Incoterms 2020 remain the governing rulebook for allocating risk and cost between buyer and seller, but 2026’s shifting US tariff landscape has raised the stakes on choosing the right term considerably.
The distinction between DDP (Delivered Duty Paid) and DAP (Delivered at Place) has always mattered, but this year it’s become a genuinely consequential decision rather than a routine contract detail. Under DDP, the seller absorbs duties and import costs; under DAP, that burden shifts to the buyer at destination. With tariff rates moving through 2026, a term chosen without accounting for where those costs will land can turn a well-priced deal into a losing one for whichever party is left holding the duty bill.
None of this changes the underlying Incoterms 2020 framework — the rules themselves haven’t been rewritten. What’s changed is the cost of getting the choice wrong. A shipment structured on the wrong term in a stable tariff environment might cost a few percentage points in margin; the same mistake against a moving tariff schedule can be substantially more expensive.
For any business shipping cross-border in the current environment, this is a good moment to revisit standard contract templates and confirm the Incoterm on file still makes sense against where tariffs currently sit — not just where they sat when the contract was first drafted.