Public works contractors across Washington and the U.S. are grappling with a costly and unresolved question: when the federal government imposes new import tariffs after a contract has been awarded, do those tariffs entitle contractors to additional compensation?

The answer depends on the contract and the public agency. Some public works contracts tie relief directly to whether tariffs are considered “taxes.” Others frame their adjustment clauses more broadly, focusing on changes in law or government-imposed costs. For contractors, the distinction is critical.