Tariff Volatility: Auditing Incoterms Gains Momentum as a Key Recommendation

In an opinion piece published by Automotive News, author Ganpati Goel argues that tariff volatility is here to stay, and companies must audit their trade terms (Incoterms) to manage risk. He highlights that control over customs events —such as filing declarations and paying duties— is more valuable than the convenience of using terms like DDP (Delivered Duty Paid), where the seller bears all costs and risks up to final delivery, including tariffs.

Incoterms 2020 define the obligations, costs, and risks between buyers and sellers in international trade. In environments marked by tariff uncertainty —such as trade wars, rate changes, or sanctions— selecting the right term determines who absorbs increases. For instance, DDP leaves the seller exposed to any unforeseen tariff hikes, while terms like EXW or FCA shift control to the buyer. The opinion piece emphasizes that, amid persistent volatility, operational efficiency must take a backseat to risk management.