Buying a company is complicated enough. Now, buyers and sellers have to factor in something new: the possibility that a tariff could change the value of a deal before it even closes.
That pressure is real and growing. Trade policy under the Trump administration has been shifting fast, and businesses that depend on cross-border supply chains, like many technology companies, are feeling it most. The result is a wave of changes to how mergers and acquisitions are being structured, priced, and negotiated across nearly every industry.
Law firm Masuda Funai, which advises clients on cross-border deals and international trade, has been tracking these changes closely. In a new analysis, the firm lays out how tariff uncertainty is forcing both sides of a transaction to think differently from the very first meeting.
On the buyer side, the firm says the scrutiny starts early. Buyers are now examining how existing or potential tariffs could squeeze profit margins and affect long-term financial projections, especially for companies that depend on imported goods or international suppliers. Lenders are asking the same questions. According to Masuda Funai, financing sources are now factoring tariff exposure into their underwriting, looking specifically at things like inventory costs and whether a company can meet its debt obligations if costs rise.
The due diligence process has gotten longer and more detailed. Buyers want to know where a target company’s products come from, how they are classified under customs rules, and whether the company could switch suppliers if new tariffs hit. Contracts are being reviewed line by line to figure out who absorbs the cost if duties change.
Related: States Prepare New Legal Challenge to Trump’s Global Tariffs
“As tariff policy continues to shift under the Trump administration, M&A transactions face heightened uncertainty around supply chain exposure, customs compliance, and cost allocation,” Masuda Funai wrote. For technology companies that rely on off-shore chip and component suppliers the uncertainty is acute.
That uncertainty is pushing both sides to get creative with deal structures. Earnouts, deferred payments, and working capital adjustments are all being used to bridge the gap when neither buyer nor seller can agree on what a company is actually worth given the tariff environment. Buyers are also building contingency plans into deals, asking whether factories can be moved, suppliers can be swapped out, or price increases can be passed along to customers after the deal closes.
On the legal side, Masuda Funai flags several contract provisions that are getting extra attention. Material Adverse Effect clauses, which let buyers walk away if something major changes before a deal closes, are now being negotiated with tariffs specifically in mind. Sellers want tariff changes excluded from those clauses. Buyers want more flexibility to exit if duties surge. Interim operating covenants, which govern how a company can operate between signing and closing, are also being rewritten to give sellers more room to respond to supply chain disruptions.
Masuda Funai advises companies to get ahead of these issues rather than waiting until late in the negotiation. That means evaluating tariff exposure at the start of a deal process, deciding early how those risks should be allocated, and building integration plans that account for possible sourcing or manufacturing changes.
The firm says it will continue monitoring developments as trade policy evolves. Given that several tariff measures are still being contested in federal court, further guidance seems likely.
