Jonathan Barrett (pictured, below), CEO, Kallikor, provided this comment:

“The challenge is that these plans often rely on assumed responses rather than tested outcomes. In practice, it can be difficult for organisations to see how different decisions – rerouting shipments, adjusting sourcing, reallocating inventory or changing service commitments – will actually behave across the entire supply chain once disruption begins.

“We’ve seen this before through the Suez Canal obstruction in 2021 and the Red Sea shipping disruption in 2023–2024, when pressure in one part of the global trading system forced companies to make rapid operational choices with limited visibility into the wider consequences.

“Many companies we work with have an answer on paper for how they would respond to disruptions like these. The ones with most confidence in that answer have already tested it — running scenarios to see how those decisions will actually behave across the supply chain before disruption forces the choice.

“The organisations navigating disruption best are rarely the ones reacting fastest. They are the ones that have already explored the scenarios and understand how their supply chain will behave before disruption forces the decision.”

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Andrei Danescu, CEO of UK-based warehouse logistics firm Dexory, discusses how the threats to impose tariffs play out in the real economy. He works closely with global manufacturers and logistics operators and hears, in practical terms, how political flashpoints translate into warehouse disruption and why robotics and real-time data are becoming essential as volatility increases.

“Just the threat of tariffs is distorting global supply chains. US-bound imports are slowing as companies pause orders, stockpile critical components and rush deliveries, triggering customs delay and warehouses filling with the wrong stock, in the wrong place, at the wrong time.

“This is the commercial reality behind renewed tariff threats against the UK and EU and the broader use of economic and territorial pressure. The message to business is clear: geopolitics now overrides efficiency!
“For UK manufacturers and retailers, especially in automotive and consumer goods, the impact is immediate. Predictable delivery rhythms will break, forcing many to over-order or risk stoppages. ‘Just in time’ becomes ‘just in case’, tying up cash and warehouse space.

“The lesson is simple: tariffs destabilise supply chains and, in an economy already running hot, uncertainty is its own tax. All organisations can do now is prioritise warehouse visibility to inform decision making.”

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Steffen Schulze Selting, Vice President, Value Engineering at Sphera, told us, “tariffs are being used more frequently as a tool within global trade, and supply chains are where the consequences are most immediately felt. For businesses operating across Europe and the UK, the challenge is not simply the headline tariff rate, but the complexity that sits beneath it.”

Trade policy issues

“Highly integrated supply chains mean that materials often cross multiple borders before final assembly. When tariffs are applied based on country of origin, many organisations struggle to determine where exposure truly sits, particularly beyond Tier 1 suppliers, where direct commercial relationships end, and reliable origin data becomes harder to obtain. That uncertainty makes it difficult to assess risk at pace.

“The backdrop to this is a shifting global trade map. Climate-driven changes in the Arctic are opening up new potential shipping routes via Greenland, shortening transit times between Europe and Asia. Control and access to these routes will carry long-term implications for global supply chains well beyond the immediate geopolitical debate.

“If the current tariff threat results in escalation, it would add pressure to supply networks that are already managing climate risk. Understanding where goods originate and which products or regions are most exposed is critical to assessing cost exposure and operational impact when trade conditions shift.”

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Set against a backdrop of geopolitical fragmentation, the chaos and mafioso behaviour of the Trump administration, accelerating technological change and mounting resource constraints, the new report – Global Value Chains Outlook 2026: Orchestrating Corporate and National Agility – developed in collaboration with Kearney, examines how companies and governments can remain competitive as disruption becomes a permanent feature rather than a cyclical shock.

“Volatility is no longer a temporary disruption; it is a structural condition leaders must plan for,” said Kiva Allgood, Managing Director, World Economic Forum. “Competitive advantage now comes from foresight, optionality and ecosystem coordination. Companies and countries that build these capabilities together will be best positioned to attract investment, secure supply and sustain growth in an increasingly fragmented global economy.”

The scale of the shift is already evident. In 2025 alone, tariff escalations between major economies reshuffled more than $400 billion in global trade flows, while disruptions across major shipping routes pushed container shipping costs up 40% year on year, signalling a decisive move away from short-term shocks towards enduring uncertainty. At the same time, manufacturing output across advanced economies is growing at its weakest pace since 2009, while more than 3,000 new trade and industrial policy measures were introduced globally in 2025 alone – more than three times the annual level recorded a decade ago. Together, these forces underscore why supply chain resilience has become a central determinant of national competitiveness and corporate strategy.

A central feature of the report is the launch of a new digital tool that translates these insights into actionable intelligence. Drawing on leading global indices, the ‘Navigator’ supports strategic decision-making on industrial policy and manufacturing footprint design. Governments can use it to diagnose competitiveness gaps and prioritize reforms, while companies can assess infrastructure readiness and ecosystem maturity when making location and investment decisions.

The report also highlights how targeted national approaches are already shaping manufacturing competitiveness. In Ireland, enterprise-led upskilling through Skillnet Ireland links government, business and educators to deliver subsidized training aligned with industry needs. In China, large-scale investment in digital infrastructure under the New Infrastructure initiative has enabled real-time industrial connectivity through widespread 5G deployment. In Qatar, a national dashboard tracking essential food items in real time strengthens supply security by enabling early intervention, buffer stocks and rapid, data-driven responses to disruption.

“Supply chain disruption in 2026 will be constant and structural. Geopolitical fragmentation, shifting trade rules and labour shortages are all redefining how value is created and moved,” said Per Kristian Hong, Partner, Kearney. “For supply leaders, the priority is no longer forecasting disruption, but redesigning operating models to function under permanent uncertainty. That means moving away from efficiency-driven supply chains and towards adaptive networks that can be reconfigured with optionality as conditions change.”

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The move could hit major pharmaceutical exporters from the UK, Ireland, Germany, Switzerland, and Japan. The UK alone shipped more than $6 billion (£4.5bn) worth of pharmaceutical products to the US last year, according to the UN.

Wall Street and European markets have already felt the strain. Jane Sydenham, investment director at Rathbones, described the sector as being on a “rollercoaster ride” amid tariff speculation, while Neil Shearing, chief economist at Capital Economics, suggested the real impact could be muted given exemptions and the industry’s US production footprint.

Trump also announced a 25% import tax on heavy-duty trucks, citing the need to protect American manufacturers such as Peterbilt and Mack Trucks from “unfair outside competition.” Industry groups, however, warn that many truck parts come from allies like Mexico, Canada, and Germany, making it “impractical” to fully localize production without raising costs.

In addition, kitchen and bathroom cabinets will face a 50% duty, while upholstered furniture will be hit with a 30% tariff starting next week. Trump argued the measures are necessary to counter the “flooding” of imports that he claims undermine US producers.

Mark McCarthy, Chief Revenue Officer at Basware, commented: 

“Trade wars and tariff uncertainty introduce volatility into the global economy. For major enterprises, especially those with complex supply chains or international footprints, this creates hesitation around IT spending. CIOs and CFOs may want to delay large IT investments, reassess strategic priorities and scrutinize every dollar of spend.

Organizations are working on contingencies, but in a turbulent environment, smart enterprises don’t stop investing, they get more focused on their spending and look for greater ROI on every purchase. This means looking to drive even more cost efficiency, investing in areas to mitigate operational risk, accelerating automation to do more with less, and increasing agility and visibility over the tech stack.

Supply chains are not nimble as we saw during the pandemic, so CIOs and CFOs will also be considering suppliers that have the skills to handle the complex tax and tariff landscape. Combining technology solutions with tax compliance and skills will be vital in the near future as these tariffs come into effect.

Michael Joseph, Compliance Expert at Napier AI, commented: 

“Tariffs create a breeding ground for financial crime. Fluctuating tariffs, while designed to serve economic and national security objectives, have created unintended consequences. As supply chains reorganize in response, new vulnerabilities for money laundering and other financial crimes have emerged. Our research shows that money laundering and terrorist financing cost the US economy over $600 billion per year on average.”

“For compliance professionals navigating today’s increasingly complex environment, adapting financial crime risk mitigation strategies is critical. Incorporating tariff policy changes into targeted risk assessments helps identify vulnerabilities tied to high-tariff jurisdictions and to commodities susceptible to misrepresentation. It also enables compliance teams to anticipate how recent tariff shifts might alter behaviour and trading patterns. The coming years will require increased vigilance, technological innovation, and cross-border collaboration to address these emerging threats. For compliance professionals, this environment represents not just a challenge but an opportunity to demonstrate the critical value of financial crime prevention in an increasingly complex global economy.”

The tariffs mark an escalation of the president’s protectionist trade strategy, following sweeping duties on more than 90 countries introduced in August and earlier levies on steel, aluminium, copper, and vehicle components.

Earlier this year, the US Chamber of Commerce urged the White House not to impose new tariffs, noting that many parts used in truck production are sourced “overwhelmingly” from countries like Mexico, Canada, Germany, Finland and Japan.

The organisation stressed that these nations are “allies or close partners of the United States posing no threat to US national security,” and highlighted that Mexico and Canada alone accounted for more than half of US imports of medium and heavy-duty truck parts last year. It warned that it was “impractical” to expect many of these parts to be sourced domestically, which would drive up costs for the industry.

The new tariffs favour domestic producers but are “terrible” for consumers as prices are likely to rise, said trade expert Deborah Elms from research firm Hinrich Foundation.

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Chris Clowes, executive director at global supply chain and logistics consultancy, SCALA, commented:

“The announcement of the US’s incoming trade tariffs on Canadian, Mexican, and Chinese goods, coupled with Trump’s ongoing rhetoric around trading with the EU, is bold. Waging a trade war with four of its biggest trading partners could have negative ramifications for the US. Nearshoring manufacturing to the US will be hard to justify for some companies, given the higher cost base and the expertise and sheer scale of operations that overseas manufacturing has previously provided. And with business challenges come consumer impacts. Rising costs would likely lead to cost-push inflation – meaning the consumer pays more for the goods and services they seek – and dampened purchasing power. For the rest of the world, however, we could see the likes of China, the EU, Canada, and Mexico form a trade alliance. We could also see potential trading opportunities for places like the UK open as countries look for new places to import.”

US Tariffs on China Ignite Trade War Tensions: What’s Next for Global Logistics?

As of Tuesday, China has been hit by an increased import charge of 10% for any item entering the US. Because of this, they’ve now vowed to retaliate after 10% tariffs were placed on Chinese imports into the US earlier today. And, with the EU, Canada, and Mexico also set to have tariffs imposed on them in the coming weeks, the question on everyone’s lips is: What is next for global logistics businesses?

What are tariffs?

In simple terms, tariffs are taxes on goods imported from other countries. The majority of tariffs are set as a percentage of the value of the goods, which the importer generally pays. So, for example, if a product imported to the US from China (after the 10% tariff imposed today) is worth 5 dollars, it would face an additional 0.50 cent charge applied to it. By increasing the price of imported goods, the US hopes to encourage consumers to buy cheaper domestic products instead, to help boost their own economy’s growth by growing the US economy, protecting jobs, and raising tax revenue.

What does this mean for the logistics industry?

Jackson Wood, Director of Industry Strategy, Global Trade Intelligence at Descartes, states, “Since the beginning of the COVID-19 pandemic, companies conducting global trade have been dealing with an increasingly volatile and uncertain environment. From product shortages, congested shipping lanes and military conflicts to political upheaval and environmental disasters, supply chains have been tested to the limit for the past five years.”

Wood continued, “What has remained constant through these disruptions is the imperative to build resiliency and responsiveness into global supply chains. This includes diversifying supplier/customer relationships, identifying alternative trade lanes, and potentially leveraging trade instruments (including Foreign Trade Zones and Free Trade Agreements) that can mitigate the risks posed by this volatility. These same concepts apply to the new paradigm of tariffs and protectionism — those companies that have prioritised resiliency and responsiveness in their global trade operations will be better positioned to thrive.” However, only time will tell until we see the true effects of the upcoming trade war on the horizon…

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Amid intensified geopolitical uncertainties and rising costs, analysis from Bain’s biennial operations survey of CEOs and chief operating officers shows a further rise in companies planning, or already investing in and executing, reshoring and near-shoring – as well as the emerging trend of “split-shoring,” where businesses balance a mix of offshore production with other key manufacturing activity close to home.

Bain’s findings show that the proportion of CEOs and COOs reporting their companies have plans to bring supply chains closer to market has risen to 81%, up by a sharp 18 percentage points from 63% in 2022. This comes alongside almost two-thirds (64%) of executives surveyed reporting investment in split-shoring (46%) or near-shoring (18%). Only 36% report further investment in offshoring, meanwhile. However, the findings also show reshoring efforts also have much further to run, with only 2% of companies reporting having fully completed their plans.

Bain’s operations survey gathered views from 166 CEOs and COOs, with 90% managing businesses with revenues in excess of $1 billion, more than half at companies with revenues above $5 billion, and two-fifths with $10 billion-plus revenues.

The acceleration of the reshoring trends underlines how heightened geopolitical turbulence and pressures for greater sustainability and reduced carbon footprints, alongside the post-pandemic goal to deliver greater resilience in supply chains, have disrupted the previous business rationale for low-cost offshore manufacturing hubs, tilting the balance towards operations closer to home markets.

Hernan Saenz, Bain & Company partner and global head of the firm’s Performance Improvement practice, commented: “We believe the current acceleration of reshoring across key markets worldwide is a crucial trend that demands CEOs’ attention. The multiple disruptions companies have grappled with since the pandemic mean the question for company leaders is no longer whether to reinvent supply chains but how to do that so their operations are made more cost-competitive, resilient, sustainable, and agile in responding to evolving markets and customer needs.”

China factors, US Inflation Reduction Act fuel trends

Bain’s analysis indicates that reshoring is also being reinforced by deglobalization trends, with apparent concerns over decoupling of economic blocs contributing to a rise of more than 25% in the proportion of companies seeking to reduce dependence on China. The proportion of companies reporting moves to shift operations out of China has risen to 69% in 2024, from 55% in 2022, the survey results show.

In the US, where 39% of respondent businesses are based, the findings also point to reshoring having been further stimulated by the 2022 Inflation Reduction Act (IRA). The IRA offers US companies subsidies and tax credits to incentivize reshoring and near-shoring to boost domestic manufacturing and job creation – particularly in sensitive markets, such as those for semiconductors, clean energy technologies such as solar panels and wind turbines, and electric vehicle supply chains.

Moves toward reshoring of semiconductor manufacturing have also been intensified by the US CHIPS Act, which put in place tax incentives and $52 billion in funding to stimulate US domestic production of chips – as well as surging AI-driven demand for graphics processing units (GPUs). Bain’s recent Global Technology Report forecasts that demand for key GPU components could increase by 30% or more by 2026, potentially triggering an AI-induced chip shortage.

Adam Borchert, Bain & Company partner in the firm’s Performance Improvement practice and global lead of its Supply Chain practice, said: “The powerful forces driving the patterns of re-shoring, near-shoring and split-shoring that our findings show will persist and confront company leaders with the challenge and opportunity of transforming their supply chains for reshaped global markets. We are helping clients to navigate these shifts and build supply chains that meet market needs, are resilient and future-proofed, while strengthening management capabilities to adapt to further change in an uncertain world of constant turbulence.”

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