When Tariffs Hit Innovation:
New IP Risks and Opportunities

September 4, 2025

Tariffs are often discussed in terms of supply chains, pricing, and global trade politics—but their impact doesn’t stop there. For companies that depend on intellectual property to protect their innovations, tariffs are reshaping the environment in which IP is created, protected, and enforced. From where patents are filed, to how trade secrets are safeguarded, to which forums are used for enforcement, tariffs are influencing strategy in ways that present both challenges and opportunities. Whether you’re in automotive, consumer electronics, medical devices, or pharmaceuticals, the convergence of trade policy and IP strategy is becoming too important to overlook.

Reshoring and Rising Patent Exposure

One immediate effect of tariffs has been a wave of reshoring, as companies aim to manage import costs and regain supply chain control. However, recent developments suggest that many large-scale relocation projects remain uncertain, contingent on the stability and longevity of tariff policies. Companies seem to be waiting for clearer and more sustained trade direction from Washington before making major investments.

This uncertainty creates a tricky IP dynamic: while bringing operations back to the U.S. means increased exposure under domestic patent law, it also introduces risk when innovations and activities previously carried out offshore now fall squarely within U.S. jurisdiction. At the same time, uneven execution—such as projects built on conditional assumptions about tariff permanence—can lead to misaligned IP strategies or overexposure in litigation-prone contexts.

The result is a patent environment that is not only more active, but also more volatile. Businesses considering reshoring should treat IP implications cautiously, aligning decisions with both evolving trade signals and a tempered outlook on reshoring momentum.

Industry Examples: How Tariffs and IP Intersect

Automotive

As tariffs reshape global supply chains for electric vehicles, companies are rethinking how and where they produce batteries and components. These shifts heighten the need for strong U.S. patent coverage in areas like battery chemistry and charging systems, while also exposing automakers to infringement risks from competitors with existing domestic portfolios.

Consumer Electronics

For electronics companies, the move toward domestic production of smartphones, laptops, and connected devices can create pressure to enter new supplier relationships quickly. Without well-structured agreements, valuable designs, firmware, and testing processes may be left vulnerable. Here, IP strategy is as much about protecting trade secrets and contracts as it is about patents.

Medical Devices

Medical device makers face a similar recalibration. Many rely on specialized components manufactured abroad, from surgical tools to imaging technologies. When tariffs increase the cost of imports, some manufacturers shift assembly or production to the U.S. Patent disputes that once arose overseas may now appear in U.S. courts. At the same time, the International Trade Commission (ITC) has become a more prominent venue for enforcement. Section 337 investigations allow patent owners to seek exclusion of infringing imports—an important tool for companies navigating costlier import dynamics.

Pharmaceuticals

Pharmaceutical companies often manufacture locally but still depend on imported active pharmaceutical ingredients (APIs). Tariffs on APIs can raise costs and influence where manufacturing takes place. Innovators holding patents on APIs or formulations may rely more heavily on ITC actions to manage infringing imports, while generics challenging those patents must account for both trade and IP considerations in their strategies.

Portfolio Strategy in a Tariff-Driven Economy

Tariff policy is also changing how companies think about building and maintaining patent portfolios. Businesses that are reshoring may need to emphasize U.S. filings to protect newly localized innovations. At the same time, portfolios in some foreign jurisdictions may become less strategically important if tariff costs reduce the viability of those markets.

For smaller and mid-sized companies, these pressures can be especially acute. Limited margins may lead to increased reliance on licensing, patent enforcement, or asset sales to create financial flexibility. Litigation funding is also gaining traction as a way to pursue enforcement when resources are tight.

What’s Next for Businesses

Whatever one’s view of tariff policy, its effects on intellectual property are real and ongoing. Tariffs introduce risks, such as greater exposure to U.S. patent litigation, tighter timelines for supplier transitions that test trade secret protections, and higher costs tied to imported components. They also create conditions that can shift enforcement dynamics, portfolio priorities, and licensing strategies.

For companies across industries, the practical response is to integrate trade considerations into IP planning. That means auditing patent portfolios with reshoring in mind, reviewing supplier agreements for stronger IP protections, and evaluating whether enforcement tools like ITC exclusion orders are appropriate in light of evolving supply chains. By aligning IP strategy with trade realities, businesses can be better prepared to manage the challenges and respond to the opportunities created by tariffs, no matter how the broader policy debate unfolds.