TheCorporateCounsel.net

In yesterday’s blog. I highlighted the Trump Administration’s imposition of tariffs on Canada, Mexico and China, only to learn later in the day that the tariffs had been suspended for Canada and Mexico for a period of thirty days to facilitate negotiations. The 10% tariff on goods from China was not suspended, and as this Reuters article notes, China announced that it would impose tariffs of 15% on imports of U.S. coal and liquefied natural gas, and 10% on crude oil, farm equipment and some automobiles, beginning on February 10.

It is only fitting that, in this year in which we mark the 50th anniversary of the premier of Saturday Night Live, I have made two Emily Litella references within a span of three months. For the uninitiated, Emily Litella was a Saturday Night Live character played by the iconic Gilda Radner. The bit with Emily Litella was always the same, in that she would get spun up responding to a fictional editorial, and then the news anchor would point out the error underlying her response, and she would say “Nevermind!” It seems weird that this passed for comedy in the 1970s, but that was the magic of those first few seasons of Saturday Night Live. I was only eight years old when SNL premiered, but for some reason my parents would let me stay up late and watch the program and it certainly left a lasting impression on me!

The question inevitably arises now as to whether impacted public companies should take a different approach to their disclosures now that the immediate crisis of the tariffs on products from Mexico and Canada has been averted. In my opinion, it is still appropriate to analyze the potential impact of the tariffs and include appropriate risk factors and MD&A disclosure in upcoming filings, because there can be no assurance that the dispute will be resolved within the 30-day negotiating period. Further, the imposition of the tariffs is emblematic of a larger international trade policy of the Trump Administration that will clearly utilize trade wars to achieve policy objectives. So while I may say “nevermind!” with respect to the immediate threat, the longer term risks should still be accounted for in upcoming disclosures.

– Dave Lynn