Tariffs and the New Wave of Securities Class Actions

Background: A Spike in Tariff-Related Filings

Few issues have reshaped the corporate disclosure landscape over the past year as quickly as tariffs. Since President Trump’s “Liberation Day” announcement of sweeping import duties on April 2, 2025, targeting major trading partners such as China, Mexico, and the EU, the administration’s tariff policy has shifted repeatedly and fluctuated country by country as leverage for bilateral negotiations. That volatility accelerated further in February 2026, when the Supreme Court rejected the President’s reliance on the International Emergency Economic Powers Act as the statutory basis for his tariff actions, in response to which the President re-announced a global 15% tariff under different statutory authority. Supply chains have become strained, consumer prices have climbed, and the plaintiff’s bar has taken notice. The result is a marked uptick in securities class actions premised on issuers’ allegedly downplaying tariff impacts on revenues. For example, in Purrington v. Lakeland Industries, Inc., No. 26-cv-1501 (S.D.N.Y. Feb. 23, 2026), Dkt. 1, plaintiffs targeted statements made by an industrial clothing manufacturer regarding its ability to withstand the impacts of U.S. tariffs.

However, securities plaintiffs are not limiting their focus to obviously tariff-exposed companies. Recent complaints span industries and reach issuers whose tariff exposure is indirect, such as social media companies, information technology firms, and used-car retailers. For public companies whose exposure to U.S. tariff policy is seemingly remote, this recent wave of cases highlights the importance of keeping in mind the potential downstream effects of tariffs when speaking to investors on the topic.

Cases Not Confined to Importers

Recent cases reach beyond traditional importers and extend to companies whose tariff exposure is downstream and not immediately intuitive. Uziel v. Pinterest, Inc., No. 26-cv-2745 (N.D. Cal. Mar. 30, 2026), Dkt. 1, is illustrative of the breadth of industries that could be swept up in this trend. Pinterest does not import goods; its tariff exposure flows from revenue generated by its advertising customers. Plaintiffs allege that Pinterest overstated its ability to manage the macroeconomic impact of U.S. tariffs on its advertising partners and the resultant impact on Pinterest’s ad revenues. Following a subsequent disclosure that Pinterest’s “largest retail advertisers created a more meaningful headwind than we expected as they sought to protect their margins … and pulled back on ad spend,” Pinterest’s stock fell and plaintiffs filed suit. This is a downstream-effects case: the company itself never paid a tariff, but its customers did, and that was enough to motivate plaintiffs to bring a securities fraud claim.

Schmidt v. Gartner, Inc., No. 26-cv-394 (D. Conn. Mar. 17, 2026), Dkt. 1, tells a similar story but in the consulting and research sector. Plaintiffs allege that Gartner’s clients, who had direct exposure to tariffs, experienced slowing decision cycles, which depressed Gartner’s contract value growth. Plaintiffs allege management nonetheless continued to falsely assure investors that the tariff-impacted “selling environment” was “starting to improve,” only for the company to miss earnings targets and disclose that 35-40% of Gartner’s contract value fell into “tariff-affected industries” and that performance there was “much worse than the non-tariff affected industries.”

Cap v. CarMax, Inc., No. 25-cv-3602 (D. Md. Nov. 3, 2025), Dkt. 1, targets a domestic used-car retailer, an industry not intuitively tariff-sensitive. There, plaintiffs allege that management attributed strong results to the company’s own business model rather than disclosing that performance was being driven by consumers’ anticipatory car purchases ahead of tariff-driven new-car price increases. Even in Purrington, where the company is a more conventional importer and manufacturer, the theory of liability was premised not only on alleged concealment of the true impact of tariffs on the business but also on alleged misrepresentation of the efficacy of the company’s tariff mitigation measures, which ultimately failed to insulate revenues.

Practical Guidance: Mind the Disclosures

The lesson for issuers and their counsel is straightforward but crucial: tariff disclosure risk is not the exclusive concern of importers and exporters. If tariffs touch your customers, your suppliers, or your end-consumer demand – even through several degrees of separation – securities plaintiffs are prepared to argue that your failure to say so with precision prior to a drop in your company’s stock price opens the door to a securities class action.

Several considerations should guide public companies’ disclosures. First, temper optimism with evidence. Statements that the company is “well positioned” to “weather tariff headwinds” or is benefiting from effective “mitigation measures” should be supportable by contemporaneous internal data and should be paired with clear acknowledgment of the magnitude and likelihood of adverse scenarios. Second, address downstream effects. Where a meaningful share of customers or target markets has tariff exposure, identify that exposure and quantify it where possible. Third, acknowledge policy uncertainty. With the Supreme Court having rejected one statutory basis for the administration’s tariffs and the President promptly vowing to revive them through other means, the legal foundation for U.S. tariff policy remains genuinely contested. Statements to investors should reflect that reality rather than paper over it. Finally, employ robust risk warnings and speak with caution. SEC filings and other public statements should treat tariff-related risks as a discrete and evolving category that is updated regularly to reflect current policy developments, supply chain realities, and known or reasonably likely impacts on operations. Well-developed, company-specific risk factors and disclosures remain among the most effective defenses against securities fraud claims.

The plaintiff’s securities bar is plainly chomping at the bit to punish companies that address tariffs with a resolute attitude but ultimately fail to prove themselves clairvoyant when tariff policy causes second-order impacts on revenues. Until the policy environment stabilizes, every earnings call, investor presentation, Q&A session, and SEC filing that discusses tariffs deserves disciplined scrutiny.