2026 that those duties were unlawful and would be refunded. Its customer now writes to demand repayment of the surcharge, and refuses the price increase proposed for 2027. The managing director wants to know who is right, and what he should sign going forward.
The answer depends on the contract far more than on US trade policy, whose current state must nevertheless be known. This page recalls where tariffs stand at 25 September 2026, then examines in turn the Incoterm and the price clause, hardship under French law, force majeure, contracts governed by the Vienna Convention or a foreign law, the question of refunds, and the tariff clause to negotiate for future contracts.
1. Where US tariffs stand at the end of September 2026
The sequence has been brutal and it is not over. The additional duties imposed from April 2025 under the International Emergency Economic Powers Act (IEEPA) were struck down by the US Supreme Court on 20 February 2026 in Learning Resources, Inc. v. Trump. The administration immediately introduced, under section 122 of the Trade Act of 1974, a general 10% surcharge applicable from 24 February to 24 July 2026, itself held unlawful by the Court of International Trade on 7 May 2026, with effects limited to the plaintiff importers and a decision under appeal. Since 24 July 2026, an additional duty under section 301 of the same Act, adopted following an investigation into imports made with forced labour covering sixty economies, has taken over.
For EU products, French customs explain that this duty takes the form of a 10% floor that includes the most-favoured-nation duty: if the usual duty is below 10%, the section 301 duty tops it up to 10%; if it is equal to or above, nothing is added. The sectoral duties under section 232 of the Trade Expansion Act of 1962 (steel, aluminium, copper, cars, timber, certain pharmaceuticals) remain in place at their own rates, which the political agreement concluded between the EU and the United States in July 2025 caps at 15% for certain sectors, but not for steel and aluminium. These figures change from month to month, and the fact sheets of the French Treasury and French customs remain the source to check before any decision.
One thing to keep in mind: in eighteen months the same product may have changed tariff regime four times, and each of those changes raises, under each contract, the same question of allocation.
2. The Incoterm and the price clause answer before any judge does
The first reading is the Incoterm, because it allocates costs between seller and buyer, import duties included (Incoterms 2020, articles A9 and B9). Under EXW, FCA, FOB, CFR, CIF, CPT, CIP, DAP and DPU, import duties fall on the buyer: the US increase is its problem, and the French seller only feels the consequences indirectly, through lower orders. Under DDP, and DDP only, the seller is liable for import duties and must clear the goods at destination, which means it must be the importer of record in the United States. A DDP seller has sold at a delivered, duty-paid price, and has therefore taken on the tariff risk. That is the Savoy manufacturer’s position.
The second reading is the price clause. A “firm and final” price is not revised; a price reviewable against a raw materials index is revised only by reference to that index, and the index does not measure tariffs. A clause providing that “any new or increased tax, duty or levy after the date of the contract shall be borne by the buyer” does, however, reverse the Incoterm allocation, because the parties may depart from the Incoterms rules and the specific clause prevails. The whole set must therefore be read: the seller’s general terms of sale, the customer’s terms of purchase, the framework agreement, the purchase orders, and one must determine which prevails. An unresolved battle of the forms, which often happens, is settled by the law applicable to the contract, and the outcome can be surprising.
In the Savoy case, no clause places new duties on the customer. The tariff surcharge invoiced in 2025 therefore had no contractual basis. The customer paid it under protest, and it is far from certain that it thereby accepted a price change. The customer’s argument is serious.
On how costs and risks are allocated under the chosen Incoterm, see our article on the transfer of risk under Incoterms 2020.
3. Hardship under Article 1195: useful for older contracts, weak for others
Where the contract is governed by French law and was concluded on or after 1 October 2016, Article 1195 of the Civil Code allows a party for whom performance has become excessively onerous, as a result of a change of circumstances unforeseeable when the contract was concluded and whose risk it had not agreed to bear, to ask the other party to renegotiate. It continues to perform during renegotiation. If renegotiation is refused or fails, the parties may agree to terminate the contract or jointly ask the court to adapt it; failing agreement within a reasonable time, the court may, at the request of one party, revise the contract or terminate it.
Three conditions stop most claims. The first is unforeseeability. For a contract signed in October 2024, when the candidate elected the following month was campaigning on across-the-board tariffs, unforeseeability is debatable, and a court may consider that an experienced operator should have envisaged it; we think it remains arguable as to the scale and suddenness of the April 2025 measures, well beyond what the announcements suggested. For a contract signed after April 2025, the answer is unfavourable to anyone relying on it: US tariff volatility was by then common knowledge. The second is that the risk was not accepted, and the DDP Incoterm is precisely an acceptance: a seller who sold delivered duty paid accepted the risk of duties. The third lies in the contract itself, since Article 1195 is not mandatory and many framework agreements expressly exclude it, often in favour of a contractual hardship clause that must then be applied to the letter.
The Savoy manufacturer sells DDP. Article 1195 will be of no help for 2025 and 2026. It can, however, for the third year of the contract, use the lasting increase as a lever for renegotiation, which its customer will have every reason to hear if it wants to keep a qualified parts supplier whose replacement would take months of requalification. The law does not decide that negotiation. It only sets its starting point.
4. Force majeure: almost never
Article 1218 of the Civil Code defines force majeure as an event beyond the debtor’s control, which could not reasonably have been foreseen when the contract was concluded and whose effects cannot be avoided by appropriate measures, and which prevents performance of its obligation. A tariff prevents nothing. It makes performance more expensive. The Cour de cassation has long held that a debtor of a contractual obligation to pay money cannot escape it by pleading force majeure (Cass. com., 16 September 2014, no. 13-20.306, reported): a US buyer paying higher duties cannot rely on it to suspend its payments.
One qualification, and only one. Where a tariff measure comes with an import ban, a proof-of-origin requirement that cannot be met, or detention of goods at the border on forced labour grounds, performance may become physically impossible, and force majeure becomes a serious question again. It is then the contractual force majeure clause, not Article 1218 alone, that must be read, particularly if it follows the ICC model clause published in 2020, which expressly covers acts of public authorities.
5. Contracts governed by the Vienna Convention or by US law
An international sale of goods between a French seller and a US buyer is in principle governed by the Vienna Convention of 11 April 1980 (CISG), to which both States are parties, unless expressly excluded. The CISG does not recognise hardship as such. Its Article 79 exempts a party that proves that its failure was due to an impediment beyond its control that it could not reasonably be expected to have taken into account at the time of the conclusion of the contract or to have avoided or overcome. Mainstream commentary and most decisions refuse to treat a mere cost increase as such an impediment. One decision stands out: the Belgian Court of Cassation accepted that an unforeseeable change of circumstances making performance excessively onerous could be an impediment under Article 79, and filled the Convention’s silence with the UNIDROIT Principles to open a right to renegotiation (Belgian Court of Cassation, 19 June 2009, Scafom International BV v. Lorraine Tubes SAS, C.07.0289.N). The solution remains isolated, and we would not advise building a strategy on it.
If the contract is governed by the law of a US state, the Uniform Commercial Code recognises the excuse of commercial impracticability (§ 2-615), but the official comments state that increased cost alone does not suffice unless it results from an unforeseen contingency that alters the essential nature of the performance. US courts apply it sparingly. The result is, in substance, the same as under French law: absent a clause, the DDP seller bears the duties, and so does the EXW or FOB buyer.
6. Refunded IEEPA duties: who is entitled to them?
The invalidation of the IEEPA duties has raised a question few contracts anticipated. Refunds are paid by US Customs to the importer of record that paid the duties, through a centralised procedure called CAPE, opened in phases since spring 2026. On 3 June 2026 the federal government appealed the Court of International Trade’s decision ordering refunds to all importers, and finally liquidated entries remain contested for those who did not sue. The timetable and scope of refunds are therefore not settled.
Between the parties, the question is simple to ask and hard to answer. Where the DDP seller bore the duties alone without passing them on, the refund is undoubtedly its own. Where it passed them on through a surcharge, the buyer will claim back what it paid on account of a duty that the State itself is refunding. If the surcharge was stipulated as reimbursement of duties actually paid, the disappearance of those duties removes its basis, and repayment follows, whether under the rules on undue payment (Civil Code, arts. 1302 and 1302-1) or under the clause itself. If it had no contractual basis and was paid under protest, as in the Savoy case, the seller’s position is weaker still. If it was negotiated as a flat price increase unrelated to the amount of duties, the seller can argue that it keeps it. There is as yet no French decision on the point, and we are reasoning prospectively. One thing is certain: the importer of record that receives the refund will have to account for it to its counterparty, and it is better to open that discussion than to have it forced upon you.
7. The tariff clause to negotiate for future contracts
The lesson of these eighteen months fits in one sentence: an export contract to the United States that says nothing about tariffs lets the Incoterm decide, and the Incoterm was chosen for logistical reasons, not to allocate a political risk. The clause to negotiate must settle five questions, and a clause that forgets a single one lets the Incoterm back in through the window: it expressly designates, departing from the Incoterm if necessary, the party that bears new or increased duties after a reference date; it sets a threshold below which nothing changes, to avoid renegotiating at every marginal change in a tariff that now changes several times a year; above that threshold, it provides either for an allocation agreed in advance (half each, or a scale under which the buyer’s share rises with the rate) or for mandatory renegotiation within a short period, thirty or sixty days, after which a default solution applies; if renegotiation fails, it gives each party a right to terminate without compensation, with notice compatible with supplies in progress and any safety stock the buyer may have required; and finally it settles the fate of refunds, allocating the benefit of any later repayment to the party that economically bore the duties, whoever receives it. A few lines suffice. They still have to be written.
Two further points are worth considering. The first is customs: the origin of the goods, their tariff classification and their customs value determine the duty payable, and serious work on those three elements, carried out with a US customs broker, sometimes reduces the burden more than any renegotiation. The second is dispute resolution: an arbitration clause seated in Paris or Geneva avoids litigating the allocation of duties before the courts of the buyer’s State. Multi-year framework agreements also deserve an annual price review clause, which turns a crisis into a scheduled negotiation.
For the Savoy manufacturer, the course of action is therefore as follows: acknowledge that the 2025 surcharge was ill-founded and offer to repay it as refunds are actually received, which defuses the dispute at no cost; rely, for 2027, on the lasting increase in section 301 and section 232 duties as grounds for renegotiation; and propose an amendment with a tariff clause, in exchange for a longer term that gives the customer security. The firm assists exporters in analysing and renegotiating their contracts in the face of tariff measures, under French law and in contracts governed by the CISG. Its page on international contracts describes this work, and the contact form allows a contract to be outlined in a few lines.
Further reading: EU Deforestation Regulation (EUDR): what changes for importers.
Frequently asked questions
Who pays US import duties under a DDP sale?
The seller. Under the Incoterms 2020 rules, a DDP seller bears import duties and taxes and clears the goods at destination. An increase in duties after signature remains its responsibility, unless a contractual clause places new or increased duties on the buyer. Under every other Incoterm, import duties fall on the buyer.
Is a tariff increase a case of force majeure?
Almost never. Force majeure under Article 1218 of the French Civil Code requires an event that prevents performance; a tariff only makes it more expensive. The Cour de cassation also holds that a debtor of a sum of money cannot plead force majeure to avoid paying. The question only arises seriously if the measure comes with an import ban or detention of goods at the border.
Can hardship be invoked to renegotiate an export contract to the United States?
For a French-law contract concluded since 1 October 2016, Article 1195 of the Civil Code allows renegotiation to be requested if the increase was unforeseeable at conclusion, makes performance excessively onerous and its risk had not been accepted by the party invoking it. The argument is arguable for a contract concluded before the April 2025 measures, weak for one concluded after, and excluded where the contract rules out Article 1195 or the seller sold DDP.
Who is entitled to IEEPA duties refunded after the Supreme Court decision?
US Customs refunds the importer of record that paid the duties. Between the contracting parties, the refund should go to the party that economically bore the duties: if the seller passed them on to the buyer through a surcharge calculated on their amount, the buyer may claim repayment. No French court has yet ruled on the point, and the US refund procedure is subject to an appeal by the federal government.
What US duties apply to European products since July 2026?
Since 24 July 2026, an additional duty under section 301 of the Trade Act of 1974 brings the total duty to at least 10% for most European products, including the usual duty. Sectoral duties under section 232 (steel, aluminium, copper, cars, timber, certain pharmaceuticals) apply at their own rates. These measures change quickly: the fact sheets of the French Treasury and French customs should be checked before any decision.
On the same subject: force majeure and hardship clauses in international contracts; the Vienna Convention: when it applies and how to exclude it; Incoterms 2020: who bears the risk and when; origin of goods and customs duties, costly mistakes; the ACE 2026 congress on hardship in international law.