On August 22, 2026, a 50% duty on Canadian dairy, alcohol, and vehicles took effect under Section 338, with no USMCA carve-out. Somewhere in your company, a supplier contract decides who pays it. Finding that contract used to mean keyword searches across a shared drive and a call to outside counsel. In-house teams now use AI trade compliance to locate the agreements carrying the exposure, watch the sources the duties come from, and answer the CFO the same day the question arrives.
Customs teams own the classification codes and the filings. Legal owns the contract layer: the price-adjustment clauses, the force majeure scope, and the indemnities that allocate a duty spike someone signed up for in 2023. When trade policy moves, the question that lands on you is a contract question: what does your own paper say about who absorbs the cost.
AI trade compliance is the use of AI to handle the research, monitoring, and document work behind import and export obligations. That covers extracting data from trade documents, suggesting classification codes, screening for restricted parties, tracking regulatory changes, and finding the contract language that allocates duty costs. It does not cover the filing itself, and it does not cover the judgment call. Those stay with a licensed professional, for reasons the CBP section below sets out.
GC AI is the enterprise legal AI platform a three-time general counsel (Anki, Bloomtech, and Replit) built for in-house teams, used by 2,100+ in-house legal teams, including 200+ public companies, as of September 2026. Plenty of them move physical goods across borders every day, including Columbia Sportswear, Arc'teryx, Liquid Death, and Wayfair. CEO Cecilia Ziniti built the platform around the work she could not get to fast enough as a GC, and three features carry the tariff load:
Contract Intelligence maps exposure across the portfolio by pulling the clauses that carry it into one view, with the source passage behind every cell.
Automations check the policy sources on a schedule and flag what moved, so review starts from the specific change.
Research answers the authority questions with cited primary law.
What Changed in Tariff Compliance in 2025-2026
The US tariff framework rebuilt itself inside eighteen months. Importers used to plan against one or two familiar authorities. They now plan against a stack of them at once, each with its own scope, its own effective date, and its own carve-outs.
Per Elliott Davis's mid-2026 tariff analysis, that stack now looks like this:
The Supreme Court ruled 6-3 on February 20, 2026, in Learning Resources, Inc. v. Trump, that IEEPA does not authorize presidential tariffs, triggering refund processing and a shift to other statutory authorities.
Section 301 duties of 10% and 12.5% took effect July 24, 2026, tied to the forced-labor investigations listed on USTR's Section 301 page, with the in-transit exemption closed on July 28.
Section 232 adjustments on steel, aluminum, and copper took effect June 8, lowering the US-content threshold from 95% to 85%.
Section 338 duties on Canadian goods took effect August 22, after a three-day suspension from the original August 19 date, with no USMCA carve-out and no in-transit provision.
Executive Order 14411 of June 3 on customs enforcement directs CBP toward more audits, tighter importer-of-record standards, and a minimum penalty floor.
Section 232 duties on imported drones took effect September 3, 2026, including a 100% rate on large and thermal-imaging models and a 25% rate on smaller drones. A 25% duty on additional components takes effect February 9, 2027.
On September 29, a 100% Section 232 duty on patented pharmaceuticals and their ingredients extends to smaller companies, per C.H. Robinson's tariff timeline.
A quarterly memo from outside counsel goes stale at this pace.
Where Tariff Risk Hides in Your Contracts
The customs team files the entry. The argument over who absorbs the duty plays out in the contract, and four clause families decide it.
Clause family | The question it answers | What turns on the drafting |
|---|---|---|
Pricing and pass-through | Can the supplier raise prices when duties rise, on what notice, and with what cap? | The fight moves to renewal, with no contractual footing |
Does government action or a change in law excuse performance, or only delay it? | Courts treat expensive performance differently from impossible performance, so the clause has to say which one it covers | |
Indemnification and taxes | Who bears "duties, taxes, and governmental charges"? | Template boilerplate drafted before anyone modeled a 50% swing ends up deciding the allocation |
Termination and reopeners | Does a sustained cost shock give either side an exit or a renegotiation trigger? | You stay in a deal the economics stopped supporting |
Reading one agreement is straightforward. The exposure question runs across the whole portfolio: which of your supplier and distribution agreements carry pass-through language, which cap it, and which say nothing at all. That is a hundred-contract question, and it arrives on a deadline set by someone else.
This is the job Contract Intelligence was built for. It extracts those clause families across the portfolio into a source-cited View, so the answer to "what happens to us when the duty lands" comes from your own paper, with the passage behind each cell. Here is what that looks like end to end:
Trade-Policy Monitoring Is Legal Work Now
In FTI Consulting and Relativity's seventh annual General Counsel Report, published February 2026, 97% of general counsel reported increases in work volume, and tariffs tied with contract management as the second most cited driver, behind only new regulations and laws.
That is the shape of the problem. The obligations that move contracts arrive ahead of any customs filing, in Federal Register notices, executive orders, and USTR actions. Somebody has to read them on the day they publish, and increasingly that somebody sits in the legal department.
A GC AI customer, the chief legal officer of a multibillion-dollar logistics company, described how the assignment arrived:
"I was not necessarily a leader on tariffs. And our CEO looked at me and said, look, I need you to be a thought leader on tariffs. And I was like, how am I going to be a thought leader on tariffs? Well, I guess I'm going to go to GC AI and figure it out."
She now runs that monitoring in-house, watching Federal Register notices, executive orders, and trade-policy signals so she can brief the business ahead of the effective date.
That reading used to be a subscription memo that arrived on someone else's schedule. With Automations, the sources get checked on a cadence you set, each change comes through with what moved, and the lawyer's review starts from the delta. Pair the monitoring with the exposure map, and the advice reaches the business before the effective date.
Where AI Stops and Reasonable Care Begins
On January 16, 2026, CBP issued ruling H350722, the first time the agency addressed an AI tool directly in the context of customs business. A platform can transmit information, and it can narrow a product to a six-digit HS heading as research assistance. Making the final ten-digit determination that goes on the entry is customs business, and that requires a licensed customs broker or the importer of record. AI-assisted tariff compliance means a person still signs.
The standard underneath that ruling is older. Under 19 U.S.C. § 1484, the importer of record owes reasonable care on every entry. Reasonable care is a human duty. It cannot be delegated to software, and an audit will ask who exercised it.
For a legal department, that boundary is good news. The contract analysis, the authority research, the amendment strategy, and the record of what the company decided and why have always been legal's job, and none of them sit on the customs-business side of the line.
The same CLO described the working pattern that results:
"Before, I'd have to go right to counsel, or go to Google and try to figure some things out. Now I'm outlining my thoughts with more strategic finesse, because I can have AI help me research and clarify what is truly important for the business. And then I have that vetted by counsel to make sure I didn't make any mistakes. It takes a shorter turnaround time because I've done most of the work."
Two practical consequences follow. Anchor every research query to a date, because a rate that was right last Tuesday may not be right today. And keep the record: the question you asked, the answer you got, the citations you checked, and the call you made. With Executive Order 14411 pushing CBP toward more audits and tighter importer-of-record standards, that record is the defense.
How Legal Teams Run the Tariff Response
The work splits in two. One part happens once, before the next action publishes. The other happens the day it does.
Build the exposure map first. Load the supplier, distribution, and reseller agreements that touch imported goods into Contract Intelligence, and extract the four clause families into a single View: pass-through language and its caps, force majeure scope, the duties-and-taxes allocation, and any cost-shock reopener. Add the counterparty's country of origin if your paper records it. The map takes an afternoon to build, and every future duty after that becomes a query you can run in minutes.
Then, when an action publishes, the response runs in five steps.
Confirm the authority and scope from the primary source: Research returns the cited answer. Scope is the part that bites. The three Section 338 proclamations are known as the dairy, alcohol, and vehicles tariffs, and their annexes reach 554 eight-digit HTS provisions, including furniture, plywood, cement, maple syrup, and hockey equipment. Coverage is matched at eight digits, so a product one HTS line away from a listed code may not be caught at all. Read the annex, because the headline categories undersell the reach.
Query the exposure map: Which contracts touch the covered goods, and what do their pricing, force majeure, and tax clauses say? The answer should arrive with the source passage attached, so you can check the language yourself.
Rank the conversations: Suppliers with uncapped pass-through and customers with fixed pricing go first, because those are the two positions where the duty lands on you by default.
Draft from positions you already hold: The amendment and notice templates come out of your Playbook, calibrated to the fallbacks your team has already approved, so the first draft starts from your own standard.
Write the file note: What legal reviewed, what it advised, when, and what it relied on. This is the reasonable-care record, and it is cheap to write today and expensive to reconstruct in an audit.
Counsel keeps the judgment calls. The reading gets faster, because one query surfaces the contracts that matter.
September 29 is next on the calendar. Have the exposure map open before it.
Frequently Asked Questions
What Is Tariff Compliance?
Tariff compliance is the set of obligations an importer meets to bring goods into a country lawfully and pay the correct duty: classifying each product under the right HTS subheading, declaring its country of origin and value accurately, claiming only the preferences it qualifies for, and keeping records that support all of it. In the US, the importer of record carries that responsibility under 19 U.S.C. § 1484, which requires reasonable care on every entry.
Can Generic AI Tools Like ChatGPT Be Used for HTS Classification?
No. General-purpose models do not apply the General Rules of Interpretation that classification requires, do not read from current customs databases, and return codes that look plausible while being wrong often enough to create real penalty exposure. They also leave no audit trail. Classification research belongs in a purpose-built tool, and the determination itself belongs to a licensed broker or the importer of record.
What Does CBP Consider Permissible Use of AI in Customs?
CBP addressed this directly in ruling H350722, issued January 16, 2026. General research and tariff simulation are permissible, and an AI tool may narrow a product to a six-digit HS heading. Supplying the ten-digit HTS code for specific merchandise being imported is customs business, and customs business requires a licensed customs broker or the importer of record.
Does Using AI Satisfy the Reasonable Care Standard?
Not on its own. Reasonable care under 19 U.S.C. § 1484 sits with the importer of record and cannot be delegated to software. AI supports reasonable care when a qualified person reviews the output, the query is anchored to a date, and the file records what was asked, what came back, which citations were checked, and who made the call.
What Penalties Apply if AI Is Used to Conduct Customs Business Without a License?
Under 19 U.S.C. § 1641(b)(6), a person who intentionally transacts customs business without a valid broker's license faces a penalty of up to $10,000 per transaction, with aggregate penalties under that section capped at $30,000. Brokers who let unlicensed tools perform customs work on their behalf also risk suspension or revocation of the license.
Will Using AI Reduce My Legal Liability for Tariff Declarations?
No. The importer of record answers for the accuracy of every declaration, whether or not AI assisted. What AI changes is how fast you reach a defensible answer and how well you can document the reasoning behind it.
Can a Force Majeure Clause Cover a Tariff Increase?
Sometimes. Force majeure clauses generally excuse performance that becomes impossible or illegal, while a tariff makes performance more expensive, which courts treat differently. Clauses that expressly name changes in law, government action, or trade restrictions give more room than generic acts-of-God language. Read the specific clause before relying on it, and check whether it excuses performance or delays it.
Who Owns Tariff Risk, Procurement or Legal?
Both, split by layer: procurement owns the commercial response (resourcing, pricing negotiations, supplier strategy), while legal owns the contractual layer (what the current agreements allocate, what the amendments should say, and what the company's filings and records need to show). The teams that handle tariff shocks well run the two layers off one shared view of what the contracts say.
How Is AI Trade Compliance Different From Customs Compliance Software?
Customs compliance software automates the filings: classification codes, denied-party screening, entry documentation. AI trade compliance covers the questions those systems don't reach, including which supplier agreements carry tariff exposure, what the force majeure language covers, and what an amendment should say. Companies with import volume end up running both, in different hands. GC AI’s Contract Intelligence is built for that second layer, pulling the pricing, force majeure, and indemnity language out of the contracts themselves.
