Key highlights:

• • • Plans without funding are political theater, not strategy 鈥� Across the G20 and beyond, governments spend about $1 per vulnerable person per year, making the most comprehensive national action plans functionally undeliverable.

    • Corporate forced labor is a crime with no perpetrators 鈥� Despite an estimated tens of millions of victims in global supply chains, there has been only one forced labor investigation ever brought against a Fortune 500 company, exposing a near-total absence of criminal accountability in non-financial industries.

    • Real-time data accountability can work on a shoestring budgets 鈥� Uganda’s TipMap platform, built on a budget of just hundreds of thousands of dollars with NGO and US government support, demonstrates that transparent, publicly accessible prosecution tracking is achievable even for low-income countries 鈥� yet most wealthy nations have yet to replicate this model.

Every year, governments around the world publish sweeping national action plans to combat modern slavery, covering everything from vulnerable children, forced labor, and gender-based violence to prosecution targets and victim support. These action plans are, in many cases, genuinely comprehensive documents, and also in many cases, they are almost entirely unfunded.

That is the central finding of the (MSPI), a new tool developed by Duncan Jepson, Director of Strategy and Operations at . After decades working across supply chains, corporate law, and financial crime compliance in Asia, Jepson grew frustrated with a sector that was generating more conferences and consultants than criminal prosecutions. The MSPI takes a step back from that ground-level work and asks how governments are investing in this problem at a scale that matches their stated ambitions.

The answer, unsurprisingly, is that there is a big gap between plans and funding the execution of those plans. Across the G20 plus additional countries, total government spending on modern slavery prevention amounts to roughly $1.6 billion annually, Jepson notes. When measured against the estimated population of up to 2 billion people living in conditions of poverty and precarity that make them vulnerable to exploitation, the 鈥渋nvestment鈥� by governments works out to approximately $1 per person per year.

Grand plans & empty coffers

The MSPI evaluates governments across four dimensions, which include the context of exploitation within their borders, the comprehensiveness of their national action plan, the funding allocated to that plan, and the measurable outcomes produced. The gap between the second and third dimensions is the point at which the analysis reveals the most confounding gap.

Most national action plans, Jepson notes, look remarkably similar regardless of whether they come from wealthy nations or some of the poorest countries in the world. They include all the right elements; however, the problem is that the ambition of the plan rarely maps onto available resources. “If you see a similar kind of plan in a country which is not providing anywhere near the same investment, maybe only providing $10 million to $20 million,” then they’re clearly not going to be able to build the kind of institutional mechanisms and have them operational to achieve their stated ends, Jepson explains.

When measured against the estimated population of up to 2 billion people living in conditions of poverty, the 鈥渋nvestment鈥� by governments works out to approximately $1 per person per year.

This gap is partly a result of how these plans get written. Policy teams include every desirable outcome, every population group, and every intervention type because comprehensiveness signals seriousness. The result is what Jepson describes as a political product rather than a strategic one because it is detached from realities of resource constraints.

The three Ps framework 鈥� set out in the , which organizes anti-trafficking efforts around prevention, protection, and prosecution 鈥� has drifted from being a planning tool into being a target in itself. Governments check the boxes, publish the plan, and treat that as a win. The actual investment required to deliver outcomes becomes secondary.

Many perpetrators face no accountability

Perhaps the most sobering element of Jepson’s analysis concerns corporate accountability which, outside of healthcare and financial services, is extremely limited for criminal matters such as forced labor. Modern slavery in global supply chains, particularly forced labor in agriculture, manufacturing, fishing, and extractive industries, generates enormous profits. Prosecutions against the corporations involved are nearly nonexistent.

The , which Jepson brought to the U.S. Department of Homeland Security鈥檚 investigations unit a few years ago, remains a rare landmark. When he received a World Customs Organization award for the work, the citation described it as recognition for “the first investigation into a Fortune 500 company.鈥� Indeed, the fact that there is only one successful investigation in the entire history of Fortune 500 enforcement on forced labor is stunning in itself.

The structural reason for this, Jepson argues, is that non-financial industries operate without a criminal legal framework wrapped around their regulatory obligations. Banks are required to identify suspicious transactions, file reports, and de-risk clients connected to illicit activity, all under threat of serious legal regulatory consequence.

Modern slavery in global supply chains, particularly forced labor in agriculture, manufacturing, fishing, and extractive industries, generates enormous profits, while prosecutions against the corporations involved are nearly nonexistent.

Manufacturers, food producers, and commodity traders face no equivalent pressure. Their obligations tend to be framed in the language of sustainability and ethical sourcing, which are voluntary, subjective, and entirely company controlled.

When violations are discovered, the response is typically managed internally through grievance mechanisms, remediation programs, and consultant-led audits. Workers rarely have access to independent legal recourse and access to justice.

What good funding and enforcement should look like

Jepson is careful to point out that meaningful progress exists, even on limited budgets. , developed with support from the Human Trafficking Institute and US funding, provides a real-time, publicly accessible database of trafficking prosecutions and arrests. For a country investing only hundreds of thousands of dollars in this space, the platform demonstrates how transparency and institutional accountability can be achieved without enormous resources.

Italy and Germany both earn recognition for aligning their plans with their investment levels and for building on contextual knowledge. Yet neither country has solved corporate supply chain accountability, even though both demonstrate that coherent strategy tied to realistic resourcing produces better outcomes than aspirational planning without funding.

The US import ban mechanism, developed through U.S. Customs and Border Protection, remains the most significant enforcement tool in the world, although it鈥檚 still largely unique to one country.

The case for realistic investment

What Jepson would like to see instead is relatively straightforward. Governments need to develop a deeper, intentional recognition that their current spending levels are insufficient, he says, adding that investment in prevention also makes economic sense.

Every dollar not spent stopping exploitation upstream generates far greater costs in law enforcement response, victim and social services, and lost economic productivity downstream. Clearly, $1 per vulnerable person per year will not build the necessary infrastructure to protect anyone.

You can find out more about the challenges in combatting force labor in supply chains here

Key takeaways:

• • • The 2027 end date is not a runway 鈥� The One Big Beautiful Bill sets a statutory de minimis end date of July 1, 2027, but its own legislative history explicitly preserves the president鈥檚 authority to restrict it before that date. Sellers banking on a two-year transition period are reading the headline, not the fine print.

    • The Supreme Court win didn鈥檛 save the refunds 鈥� The Supreme Court鈥檚 IEEPA decision was real, but the administration switched legal authority to Section 1321 and kept the suspension running. Combined with congressional cover from the One Big Beautiful Bill, the path to recovering tariffs already paid is genuinely uncertain 鈥� not just delayed.

    • The refund clock just reset 鈥� The lead test case for processing refunds through CBP鈥檚 KAPE system, Atmos, just settled, forcing the process to restart with a new test case. Sellers waiting on refunds are further back in the queue than they realize.

Most e-commerce merchants couldn鈥檛 have told you what de minimis meant two years ago 鈥� mostly because they didn鈥檛 need to. It was the invisible infrastructure of cross-border trade, the threshold below which imported goods pass through customs without duties or taxes. And in the United States, that threshold sat at $800. For small online sellers sourcing internationally, it wasn鈥檛 a technicality 鈥� it was their business model. Now, that model is over.

De minimis was deliberate trade policy built on simple logic: the cost of collecting duties on a $25 phone case exceeds the revenue it generates. Let low-value goods flow freely, the thinking went, and e-commerce would grow 鈥� and it did.

The Trump administration鈥檚 first moves targeted Canada, Mexico, and China on fentanyl-related grounds. Then came Executive Order 14324, suspending duty-free de minimis for all countries effective August 29, 2025. Sellers who had never filed a customs entry suddenly had to file informal entries for goods valued up to $2,500 鈥� and pay tariffs on every single one. Last count, that has meant $175 billion in tariffs paid annually, with small shipments accounting for roughly 63% of that.

The legal basis for Trump鈥檚 tariffs 鈥� the International Emergency Economic Powers Act (IEEPA) 鈥� went to the Supreme Court, which constrained presidential authority to pass these tariffs. Many sellers took that as a signal that tariff refunds were coming 鈥� they shouldn鈥檛 have.

Then came the legislative layer that changed everything. The One Big Beautiful Bill Act (OBBBA) 鈥� H.R. 1, now law 鈥� codifies the end of de minimis under Title 19 with a statutory end date of July 1, 2027. Buried in the legislative history, however, is language explicitly stating that nothing in the bill limits the president鈥檚 existing authority to restrict de minimis before that date. The current suspension has congressional cover, meaning that any court challenge faces a much tighter call than it would have had a year ago.

What most sellers are getting wrong

What鈥檚 making matters worse, however, is that many small e-commerce merchants may not fully understand all the nuances of the laws and regulations they are trying to navigate. Indeed, there are certain aspects of the situation that many are getting wrong, including:

The 2027 date is a headline, not a lifeline 鈥� When the ne Big Beautiful Bill passed with a July 1, 2027, , many sellers assumed they had a transition period 鈥� time to adjust pricing, renegotiate supplier terms, and build a compliance infrastructure. Buried in House Report 119-106, however, is language explicitly stating that nothing in the bill limits the president鈥檚 existing authority to restrict de minimis before that date. Congress didn鈥檛 create breathing room; rather, it codified the end while leaving the accelerator fully intact. The 2027 date is when de minimis ends by law. Indeed, it could end sooner 鈥� and effectively already has.

The Supreme Court decision didn鈥檛 unlock refunds 鈥� The Court鈥檚 IEEPA ruling was significant, but the administration鈥檚 response was swift: reimposed the suspension of tariffs under Section 1321 authority as of February 24. The tariff meter never stopped; and now, with the OBBBA鈥檚 legislative history providing congressional cover, the 鈥� which specifically addresses whether sellers are entitled to refunds in the de minimis context 鈥� faces a much harder statutory construction argument than it would have a year ago. This may mean that the Supreme Court win was a legal victory that may not translate into money back.

The refund process just lost its test case 鈥� For sellers hoping to recover duties paid, the most practical path was through the KAPE system run by the U.S. Customs and Border Protection (CBP) 鈥� a workaround allowing refund claims to feed directly into an听听for verification. The lead case proving out that process, , just settled. Now, the trade legal community has to start over with a new test case, and nobody knows how long that is going to take. Sellers who filed protests rather than complaints at the Court of International Trade (CIT) are in a particularly difficult position 鈥� protests have time limits, and the CBP is under court order to re-liquidate open ones. Which legal bucket your entries fall into matters enormously right now.

The bottom line

The de minimis era enabled a generation of small merchants to compete globally on terms that would have been unimaginable 20 years ago. Its sunset doesn鈥檛 mean the end of cross-border e-commerce 鈥� but it does mean the end of operating on assumptions. The 2027 date, the Supreme Court decision, the refund process 鈥� each looked like relief and turned out to be more complicated than the headline suggested.

E-commerce merchants impacted by these de minimis developments need to talk to a trade attorney 鈥� not for the basics, but to understand where your claims stand, whether your protest strategy is still viable, and what the Atmus settlement means for you.

The storm isn鈥檛 over 鈥� and it may be more complicated than most sellers have been told.

For more on this, please tune into the 成人VR视频 Institute鈥檚 recent 鈥淐larity鈥� podcast, featuring , about the challenges facing small e-commerce merchants today

Key insights:

• • • AI as a force multiplier 鈥� Advanced analytics now reveal financial and behavioral anomalies that traditional monitoring systems routinely miss, giving executives a clearer view of emerging risks.

    • Geospatial and digital intelligence converge 鈥� Intelligent networks like OSINT, ADINT, and location-based data expose hidden networks and movement patterns, improving the detection of money laundering, trafficking, and smuggling operations.

    • Enterprise risk strategies must evolve 鈥� Organizations that integrate AI-driven intelligence across compliance, security, and operations can respond faster, reduce blind spots, and operate with greater resilience during high-risk events.

Illicit financial activity has always evolved faster than the systems designed to stop it. And today, the speed and sophistication of criminal networks are accelerating in ways that traditional compliance processes can no longer match. Major international events, such as the 2026 FIFA World Cup, bring millions of visitors, heightened commercial activity, and a surge in cross鈥慴order movement, all creating fertile ground for exploitation.

AI as an intelligence multiplier

In this environment, financial institutions are on the front lines of detection and mitigation, and corporations must strengthen their ability to detect hidden risks. AI 鈥� particularly when combined with digital intelligence sources, behavioral analytics, and geo-referenced data 鈥� has emerged as the most powerful accelerator of that transformation.

Among all of this high-volume activity, AI is redefining how institutions detect early-stage indicators of illicit activity. Instead of relying solely on manual reviews or rule-based monitoring, organizations are increasingly deploying systems capable of analyzing vast volumes of structured and unstructured data at once. Three capabilities are shaping this new frontier:

Open-source intelligence (OSINT) 鈥� Criminal activity, even when intentionally concealed, tends to leave trace signals online. OSINT tools can examine social platforms, online marketplaces, media sources, forums, and digital discussion channels to uncover suspicious behavioral patterns, potential recruitment or exploitation signals, inconsistencies between official identification and online presence, or clusters of accounts linked by shared attributes. For many executives, OSINT has become an indispensable layer of enhanced due diligence, risk scoring, and early threat detection long before suspicious activity appears in financial records.

Advertising intelligence (ADINT) 鈥� ADINT focuses on metadata produced by mobile applications and digital advertising ecosystems. While it does not expose personal identifiers, it reveals mobility patterns, device behavior, and clustering anomalies. This type of intelligence becomes particularly powerful during large-scale events because of the ability to monitor the movement of devices across high-risk corridors, identify unusual concentrations of activity near event venues or border regions, or detect digital behavior consistent with organized criminal logistics. ADINT introduces a geographic and behavioral dimension to risk that enables institutions to understand not only who a customer appears to be, but where they go, how they behave, and whether those patterns align with legitimate economic activity.

AI-enhanced investigations 鈥� Modern platforms now merge financial data with OSINT and ADINT inputs and then apply descriptive and generative AI (GenAI) to draw connections that would be impossible to detect manually. These systems can classify digital communications by sentiment or intent, identify unusual financial behavior within seconds, convert large datasets into actionable intelligence summaries, translate and interpret foreign-language content, and map networks through recurring metadata or visual similarity. For decision-makers and organizational stakeholders, this shift represents a dramatic reduction in blind spots and a faster escalation pathway when emerging threats surface.

Why financial institutions and corporations must lead

Human trafficking, migrant smuggling, and money laundering cannot function at scale without the financial system. Even when exploitation occurs offline, profits eventually make their way into the formal economy through remittances, structured cash movements, shell companies, digital wallets, recruitment payments, or short-term rental arrangements.

AI enhanced investigations can help institutions identify subtle but meaningful indicators, such as coached or inconsistent customer responses, accounts linked through shared devices or addresses, rapid deposits followed by immediate withdrawals, purchases that do not correspond to a customer鈥檚 risk profile, payments directed to unverifiable recruiters, unusual patterns of short-term housing across multiple individuals, or transaction flows that follow established exploitation routes.

Illicit financial activity has always evolved faster than the systems designed to stop it. And today, the speed and sophistication of criminal networks are accelerating in ways that traditional compliance processes can no longer match.

All this information already exists inside institutional data today; AI simply makes it visible and usable much more easily and quickly.

While financial institutions are central in detecting illicit finance, companies across multiple sectors face heightened exposure during large events. Hospitality, logistics, transportation, construction, real estate, and digital services all see risk intensifying as demand surges and oversight becomes more complex.

Those senior leaders who responsible for operational continuity should integrate AI-powered monitoring into their internal controls. This can help detect unusual workforce recruitment patterns, unexpected badge or access activity, subcontractor behavior that conflicts with declared operations, repeated presence in high-risk zones, or digital communications that hint at coercive or exploitative conduct.

In the fight against illicit finance, technology is no longer optional. Indeed, it is our most powerful ally.

You can find out more about the fight against illicit finance and money laundering here

Key insights:

• • • Tariffs erode supply chain integrity, not just margins 鈥� Rapid policy shifts can destabilize manufacturers鈥� supplier relationships, customs compliance, and production networks.

    • Unpredictability is the real threat 鈥� Changing duty rates and exemptions undermine forecasting and inventory planning, creating bottlenecks that ripple across customer commitments.

    • Adaptation beats anticipation 鈥� Leading manufacturers aren’t waiting for policy clarity, rather they鈥檙e adapting to the uncertain environment now.

Tariffs have presented significant challenges for manufacturers, increasing input costs and undermining the stability of global supply chains. During the Trump administration, tariffs have become a focal point in debates over the broader economic implications of trade policy. Since 2025, has included a 10% minimum global tariff on a broad range of imports, additional measures targeting China, and various product- and country-specific actions 鈥� all developments that have reshaped corporate sourcing strategies and international trade planning.

In February, the U.S. Supreme Court’s decision in听 marked a pivotal shift in trade authority. By a 6-3 vote, the Court held that the President lacked the constitutional authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs, emphasizing that such measures constitute taxes and are therefore within exclusive legislative domain of the U.S. Congress. The ruling invalidated many tariffs implemented by President Trump in 2025, providing some legal clarity while also raising questions about the future of US trade policy. Although the decision limits executive power, uncertainty still persists regarding how Congress will exercise its reasserted authority and what new legislative or trade measures may follow in such a dynamic and uncertain economic environment.

This Supreme Court’s ruling does not eliminate tariffs but rather shifts their governance by curtailing unilateral executive authority under IEEPA and reasserting Congress’s constitutional role in setting tax and customs policy. That means, of course, that tariffs will not disappear but instead will become more politically negotiated and legislatively codified. For supply chain leaders, this introduces a different kind of uncertainty that will be rooted in legislative timelines, committee negotiations, and the potential for prolonged policy stalemates.

Indeed, it鈥檚 unclear whether tariffs imposed through statute will prove more durable and harder to reverse than those enacted via executive order. Ultimately, this legal shift underscores the need for manufacturers to take a proactive adaptation and not one of complacency.

For corporate risk professionals, particularly those within manufacturing companies, these developments carry substantial implications. Tariffs extend beyond increasing import prices and affect profitability, workforce planning, and long-term supply chain resilience. They introduce volatility into customs procedures, supplier qualification, cross-border logistics, and production network design. When trade rules change rapidly, as they have in recent months, the integrity of global supply chains is increasingly difficult to maintain.

Why tariffs hit supply chain integrity so hard

In a global supply chain, every cross-border movement is governed by import and export rules set by the countries involved. Tariffs change those economics immediately, and they also trigger a chain reaction that ripples through sourcing, logistics, compliance, and planning. For example, the (CBP) has had to issue repeated implementation updates on new tariff actions, including guidance tied to imports from China, Canada, and Mexico, underscoring how quickly operating conditions can change for importers. That creates several clear risks to supply chain integrity.

One of the first impacts is on supplier relationships. When tariffs make a sourcing region less viable, manufacturers are often forced to move away from long-established suppliers and instead quickly on-board alternatives in lower-tariff markets. That may reduce immediate cost pressure, but it can also weaken quality control, transparency, and reliability if the new suppliers prove to be less able.

This is already showing up in manufacturer behavior. , a nonprofit organization dedicated to supporting manufacturing leaders, reported that in January, more than half (57%) of manufacturers said that US tariff policies were having a moderate or significant negative effect on confident decision-making related to sourcing, pricing, and investment timing. The same research found that companies were increasingly shifting from passive monitoring their supply chains to making active changes in sourcing.

Even after the Supreme Court鈥檚 legal invalidation, many impacts of previously imposed tariffs persist, as retroactive refunds are not guaranteed 鈥� indeed, the government has for such refunds. And these administrative delays in duty recovery can strain cash flow, while companies that already restructured their operations by relocating suppliers, renegotiating contracts, or investing in new logistics infrastructure cannot easily unwind those changes.

Clearly, the economic and operational consequences of past tariffs have already altered global sourcing maps, and those manufacturers that had shifted production to Southeast Asia or Mexico during the 2025 tariff surge may maintain those footprints even if duties are lifted, due to sunk costs or new regional advantages. This illustrates how even temporary policy shifts can have permanent effects on supply chain integrity.

Tariffs force structural changes and create bottlenecks

Tariffs also create operational instability. When duty rates, exemptions, and country-specific rules change, manufacturers鈥� ability to forecast their trade strategy becomes more difficult, and inventory planning becomes less reliable. Customs processing can become more complicated as companies work through classification questions, preference claims, and changing documentation requirements.

For manufacturers running lean networks, that unpredictability can be dangerous. Delays at ports, shipment holds, or reworks tied to customs compliance can ripple across production schedules and customer commitments. The CBP has specifically noted ongoing tariff implementation updates through its Cargo Systems Messaging Service, which only underscores how much administrative attention that manufacturers now need to dedicate to keeping updated on trade compliance.

Tariffs can also break the logic of just-in-time supply chains. If landed costs become unstable or sourcing risk rises, companies often shift toward just-in-case strategies by holding more inventory, extending forecast horizons, or redesigning production footprints. That may improve resilience in the short term, but it also ties up working capital and reduces efficiency.

Manufacturers Alliance research describes this as a move toward tactical adaptation rather than true resolution. In other words, many manufacturers are learning how best to operate in a tariff-heavy environment; however, as the system becomes more buffered, more complex, and often less efficient, it鈥檚 unclear when or whether things will return to a state resembling the previous stability.

How supply chain professionals can mitigate tariff risk

For corporate risk and supply chain leaders, the most practical response starts with supplier diversification. Overconcentration in one tariff-exposed region creates avoidable vulnerability. Manufacturers also should use supplier information management technology to map sub-tier dependencies, because tariff exposure often sits deeper in the supply base than tier-one suppliers alone reveal.

Other strong mitigation strategies include nearshoring to reduce long-distance logistics exposure and scenario planning to stress-test tariff shocks before they happen.

Those manufacturers best positioned for continued disruption ; instead, they are building flexibility into sourcing, inventory, and trade compliance now.

The bottom line

The Supreme Court’s decision in Learning Resources marks a significant check on executive power around tariffs, but it does not signal a return to stable or predictable trade policy. Tariffs remain a potent and politically salient tool, now subject to legislative rather than unilateral control.

For manufacturers and their corporate risk professionals, the imperative remains unchanged: Supply chains must be designed not just to survive today’s tariffs, but to adapt to the next wave of trade policy disruption. Indeed, resilience is no longer a function of cost minimization alone. It requires transparency, agility, and a deep understanding of how legal, political, and economic forces converge at the border. The most effective manufacturing companies will continue to be those that treat tariff exposure not as a compliance afterthought, but as a core dimension of supply chain integrity.

You can find out more about the challenges manufacturers are facing from tariffs here

• • • The ceasefire is between the US and Iran and is not a regional peace 鈥�听Israel launched its heaviest strikes yet on Lebanon within hours of the announced deal. Iran hit oil infrastructure in Kuwait, the UAE, Bahrain, and Saudi Arabia 鈥� including the East-West Pipeline, the primary route for bypassing the Strait of Hormuz. Companies planning around a return to normal should instead plan around the idea that the war has narrowed, not ended.

    • If the disruption stays within one quarter, the economic damage is painful but reversible 鈥� The Dallas Fed projects WTI oil at roughly $98 per barrel with a modest GDP hit in a short-closure scenario. The catastrophic scenario 鈥� WTI above $132 with sustained negative growth 鈥� requires the closure of the war to drag past Q2. Every week the ceasefire holds improves the odds, but Iran’s strike on the Saudi bypass pipeline complicates even the optimistic timeline.

    • Iran may have stumbled into the most lucrative chokepoint tax in modern history 鈥� At conservative estimates, transit fees charged for traversing the Strait of Hormuz could generate $40 billion to $50 billion for Iran annually, or roughly 10% to 15% of Iran’s pre-war GDP 鈥� all at near-zero operating cost. That revenue stream inverts Tehran’s incentives. Indeed, keeping the toll system in place may now be worth more than restoring free transit.

On April 7, less than two hours before a self-imposed deadline that threatened the destruction of Iran’s civilian infrastructure, President Donald J. Trump announced a two-week ceasefire in the war in Iran that began on the last day of February and continued over 38 days of sustained air strikes by the Unites States and Israel. In turn, Iran carried out retaliatory attacks across over a dozen countries and forced the effective closure of the Strait of Hormuz.

With the ceasefire, all that has paused. Yet, the question every boardroom, general counsel’s office, and procurement team is asking right now is simple: How can I plan around this?

The honest answer is, not yet 鈥� and the first 24 hours have already shown why.

A fragile, but functional peace

The ceasefire is remarkably thin, and it鈥檚 based on three operative clauses: i) the US and Israel halt strikes on Iran; ii) Iran halts retaliatory attacks on the US and Israel; and iii) Iran allows “safe passage” through the Strait of Hormuz. Everything else 鈥� from nuclear terms, sanctions, reconstruction, and the legal status of Hormuz transit 鈥� has been punted to negotiations in Islamabad beginning April 10, with Pakistan mediating.

With the ceasefire, the question every boardroom, general counsel’s office, and procurement team is asking right now is simple: “How can I plan around this?”

However, what the ceasefire covers matters less than what it doesn’t. Within hours of the announcement, Israel launched its heaviest strikes yet on Lebanon, and Iran warned it would withdraw from the ceasefire if attacks on Lebanon continue. Meanwhile, Kuwait, the UAE, and Bahrain all reported fresh Iranian missile and drone strikes targeting oil, power, and desalination infrastructure after the ceasefire was in place. Most critically, Iran struck Saudi Arabia’s East-West Pipeline, the main route by which Gulf producers have been rerouting oil to bypass the blockaded strait.

That pipeline strike should command attention in every supply chain and energy risk briefing this week because it signals how shaky the agreement is, and that Iran remains a long-term threat to vital infrastructure across the region.

For companies operating in or sourcing from the Gulf, the practical implications are immediate. This is not a ceasefire that restores pre-war operating conditions; rather it is a bilateral pause between two belligerents while the regional war continues around them. Insurance premiums, shipping risk assessments, and supply chain contingency plans should reflect that distinction until there is a meaningful shift.

What does this mean for the next two weeks?

Both sides are claiming victory 鈥� and increasingly, claiming different deals. Trump called Iran’s 10-point proposal “a workable basis on which to negotiate”; and Iran’s Supreme National Security Council called the ceasefire a “crushing defeat” for Washington. The White House now says the 10-point plan Iran is publicly circulating differs from the terms that were actually negotiated for the ceasefire. Tehran, meanwhile, says there is no deal at all if Lebanon isn’t included 鈥� a condition the US has not acknowledged. And of course, the Strait of Hormuz remains closed.

These are not the hallmarks of a stable agreement; but they may be the hallmarks of a durable one. The deal is thin enough so that each side can brief its domestic audience on a different story, and as long as neither is forced to reconcile those stories publicly, the pause holds.

And the incentives to keep talking are asymmetric but real. The US has watched gas prices surge past $4 nationally as domestic support for the war 鈥� which started at levels best described as in a hole 鈥� continued to drop even further. Goldman Sachs raised its recession probability to 30% and JPMorgan to 35%, and every day the strait stays closed pushes those numbers higher. The administration needs the global economy to exhale and needs distance itself from a war so it can focus on other priorities, including an already difficult midterm election cycle.

With the ceasefire, all that has paused. Yet, the question every boardroom, general counsel’s office, and procurement team is asking right now is simple: How can I plan around this?

Iran, for its part, wants the bombing to stop. Its conventional navy has been functionally destroyed, its air defenses are highly degraded, its nuclear facilities have sustained severe damage, and its cities, bridges, and transportation networks have been hit repeatedly. The regime survived and arguably emerged with greater domestic legitimacy than it had before the war, but the physical toll is mounting. Tehran wants the strikes to stop so it can claim victory by survival without incurring any more costs.

This mutual exhaustion is the load-bearing structure of the ceasefire. If the ceasefire holds for 72 hours (as I think it might), and if the strait begins opening to escorted traffic by Friday as Iranian officials have signaled, and if neither side finds a reason to walk away before the Islamabad talks convene, then the ceasefire will likely be extended. Not because the underlying disputes get resolved, but because the cost of resuming hostilities exceeds the cost of continuing to talk. Expect a rolling series of extensions, probably 30 to 45 days at a time, that resolve nothing while letting global markets gradually stabilize.

As we wrote earlier this month, if the disruption remains limited to roughly one quarter, the oil price shock is painful but reversible, ugly, but manageable. And every week the ceasefire holds pushes the trajectory toward the manageable scenario.

What happens after the ceasefire?

Again, if the ceasefire holds, we then have to start thinking about how this conflict resolves. Not surprisingly, this is where it gets uncomfortable.

The conventional assumption in Washington and in global markets is that the Strait of Hormuz will return to normal once the fighting stops. That assumption underestimates what Iran has built.

Iran’s parliament is working to pass a Strait of Hormuz Management Plan, codifying its claimed sovereignty over strait transit and establishing a legal framework for collecting toll fees. Media reports indicate Iran has been charging vessels between $1 million and $2 million per transit and is planning to keep charging those tolls for all ships as the strait reopens. So, at $1 million per ship, and with up to 135 transits per day, 365 days a year, that’s about $40 billion to $50 billion in annual revenue for Iran, or up to 15% of Iran’s pre-war GDP. All at an operating cost that approaches zero.

Iran didn’t enter this war planning to build the most lucrative chokepoint tax in modern history, but it may have stumbled into exactly that.

Compare that to Iran’s oil sector, which generated approximately $53 billion annually in 2022 and 2023, required massive capital investment and maintenance, and was subject to constant disruption. The toll revenue is comparable in scale, dramatically cheaper to operate, and immune to sanctions. If the final number is even a fraction of this, it鈥檚 still a massive financial shot in the arm for Iran that could become a far greater advantage than the damage to capital that the war has inflicted upon the state.

Iran didn’t enter this war planning to build the most lucrative chokepoint tax in modern history, but it may have stumbled into exactly that.

Of course, this changes the structural incentives around the Strait of Hormuz in ways most analysts haven’t fully absorbed. A permanent toll system gives Iran a revenue base to rebuild the military assets it lost, reduce its dependence on oil exports, and fund domestic investment that could blunt future protest movements. The regime’s cost-benefit calculus has inverted: Keeping the toll operational in place may now be worth more than restoring the pre-war status quo.

For the US and Israel, the only way to dismantle this arrangement is by force and the last 38 days demonstrated the limits of that approach. The US achieved air and naval superiority, destroyed Iran’s conventional military, and killed the supreme leader. None of it was enough to compel capitulation, and in fact, may not have even come close. A second campaign faces the same likely result, against a population now unified by the experience of surviving the first one.

The war didn’t just disrupt global trade. It may have permanently repriced the most important shipping lane on Earth 鈥� and left every piece of energy infrastructure in the Gulf more vulnerable than it was before the first air strike landed.

You can find more about the global impact of the war in Iran here

Key takeaways:

• • • Q2 is a wound that heals if the war stops 鈥� Oil spikes, inflation revisions, and supply disruptions are painful but mostly reversible in a short-war scenario. The exception is insurance and risk premiums for Gulf maritime transit, which are permanently repriced.

    • Q3 is a wound that scars 鈥� Sustained oil at $130 per barrel changes household and business behavior in ways that don’t snap back. Recession probability crosses the coin-flip threshold and supply chain disruptions cascade into industries far from the Gulf.

    • Q4 is a different body 鈥� Even if the war ends, the global economy has rebuilt itself around the disruption. Trade routes, supplier relationships, and risk models have been permanently rewired, especially if there is nothing structural to prevent the Strait from closing again.

This is the second of a two-part series on the impact of the war with Iran as the conflict continues. In this part, we鈥檒l walk through what a quarter-by-quarter economic scenario would look like if the war continues.

Previously, we made the case that the US-Iran war is unlikely to end quickly. The regime hasn’t collapsed, the asymmetric force controlling the Strait of Hormuz is nowhere near neutralized, and diplomacy seems dead on arrival. Most significantly, the United States military is escalating, not winding down.

While the first part of this series was about the military and diplomatic picture, this piece is about your balance sheet.

What follows is a quarter-by-quarter map of what a prolonged conflict means for the global economy, charted from now through Christmas 2026. We鈥檒l cover how oil, supply chains, GDP forecasts will be revised in real time, and how disruptions that look temporary in Q2 could trigger a permanent rewiring of how the global economy moves goods, prices risk, and sources critical inputs.

Even if your company doesn鈥檛 import a single barrel of Gulf crude, you could still get hit by this. Indeed, if you’re plugged into the global economy like the rest of us, you’re going on this ride.

Q2 2026 (April鈥揓une): The wound that heals

If the war ends by the close of the second quarter on June 30, most of the damage is reversible 鈥� painful, but reversible.

Brent crude is up about 60% since before the start of the war when it was roughly $70 per barrel; and Capital Economics , prices could fall back toward $65 by year-end. The interim outlook from the Organisation for Economic Co-operation and Development (OECD) now to be 4.2% for 2026, up sharply from 2.8%, assuming energy disruptions ease by mid-year. If that assumption holds true, it鈥檚 likely we鈥檒l be able to muddle through the pain.

Even in the most optimistic scenario, however, Q2 introduces disruptions beyond oil that most people aren’t tracking. The Gulf supplies roughly 45% of global sulfur, and Qatar produces around one-third of the world’s helium, which is essential for semiconductor manufacturing. Further, Qatar鈥檚 liquified natural gas (LNG) production was significantly damaged by Iranian strikes.

Even in the most optimistic scenario, however, Q2 introduces disruptions beyond oil that most people aren’t tracking.

Further disruptions in fertilizer supply chains could delay spring planting, which could ripple into agricultural yields well into 2027. These effects don’t snap back the moment oil flow normalizes; they have their own timelines.

And here’s the one thing that doesn’t reverse even in the best case 鈥� risk premiums. The Strait of Hormuz was priced as a chokepoint that would never actually close. So when it did, that repricing is permanent and will be felt across the world as risk around other too important to fail chokepoints is itself reevaluated and priced higher.

Q3 2026 (July鈥揝eptember): The wound that scars

If a Q2 end to the war represents a recoverable spike, a Q3 end is where the word structural starts showing up in the discussion.

Capital Economics models Brent at roughly $130 per barrel 鈥� or roughly 14% higher than where it is now 鈥� in a prolonged scenario. At those prices, the damage stops being abstract. And Moody’s Analytics chief economist Mark Zandi estimates that every sustained $10-per-barrel increase . At $130 (nearly double pre-war levels) that’s approaching $2,700 per family. That is the kind of money that changes behavior.

In this case, Zandi says, especially if the cost of oil stays elevated for months 鈥� and by Q3, it would have. Moody’s recession probability model was pushing 50% in late-March when oil was $108 per barrel. At $130, the math speaks for itself.

Again, in this scenario, the damage fans out beyond energy. Fertilizer shortages hit crop yields, and helium disruptions cascade into semiconductors, automotive, and medical devices. The potential impact on AI-related manufacturing alone could spook investors already primed to see AI as a bubble. Capital Economics projects Eurozone growth at 0.5% and Chinese growth below 3%. Emerging markets could face forced rate hikes that deepen their own recessions.

This is the quarter in which contingency plans become operating assumptions. The question is no longer When does this go back to normal? 鈥�听rather the question is whether normal is coming back at all.

Q4 2026 and beyond: The different body

Here’s what most forecasts don’t capture about a war that continues passed Q4: It almost doesn’t matter whether the war is still active or not. The damage has changed shape, and it’s no longer about what the conflict is doing to the global economy. Instead, it’s about what the global economy has done to itself in response.

Companies that spent Q2 and Q3 diversifying away from Gulf suppliers have now spent real money building alternatives. They are not going back to their previous pathways even if there is a ceasefire. The sunk costs make the reversal unthinkable, and the memory of this conflict makes it irrational. No supply chain director is walking into a boardroom to recommend re-concentrating risk in a chokepoint that closed once and might close again.

The prudent approach for companies remains clear. They should plan for the war to last into at least Q2, probably Q3, with structural effects persisting beyond.

Because, of course, it could close again. If Iran emerges weakened but intact, which is the most likely outcome per multiple intelligence assessments, the result is a hostile state with every incentive to reconstitute its asymmetric capabilities the moment the pressure lifts.

Companies are thus going to reroute their future supplies around the Strait rather than through it. High oil prices and the potential for global shortage will also further accelerate green energy initiatives or alternate fuel sources across the globe as oil security reenters geopolitical calculations. Most importantly, every organization鈥檚 supply chain will need a reevaluation in light of an increasingly dangerous world, with expensive secondary supply chains becoming more a necessity than a luxury.

That鈥檚 the real legacy of a war continuing past the end of this year. Not oil prices on any given day or even insurance premiums, but the permanent repricing of an assumption. The war didn’t just disrupt the flow of goods through the Strait of Hormuz, it broke the premise that some geographies were too big to fail and would be protected and kept open. Once that premise is now broken so thoroughly companies will need to reevaluate whether the concentration of risk in individual areas is a luxury they can afford. Many will find the answer to be no, resulting in an increased push to diversify risk away from single points of failure.

The planning imperative

Fortunately, the best-case scenario remains possible. However, it requires Iran accepting terms it has publicly rejected as existential, its navy being neutralized despite retaining significant asymmetric combat capability, a coalition materializing from countries that have refused to send warships, and mine-clearance operations succeeding with the deck stacked against them. Only then, we鈥檒l see if civilian traffic is willing to risk billions of dollars that the clean-up job was done right. Each is possible, but the odds remain slim.

The prudent approach for companies remains clear. They should plan for the war to last into at least Q2, probably Q3, with structural effects persisting beyond. They should model energy prices at between $120 and $150 per barrel, not $70. The smart companies are the ones building optionality now because the cost of flexibility is far lower than the cost of being caught flat-footed in September.

Four weeks ago, the assumption was that the Strait of Hormuz was too important to close. However, it did, and the assumption that it will reopen quickly deserves the same scrutiny.

You can find out more about the听geopolitical and economic situation in 2026听here

Key takeaways:

• • • The US achieved conventional military dominance, but it hasn’t solved the core problem 鈥� The navy that was destroyed was never the one controlling the Strait of Hormuz. The asymmetric force that is, the IRGCN, retained 80% of its small-boat fleet and may be able to replenish losses from civilian infrastructure faster than the US can eliminate them.

    • All three pathways to a quick resolution are blocked 鈥� The regime has hardened rather than collapsed, the diplomatic positions are nowhere near overlapping, and the US military posture is escalating, including possible ground operations, while allied support remains symbolic.

    • The conflict is likely measured in quarters, not weeks, and the economic difference is not linear 鈥� Businesses should be stress-testing against sustained disruption rather than planning for a return to normal, because the conditions required for a rapid resolution would each need to break favorably 鈥� and right now, none of them are.

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This is the first of a two-part series on the impact of the war with Iran as the conflict continues. In this part, we look at different ways the war could wind down quickly, and why none of them offer an immediate pathway.

The war with Iran is not going to be over by the end of this week.

That sentence shouldn’t be controversial four weeks into the ongoing war with Iran being waged by the United States and Israel, but it runs against the grain of how markets, policymakers, and many business leaders have been processing this conflict. The dominant assumption, visible in equity markets that have wobbled but not cratered, is that this is an acute shock with a definable end date.

However, very little about the military, political, or strategic picture supports that assumption.

While I make no claim to predict the war’s exact duration, I can lay out why the most likely scenarios point to a conflict measured in quarters, not weeks 鈥� and why that difference matters. In the next part of this series, we’ll sketch the economic consequences on a quarter-by-quarter basis, drawing on the latest projections from top economic thinkers. First, however, here is why this war probably drags on.

The wins aren’t winning鈥�

By a surface level scorecard, Operation Epic Fury has been exactly the kind of lopsided success one would expect of a global superpower that鈥檚 going up against a regional player. Iran鈥檚 Supreme Leader was killed in the opening strikes, Iran’s conventional navy was sunk at anchor before they could sortie, and full air supremacy by the US appears established. If you were grading this on the metrics that won wars in the 20th century, you’d be forgiven for thinking it was nearly over.

Yet it is not nearly over. The Strait of Hormuz remains effectively closed. Daily transits have collapsed from 138 ships to fewer than five. Approximately 2,000 vessels and 20,000 seafarers are stranded in the region with nowhere to go. Brent crude is at $108 per barrel as of March 26, up roughly 50% since the war began. The International Energy Agency has called the current situation the largest disruption to global energy supplies in history.

The disconnect between the military scorecard and the strategic reality comes down to a single, underappreciated fact that the US destroyed the wrong navy. To be fair, it’s not like they had much of a choice. Iran’s conventional fleet had to go, and it went; however, that was playing on easy mode. Iran’s conventional fleet, its frigates, corvettes, and submarines, was a prestige force built for Indian Ocean power projection.

You can find out more about the here

The force actually designed to fight America, however, is the Islamic Revolutionary Guard Corps Navy (IRGCN), and it is something else entirely: a dispersed network of hundreds of armed speedboats, coastal missile batteries, thousands of sea mines, drone systems, and midget submarines spread across dozens of small bases along hundreds of miles of Persian Gulf coastline. The IRGCN’s entire doctrine, training, and equipment procurement were optimized for exactly one scenario, that of denying the Strait of Hormuz to a technologically superior adversary. That is the war Iran is now fighting.

Even though the IRGCN lost its most advanced platforms, those were not the workhorses of their fleet. The IRGCN retains an estimated 80% of its small-boat fleet, the fast boats that hide among fishing dhows, the crews that can scatter onshore and remount on surviving craft. The US is tasked with the mission of hunting small boats hiding among civilian vessels, in a fight in which Iran is willing to lose dozens of them a day to keep the Strait closed. This is not a mopping-up operation; rather, it is a war of attrition that the US is not structured to win quickly, and one in which Iran can replace its losses in ways a conventional navy cannot. For the US, it鈥檚 like trying to empty a bathtub while the spigot is still running.

Further, the math of the Strait itself is unforgiving. Iran had an estimated 5,000 sea mines before the war and has begun laying them. The US Navy decommissioned its last Gulf-based minesweepers in 2025 鈥� timing that, in hindsight, looks catastrophic.

Indeed, the US can sink every major Iranian warship afloat and still not reopen the waterway. That, in fact, is roughly what has happened.

鈥nd the off-ramps are blocked

If conventional military victory hasn’t solved the problem, there are three other ways this war ends quickly. As of late March, however, all three are jammed.

1. The regime isn’t collapsing

A US intelligence assessment completed before the war concluded that military action was unlikely to produce regime change even if Iran’s leadership was killed. That assessment has proven accurate. Iran鈥檚 constitutional succession mechanism activated as designed, and a new Supreme Leader, the previous one鈥檚 more hardline son, was installed within days. Also, protests are not sweeping the streets. Ideological regimes under external threat tend to harden, not fracture. Indeed, both the Taliban and Hamas have survived worse. The Iranian Islamic Republic, whatever else you want to say about it, appears to be surviving this conflict as well.

2. Diplomacy has nowhere to go

Iran rejected the 15-point plan offered by the US and published five counterdemands, including recognition of Iranian sovereignty over the Strait of Hormuz, which is a nonstarter for the US. Iran’s foreign minister says Tehran has no intention of negotiating, even as President Donald J. Trump insists talks are continuing. These positions aren’t close to overlapping, and both sides are staking their credibility on not budging first.

And Iran has good reason to believe time is on its side. The war is deeply unpopular in the US and the same affordability anxiety that swept Republicans into power is now threatening to sweep them out in the midterms. Tehran knows for every day the war goes on, they get to roll the dice that Trump will back out, giving them a strong incentive to get as many rolls as they can.

3. The military posture is escalating, not resolving

Ground troops, including paratroopers from the 82nd Airborne, are en route to the Gulf or have received deployment orders. Reports indicate the White House is weighing a seizure of Kharg Island, Iran’s primary oil terminal, an operation that would put American boots on Iranian soil for the first time. Seven allied nations signed a statement supporting Strait security, but it鈥檚 a paperwork alliance, lacking the kind of committed hardware needed to force a solution to the Strait鈥檚 closure.

What does this mean for business?

The Iranian regime isn’t folding, diplomacy doesn鈥檛 seem to be catching on, and the US military posture is expanding. None of the conditions point to a rapid resolution, and in fact, several of them point to a prolonged conflict.

If this war is measured in quarters rather than weeks, the economic consequences stop being a temporary, albeit painful price spike and start being a structural disruptive event, one that reshapes supply chains, reprices risk, and forces companies to make hard choices about where and how they operate. The difference between a three-week war and a three-quarter war is not a difference of magnitude, it is a difference in kind.

In the concluding part of this series, we’ll walk through what a quarter-by-quarter economic scenario would look like if the war continues.

Key takeaways:

• • • The supply hit is real, not just priced-in fear 鈥� Tanker insurance has collapsed, infrastructure is damaged, and volumes are physically offline. Some of this isn’t coming back quickly.

    • Tax policy is moving in five directions at once 鈥� Energy security incentives, BEPS 2.0 rollout, windfall tax rumblings 鈥� governments are improvising, and your effective tax rate is caught in the middle.

    • Your Evidence to Recommendations (EtR) guidance is probably already stale 鈥� If you haven’t stress-tested your EtR guidance against $100-plus per barrel oil and a multi-quarter disruption, you’re behind.

Let’s be direct: This isn’t a risky premium situation. When military strikes take out Middle Eastern infrastructure in the Persian Gulf and tanker insurers pull out of a corridor carrying 15% to 20% of global crude and liquefied natural gas (LNG), supply goes offline. That’s what’s happened.

At the time of writing, the price of oil continues to fluctuate. The recent release of the , which forecasts and analyze the global oil market, shows that more global markets are starting to say the word recession. And whether or not a recession actually materializes, the energy price environment has shifted in ways that will take multiple quarters, and maybe years, to unwind. For corporate tax departments, the question isn’t whether this changes their planning, it’s whether they’ve caught up yet.

Which scenario-modeling is most worth it?

Most ominously, nobody knows how this all ends, and that’s exactly why your tax team may need more than one base case.

The optimistic read is a short, sharp shock 鈥� prices spike, some flows resume, upstream books a windfall quarter, and consuming-country governments start muttering about excess profits taxes. Messy, but manageable.

The harder scenario is prolonged disruption: Hormuz remains constrained for months, along with repeated infrastructure hits with resulting rerouting that permanently shifts where profits land and which entities suddenly have a taxable presence for which they didn’t plan. Not surprisingly, transfer pricing and permanent听establishment听(PE) exposure get complicated fast.

Add to the mix, by the Organisation for Economic Co-operation and Development (OECD) that multinational corporate tax departments are still required to adhere to and now plan for how it may interact and intersect with the other two scenarios.

The policy environment is a mess, but in a very specific way

Here’s what makes this cycle different from 2008 or 2014: Governments are pulling in opposite directions simultaneously. The United States has pivoted hard toward energy dominance 鈥� domestic fossils, nuclear, extraction incentives. Meanwhile, BEPS 2.0 is still rolling out unevenly across jurisdictions, which means your organization鈥檚 effective tax rate in any given country depends heavily on where it sits in the implementation timeline.

Throw in 鈥� which historically shows up about six months after prices stay high and voters get angry 鈥� and you have an environment in which the gap between your statutory tax rate and your actual sustainable rate could widen fast if you’re not actively managing it.

5 actions tax team leaders can take now

Of course, none of these are new concepts; but in a fast-moving situation, the basics that get done quickly will beat the sophisticated that gets done late.

First, rebuild your EtR guidance around at least three commodity paths. Not as a theoretical exercise 鈥� as something your CFO can actually present to the board with a straight face.

Second, map out which legal entities are genuinely exposed to Hormuz-dependent flow volumes. Companies鈥� operations and trading teams often know this; but the tax team too often doesn’t until there’s a problem. Close that knowledge gap now.

Third, re-rank your project pipeline on a real after-tax basis. Updated incentive assumptions, global minimum tax, domestic versus cross-border production 鈥� run all the numbers again. Some projects that looked marginal six months ago may look very different now, and vice versa.

Fourth, build a windfall tax playbook before you need one. The data you’d need to defend your profit levels and capital allocation decisions takes time to pull together. Don’t leave that work until the week the legislation drops.

Fifth 鈥� and this is the one that gets skipped most often 鈥� make sure the company鈥檚 tax, treasury, and trading groups are talking to each other in real time. Hedging decisions, financing structures, physical flow changes 鈥� all of these have tax consequences, and they’re happening fast right now.

One final thought

Corporate tax departments that come out of this looking good won’t be the ones that predicted the conflict. They’ll be the ones who translated what鈥檚 happened into specific, actionable data and numbers for their leadership 鈥� presented quickly, clearly, and with their own company’s footprint in mind.

That’s the brief. Now go build it.

You can find more of our coverage of the impact of the ongoing War in Iran here

Key takeaways:

• • • Companies should act fast on refunds 鈥� Companies that paid IEEPA-based duties have potential refund claims, but statutory deadlines are ticking. Business leaders should map exposure, quantify opportunities, and file protective claims now.

    • Remember, other tariffs still apply 鈥� This decision only invalidated IEEPA-based tariffs. Tariffs based on Sections 232, 301, and 122 of the 1974 Trade Act听remain in force, and the administration is already signaling plans for new global tariffs.

    • Businesses should update their financial models 鈥� Tariff refunds flow through cost of goods sold, which affects taxable income and effective tax rates. Business leaders should review their transfer pricing models and contracts to determine which parties receive refund proceeds.

The U.S. Supreme Court’s recent ruling striking down the tariffs that the Trump Administration based on the International Emergency Economic Powers Act (IEEPA) creates immediate refund opportunities for businesses that paid billions of dollars in now-invalidated duties. However, the administration’s pivot to alternative tariff authorities means the trade policy landscape is shifting rather than settling.

Now, corporate tax and trade leaders must move quickly to preserve refund claims while building resilient strategies for the next wave of tariff changes that are already fully in motion.

What actually happened

In , the Supreme Court said last month that President Donald J. Trump went too far by using the IEEPA 鈥� a statute designed for genuine national emergencies 鈥� to impose broad, peacetime tariffs. The Court’s message was blunt: If you want sweeping tariff authority, get the U.S. Congress to give it to you explicitly 鈥� IEEPA doesn’t cut it.

This ruling invalidated the tariffs that relied solely on IEEPA, including certain reciprocal global duties and some measures targeting Canada, Mexico, and China. However, here’s the catch: Other tariff regimes 鈥� such as those outlined in Sections 232, 301, and 122 of the Trade听Act听of听1974听鈥� are still standing. Those weren’t touched by this decision, and they’re not going away.

Check out听听for more on the Supreme Court鈥檚 tariff decision here

Further, the administration isn’t sitting still either. There’s already talk of pivoting to Section 122 to impose a new 10% global tariff. So, while one door closed, another may be opening, which means the legal landscape is shifting, not settling.

Why this matters right now

There are several important factors to consider in the wake of this decision, including:

Start with the money 鈥� If your company paid IEEPA-based duties, your effective tariff rate on many imports just dropped. That , changes your margin picture, and could shift pricing dynamics across the retail, consumer goods, manufacturing, and automotive sectors.

Then there’s the refund potential 鈥� Billions of dollars were collected under tariffs that are now unlawful. The government won’t write checks automatically 鈥� indeed, the administration has already signaled it will fight broad refund claims 鈥� but for individual companies, the cash at stake could be significant.

Don’t overlook your contracts 鈥� Many commercial agreements include tariff pass-through clauses, price adjustments, and indemnities. Those provisions will determine which parties actually gets the money: the importer of record, the customer, or someone else in the chain. If you restructured your supply chain around the old tariff regime, you may need to rethink those decisions, too.

What businesses should do first

There are several steps business leaders should undertake to move forward in this new environment, including:

Map your exposure 鈥� Tax and trade teams need to pull multi-year import data by Harmonized Tariff Schedule (HTS) code, country of origin, and legal authority. Figure out which entries were hit specifically by IEEPA-based tariffs, as opposed to Section 232 or 301 duties, which again, are still in effect.

Quantify the opportunity 鈥� Calculate total IEEPA duties paid by entity, jurisdiction, and period. Include a rough estimate of interest, prioritize the highest-value lanes, and flag any statutory deadlines for protests or post-summary corrections. Missing a deadline isn’t something you can easily fix later.

Preserve your rights 鈥� If you’ve already filed test cases or joined class actions, revisit your strategy with counsel. If you haven’t, evaluate quickly whether to file protests, post-summary corrections, or other protective claims with the U.S. Customs & Border Protection. These procedures will evolve, of course, but the clock already is ticking.

Get the right people in the room 鈥� This isn’t just a tax problem or a trade compliance problem. Stand up a cross-functional working group that includes tax, customs, legal, finance, supply chain, and investor relations. Agree on who owns what, how you’ll share data, and how you’ll communicate, especially if the refund could move the needle on earnings or liquidity.

Financial reporting and tax implications

Most importantly, you need to reassess your tariff-related balances and disclosures. If refunds are probable and you can estimate them, that may affect liabilities, expense recognition, and reserves. Even if the accounting is murky, material claims may need to be discussed in your report鈥檚 Management鈥檚 Discussion & Analysis (MD&A) section or in footnotes.

On the tax side, tariff refunds and lower ongoing duties flow through cost of goods sold (COGS), which changes taxable income and your business鈥檚 effective tax rate. Timing matters: When you recognize a refund for book purposes may not match when it hits for tax, creating temporary differences that need Accounting Standards Codification 740 analysis.

And don’t forget transfer pricing. Many intercompany pricing models were built during the high-tariff period and may embed those costs in tested party margins. If tariffs fall or refunds materialize, those models and the supporting documentation may need updates. Review intercompany agreements that allocate customs and tariff costs to make sure they align with both the economics and the legal entitlement to possible refunds.

Think beyond the refund

Yes, the immediate focus is on getting your company鈥檚 money back and staying compliant 鈥� but this is also a moment in which more strategic thinking is required, including:

Run scenarios 鈥� Business show run their models to see what happens if IEEPA tariffs disappear and aren’t fully replaced. Model what happens if a broad 10% global tariff lands under Section 122. Model what happens if country- or sector-specific measures expand. For each scenario, stress-test your gross margin, cash flow, and key supply chain nodes.

Revisit your sourcing strategy 鈥� Some nearshoring or supplier diversification moves you made under the old tariff structure may no longer make sense. Others may still be smart as a hedge against renewed trade tensions. The tax team needs to be part of these conversations 鈥� not just because tariffs affect cost, but because new structures reshape your effective global tax rate, foreign tax credit position, and your base erosion and profit shifting (BEPS) exposure.

Fix your data and governance 鈥� Trade policies can move fast and unpredictably. If you can’t quickly pull clean import data, run classification reviews, or model your exposure across scenarios, then you’re simply flying blind. Now is a good time to fix that.

The bottom line

The Supreme Court’s decision closed one chapter of the president鈥檚 tariff story, but it didn鈥檛 end it. For corporate tax and trade leaders, the message is straightforward: Grab the refund opportunity, protect your position, and use this moment to build a more resilient strategy for whatever comes next.

Because if there’s one thing we’ve learned, it’s that the next round of tariff changes is already on its way.

For more on the impact of tariffs on global trade, you can download a full copy of the 成人VR视频 Institute鈥檚 recent 2026 Global Trade Report听here

Key insights:

• • • Different tools, different impacts鈥� Tariffs raise costs but allow business to continue; sanctions create legal barriers that can make transactions impossible, with severe penalties for violations.

    • Scale brings scrutiny鈥� Expansive US sanctions risk diminishing returns as targets develop workarounds and alternative financial systems.

    • Strategic or reactive use?鈥� The core challenge isn’t whether sanctions work, but whether they’re deployed as part of coherent strategy or simply as visible action that avoids harder diplomatic or military choices.

In the foreign policy arsenal of the United States, economic sanctions have become a widely used weapon. As their use expands, so does the debate about how effective they actually are, what additional risks they create, and what unintended consequences they may bring.

Tariffs vs. sanctions: What’s the difference?

In wartime or during high-tension economic crises, both tariffs and sanctions can significantly impact businesses, but the two methods work in different ways.

Tariffs are a form of economic pressure. Governments use them to reduce an adversary’s export revenue, raise the cost of critical imports, signal disapproval of countries that continue doing business with the target, and generate funds for their own efforts. For companies, tariffs usually create friction rather than a full stop. Businesses can often continue importing, but at a higher landed cost. And that can compress margins and force decisions around topics such as renegotiating pricing, passing costs to customers, or shifting to lower-tariff suppliers.

Sanctions are closer to an economic blockade. They aim to isolate the target by banning broad categories of trade, restricting strategic sectors, blacklisting specific entities and individuals, and sometimes pressuring third parties through secondary sanctions. The business impact is often binary. For example, if a counterparty or its majority owner is sanctioned, trading partners generally cannot make the deal work by paying more. The transaction becomes illegal, and violations can trigger severe penalties.

How the difference shows up in operations

Consider a European manufacturing company in March 2022 that is trying to manage the crisis situation caused by Russia鈥檚 invasion of Ukraine.

If policymakers respond to the crisis with tariffs, such as a steep duty on Russian aluminum and timber, the primary challenge for this manufacturer is financial and operational planning. Costs rise, and then the company must decide whether to absorb the increase, reprice contracts, or switch suppliers, even if alternatives are more expensive.

Check out for more on the Supreme Court鈥檚 tariff decision here

If policymakers respond with sanctions, however, the situation can escalate quickly. Restrictions on major banks and key import categories, combined with aggressive designations of targeted companies and individuals can disrupt the entire supply chain. Payments can freeze, and goods can be delayed or seized. Even indirect connections to the sanctioned party can create problems, including for banks, shippers, insurers, and in some cases for logistics providers or warehouse owners. Indeed, what looked like a routine transaction can become non-compliant without warning.

The scale of sanctions use

Over the past several decades, the US has increasingly relied on economic sanctions as a core foreign-policy tool. In fact, by the early 2020s, US sanctions programs were targeting more than 30 countries and thousands of individuals and entities, with the sanctions primarily being administered by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). That trend has not only continued but accelerated under the current administration, which has turned to sanctions more frequently amid a volatile political environment. As the use of sanctions has expanded on a massive scale, their breadth and effectiveness have come under growing scrutiny.

Indeed, the phrase economic warfare reflects how modern sanctions often operate.

Many sanctions now target entire sectors, not only military goods. Secondary sanctions can threaten foreign companies that do business with sanctioned parties, effectively using access to the US financial system and the dollar as leverage. Critics argue that sanctions can also cause harm to civilians through inflation, shortages of essential goods including medicine, and broader economic damage. While targeted sanctions are intended to focus on elites, broader measures can affect entire populations.

What makes sanctions risky

The overuse of sanctions can create several problems. Yet sanctions can be politically attractive because they offer visible action without direct military risk, which may increase the temptation to use them even when they are unlikely to work.

As sanctions become routine, however, their impact may weaken as countries and companies develop workarounds, find alternative payment channels, and establish sanctions-resistant trade networks. Broad pressure from US sanctions can also encourage efforts to reduce reliance on the dollar-based financial system. China, Russia, and others have invested in alternative payment mechanisms such as cross-border interbank payment systems (CIPS) and systems for transfer of financial messages (SPFS) and expanded the use of non-dollar currencies. Over time, this response can reduce US financial leverage.

Sanctions can also provoke retaliation, including cyber activity, support for US adversaries, or wider regional instability. Sanctions also may harden diplomatic positions and make negotiation more difficult. In some cases, shared sanctions pressure can push sanctioned states closer together, strengthening the very coalitions that the US is trying to disrupt.

The argument for a middle ground

Supporters of sanctions argue that they provide an option between doing nothing and using military force. They can impose real costs on harmful actors, signal resolve, and respond to domestic demands for action, while still preserving diplomatic channels and avoiding full-on armed conflict.

The central question, however, is whether sanctions are being used as a substitute for strategy rather than as a single tool within a broader strategy. As sanctions continue to expand, it is worth weighing their benefits against their limits and long-term consequences. For policymakers and businesses alike, understanding these dynamics is critical to making informed decisions and managing risk.

You can find out more about here