Software Escrow: Your Shield in the Global Tariffs War

The global trade war just hit a boiling point. On April 2, 2025, the Trump administration imposed substantial tariffs on imports from multiple countries. Just days later, China fired back with its own 34% tariff on all US goods while the EU and Canada are preparing their countermeasures. These moves caused major market drops, with the Euro Stoxx 50 falling more than 7% and the Nasdaq entering bear market territory — down more than 22% from its December high. 

But while everyone's watching their stock portfolios, a hidden risk lurks behind the headlines. Your business software could become a casualty of this economic showdown. Think about it. Your company relies on software vendors who themselves depend on global supply chains now under severe strain.

What happens if your critical software provider can't deliver updates? Or worse, goes under entirely? In this post, we discuss how software escrow provides a practical solution to protect your operations during these uncertain times.

» Ease the pressure with these software resilience solutions 

How the global trade war affects software vendors

What makes these "Trump tariffs" particularly disruptive for the software industry is their comprehensive nature — they impact not just finished goods but also components, rare earth minerals, and even services through secondary effects.

You don't have to picture this because it's likely already happening: Your manufacturing operations rely on specialized inventory management software from a mid-sized developer with international offices. One Monday morning, you discover they've shut down operations due to financial strain from cross-border restrictions. Your system needs critical updates, but there's no one to call.

This nightmare scenario is becoming increasingly likely as:

• Tariffs push vendors into financial distress (companies are already postponing IPOs, and stock markets worldwide are bleeding)
• Export controls block software updates (several countries have added entities to export control lists)
• Supply chain disruptions impact companies that provide both hardware and software
• Developers lose access to key talent pools across multiple borders

» Find out how to navigate the risks involved in third-party dependencies

Why Trump tariffs pose significant risks to cloud solutions

Now, you might think your business is insulated from trade war effects because you use cloud-based SaaS solutions rather than on-premise software. However, the reality is more complex. Even cloud providers depend on global supply chains that are increasingly fragmented by tariffs and trade restrictions.

Consider these often-overlooked connections that make your cloud software vulnerable to trade disruptions:

• Data center hardware: Cloud providers rely on servers, networking equipment, and storage systems sourced globally.
• Specialized chips: Many AI and machine learning capabilities require advanced semiconductors affected by export controls.
• Development teams: Most major cloud platforms maintain development teams across multiple countries.
• Third-party integrations: Your SaaS applications likely connect with various services across different jurisdictions.

When tariffs disrupt these delicate connections, even seemingly standalone cloud solutions can experience service degradation, feature delays, or complete outages. Companies that assumed their software stack was immune to trade tensions have found themselves scrambling as previously reliable services become unstable.

US Commerce Secretary Howard Lutnick's recent statement that the administration wants to "reset global trade" signals these tariffs aren't merely negotiating tactics but potentially long-term structural changes. This makes preparation and protection even more crucial for businesses relying on software and SaaS systems.

Software Escrow: Your protection plan

Software escrow is your insurance policy against these global trade war risks. It works like this: a neutral third party holds your vendor's source code and all assets needed to maintain your critical software or applications. If specific trigger events occur, like your vendor going bankrupt, you get access to everything you need to keep your systems running.

Unlike traditional insurance that pays after damage occurs, escrow gives you the actual tools to prevent the damage in the first place. When the global trade war puts your software vendor at risk, an escrow agreement means:

• You get access to complete source code and other assets if your vendor fails
• You can maintain your own systems if updates are blocked
• You regain control if your vendor exits your market
• Your operations continue even as trade barriers rise

Think of it as business continuity in a vault, activated precisely when you need it most.

How escrow eliminates all trade war risks to software

Let's break down the specific ways escrow protects you during this escalating conflict:

• If tariffs bankrupt your vendor, you get immediate access to source code and can maintain critical systems while planning a migration.
• If export controls block updates, you can keep systems patched and secure regardless of restrictions.
• If your vendor exits your market, you retain full operational capability while finding a replacement.
• If supply chain disruptions impact integrated products, you can separate software dependencies and keep systems running.

The peace of mind alone is valuable. Plus, escrow can actually improve vendor relationships during uncertain times. By reducing risk for both parties, it creates a safer environment for ongoing business — even as trade tensions flare.

» Get an in-depth overview of Codekeeper's software escrow solutions

5 steps to protecting your business against trade war fallout

Many businesses are already seeing disruptions in their supply chains and technology services. To protect your software assets from these growing risks, you need a structured approach to implementing escrow protection.

Follow these five steps to secure your business operations against software interruptions related to the trade and tariffs conflict:

1. List critical software: Identify all applications essential to your operations.
2. Assess vendor exposure: Prioritize vendors with international connections or tariff-affected supply chains.
3. Approach vendors: Discuss escrow arrangements with an emphasis on mutual benefit.
4. Select a neutral escrow agent: Choose a provider with experience handling cross-border software assets.
5. Include trade war triggers: Ensure your agreement covers tariff-related scenarios.

Start with your most business-critical systems — those you absolutely can't operate without. Most companies can implement basic escrow protection within two to three weeks, with comprehensive coverage in four to six weeks. (Codekeeper can configure full-scale software resilience escrows in under 24 hours.)

Note: If you encounter resistance from your counterpart, remind them that escrow strengthens your relationship by demonstrating a commitment to business continuity — for both parties.

» Learn how to set up a software escrow agreement with Codekeeper

Activate your competitive advantage today

The global trade war won't resolve itself overnight. Retaliatory tariffs, export controls on critical materials, and economic sanctions signal a prolonged standoff. While your competitors scramble to react after their software providers fail, you can be prepared.

By implementing software escrow now, you're not just protecting your operations — you're creating a competitive edge. While others face disruption, your business continues uninterrupted, potentially capturing market share from less prepared competitors.

But the window to act is closing. Contact us today to set up your software escrow agreement and ensure your business remains operational regardless of how the trade war unfolds.