Manufacturers and suppliers are bound by more than simple supply and demand. There are contracts, rules, laws, arbitration clauses and myriad other legal stipulations that smooth the flow of commerce.
So when U.S. President Donald Trump threatens to upend the whole system by imposing tariffs, someone has to untangle all that legalese. That’s where trade lawyers come in, and right now business is booming.
While few would argue Trump has been good for the legal profession writ large — see his revoking of security clearance to pressure firms on his enemies list — trade lawyers have to admit he’s been good for their niche corner of the industry.
At Mexican firm Vega, Guerrero & Asociados, revenue on the deals and disputes team is up 38 percent from a year ago. Clients want to know if their customers in the U.S. can just shut off orders with no recourse.
Dozens have sought reviews of their supplier contracts, and smaller firms with informal deals have been pushing to make them official. Much of the work is so complicated it requires the services of US$540-an-hour partners like Joaquin Vega Martinez.
“The question I’m getting is: If I have a buyer in the United States, how easy is it for the company to cut me off?” he said.
The same phenomenon is happening in Canada and the U.S., marking a surge of billable hours for experts in what used to be an arcane corner of the law.
After imposing tariffs on steel and aluminum, Trump has promised to unleash a new slew of so-called reciprocal tariffs on Wednesday. That’s likely to trigger another round of retaliatory measures from Canada, which has already put in place 25% counter-tariffs against $60 billion (US$41.7 billion) worth of U.S. goods. Mexico could hit back too, having held off till now.
“These are real world, hour-by-hour issues for our clients. They’ll get the news of retaliation, they’ll get the news of an executive order, and then they’ll press the five-alarm fire bell,” said Clifford Sosnow, who practices trade law for Fasken Martineau DuMoulin LLP out of offices in Toronto and Ottawa.
“We don’t see us taking our foot off the gas pedal anytime soon,” he added, saying he’d been retained by two new clients in the past week alone — one in paper products and the other in aerospace.
Last week, Trump slapped a 25% levy on all autos and parts made abroad. Those shipped under the North American trade pact, known as USMCA, would get extra time to comply, but the need for companies to calculate non-U.S. components to determine their dues set off another frenzy.
“Absolutely every company is following this to see the extent of what is included,” said Doreen Edelman, chair of global trade at Lowenstein Sandler LLP in Washington. “For example, to what extent does a free trade agreement override this, to what extent existing tariff exclusions will apply and how content calculations will be made.”
The stream of executive orders and reversals coming from the White House — Trump announced a 25% tariff on Canadian and Mexican goods last month, then exempted those covered by USMCA — have required customs experts. While some companies have their own in-house teams, others have sought outside help in reviewing their products to ensure that enough of them are made in North America.
Jennifer Hillman, a professor at Georgetown University Law Center, said demand for assistance is through the roof: “Everybody I know that has any customs ability at all is scrambling, working 24/7.”
In Mexico, predictions that the country would be a safe bet thanks to secure export access to the U.S. market have all but evaporated. After a rush of firms built out industrial parks near the border, Trump’s volatility has cast doubt on the economy’s ability to grow at all this year.
Contracts stipulate who will be on the hook for extra fees — either the sender, the importer or someone else in the supply chain — and now some clients have asked for clauses to be written into their contracts so they aren’t financially ruined if Trump ratchets up the pressure.
But analysts are now starting to take seriously the idea that the trade war could be longer lasting and more pervasive, rattling markets globally and sending the S&P 500 into its first 10% correction in nearly two years last month before paring some of those losses. Equities investors fear Wednesday’s announcement from Trump will be another blow.
Minnesota-based transportation firm CH Robinson Worldwide Inc., which boasts some 83,000 customers, said it noticed an increase in requests by companies to ensure products had certification under USMCA rules. Mike Short, its president of global forwarding, said in a statement that the White House’s announcements “have incentivized shippers to pursue this qualification more diligently.”
Companies also rushed to use specially designated U.S. warehouses called foreign trade zones that allow importers to defer duty payments or consolidate shipments in order to qualify for lower customs fees, which Short’s company offered to help set up.
For Vega, the surge in business has meant traveling between Mexico’s capital and two other cities to coach companies on what to do, and if necessary prepare their teams for arbitration. He estimates 35 companies have sought his firm’s help recently in anticipation of Trump’s tariff war and once the president started to sign off on new levies.
But it’s not just this past month that he’s been getting requests — it’s “since Trump was re-elected,” he said. And the cases have been so dense, he’s referred them to other top-billing partners or to senior associates that charge US$350 to US$380 an hour, instead of lower fees for mid-level lawyers.
For some, all the changes have required an emergency expansion. Texas-based Tecma Group LLC, which helps businesses with everything from dealing with landlords to organizing permits, has had its staff working late nights and weekends. They hired another dozen part-time customs specialists in recent weeks to try to keep up.
“You could talk to our head of U.S. customs,” Chief Executive Officer Alan Russell said, holding his hand up by his forehead on the video call. “But his workload is here right now.”
With assistance from Michael O’Boyle.
Maya Averbuch, Derek Decloet and Sabrina Willmer, Bloomberg News
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U.S. President Donald Trump’s reciprocal tariffs on trading partners are set to take effect on April 2, a day he has proclaimed as “Liberation Day” for American trade. CTV News will have extensive coverage across all platforms:
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