1. Develop your tariff strategy now: Shifting tariffs and regulations demand ongoing contract reviews.  

2. Contract clarity: Clear terms on pricing, tariffs, and supply obligations reduce disputes.

3. Diversify sourcing: Broaden supply chains for EV materials to reduce reliance on geopolitically sensitive regions.

This year’s survey highlights mounting concerns tied to geopolitical and economic policies. Unsurprisingly, increased tariffs under the new Trump administration (71%) topped our list of responses. Disruptions from geopolitical tensions (29%) further compound these challenges, creating uncertainty that reverberates across sourcing and production networks.

These geopolitical tensions have amplified bottlenecks in the EV battery supply chain. EV production instability, the second highest concern on the list (48%), and challenges in securing EV battery materials (47%) paint the picture of an industry focused on addressing these economic issues. Economic pressures (25%) add another layer of complexity, prompting automotive industry companies to weigh cost-management strategies against the need for innovation and supply chain resilience.

Additionally, legal challenges to supply agreements (22%) and heightened scrutiny of human rights and labor compliance in global supply chains (12%) are reshaping how automotive industries approach contractual relationships. Some are exploring solutions such as enhanced visibility tools, downstream supplier diversification, and contract renegotiations to address these risks while maintaining operational stability.

The ongoing shifts in tariffs on imports from Canada and Mexico challenge North American automotive supply chains, affecting both finished vehicles and critical components. With 66% of survey respondents ranking tariffs as their top concern, it is clear that businesses consider tariff issues top of their list of priorities for 2025.

Legal teams play a key role in crafting contracts that clarify responsibilities for tariffs under these new conditions. Because of increased dispute contract terms, legal teams will likely remain at the forefront of effectively managing disputes when conflicts arise. Even when tariffs are not in place, companies are proactively reviewing agreements to mitigate future risks and avoid disputes.