Tariffs and Trade Policy Changes Risk Factor

Summary

This tariffs and trade wars risk factor clause is for use in a registration statement for a securities offering or in periodic reports filed by reporting companies. It warns of risks related to the effect of trade policy on operations. This template includes practical guidance and drafting notes. Although these risks may be described in combined risk factors that also include political instability, war, terrorism, and other risks, issuers with businesses that are particularly vulnerable to tariffs and adverse trade policy may find it advisable to draft separate tariffs and trade policy risk factors for a more complete disclosure. In these risk factors, the issuer should discuss tariffs and other trade policies affecting their business (or potential new or expanded ones that may become relevant) and the potential negative effects they may present. Examples of businesses that are particularly vulnerable to tariffs and trade policy changes include import-export companies; manufacturers with operations or customers in affected regions; and businesses that otherwise depend significantly on raw materials, intermediate or finished goods, or access to markets in affected regions. You should choose among and modify these risk factors to fit the business and circumstances of the issuer and the particular tariffs and trade policies affecting it or which may affect it. For information on drafting risk factors, see Risk Factor Drafting for a Registration Statement and Top 10 Practice Tips: Risk Factors. For more on IPOs generally, see Initial Public Offerings Resource Kit.