The Trump effect in 2025 – Global Sourcing & Supply Chains
Tariff policy remains one of the most anticipated and debated initiatives under the incoming Trump administration, with high stakes for the global economy, businesses, and consumers. Proposed tariff hikes range from 10% to 20% on most imports and up to 60% to 100% on Chinese goods, creating widespread uncertainty in global trade.
While the exact details of new tariffs and export controls are yet to be confirmed, companies must act now to mitigate risks and adapt their supply chain strategies. Businesses should proactively pursue inflation mitigation tactics, diversify sourcing, renegotiate contracts, and explore nearshoring or friendshoring alternatives.
Manufacturers, in particular, need a new decision-making framework to navigate sourcing and production challenges in the volatile landscape of 2025.
Global Sourcing & Supply Chains Post Pandemic
The post-pandemic world has been undergoing a dramatic transformation in global supply chains, driven by geopolitical conflicts, shifting sustainability priorities, and rapid technological advancements. As we step into 2025, these forces are reaching a critical inflection point, forcing businesses that rely on cross-border operations to rethink their strategies and adapt to an increasingly complex trade environment.
Companies that fail to respond to these shifts risk falling behind, as the global economic landscape is being redrawn faster than ever before. The rise of nearshoring, regionalization, and the adoption of AI-driven supply chain technologies is changing the way businesses operate. With trade patterns shifting significantly, businesses must remain agile and proactive.
Key Drivers of Supply Chain Disruptions
The global supply chain rewiring is being fueled by several factors that are reshaping international trade and business operations:
1. Geopolitical Tensions and Economic Fragmentation
Geopolitical risks remain a dominant factor influencing supply chain strategies. The ongoing conflicts in Ukraine and the Middle East have significantly impacted energy supplies, commodity prices, and global shipping routes. Companies must navigate an increasingly unpredictable geopolitical landscape where trade restrictions, economic sanctions, and new regulations are becoming the norm.
- The Russia-Ukraine conflict has led to increased energy volatility, with European nations seeking alternative suppliers for oil and gas. This has reshaped logistics and manufacturing strategies, as companies look to mitigate risks related to energy dependencies.
- Rising tensions between the U.S. and China have accelerated decoupling efforts, leading to increased tariffs, stricter export controls, and a push for domestic manufacturing in Western economies.
- The 2024 election cycle across major economies—including the U.S., the EU, and India—has contributed to policy uncertainty, leading to shifting trade alliances and regulatory changes that could impact supply chains in 2025 and beyond.
2. Shifts in Global Trade Patterns
One of the most significant shifts in global trade occurred in 2023, when Mexico overtook China as the top exporter to the United States. This development underscores a broader trend of nearshoring, where companies relocate production closer to key markets to reduce risk and improve supply chain resilience.
- Nearshoring & Friendshoring: Companies are increasingly prioritizing trade partnerships with politically stable and geographically closer countries. Latin America, Southeast Asia, and parts of Africa are emerging as new manufacturing hubs.
- European Trade Realignment: The EU is diversifying its supply chains away from China, particularly in sectors such as semiconductors, renewable energy, and pharmaceuticals.
- Reshoring in the U.S. and EU: Governments are incentivizing companies to bring manufacturing back home through subsidies, tax breaks, and funding initiatives like the U.S. CHIPS Act.
3. Sustainability and Regulatory Pressures
As sustainability takes center stage, companies face increasing pressure to comply with new regulations and consumer expectations:
- The European Union’s Carbon Border Adjustment Mechanism (CBAM) is forcing companies to reduce their carbon footprint or face higher import taxes on carbon-intensive goods.
- ESG (Environmental, Social, and Governance) compliance is becoming a critical requirement, with stricter supply chain due diligence laws being implemented in Europe and North America.
- Consumers are demanding greater transparency in supply chains, pushing companies toward ethical sourcing, fair labor practices, and greener logistics solutions.
Companies that fail to adapt to these sustainability trends risk reputational damage, financial penalties, and loss of market share.
4. Technological Advancements Reshaping Supply Chains
The rapid adoption of Artificial Intelligence (AI), automation, and blockchain is transforming supply chain management, helping businesses optimize operations and mitigate risks:
- AI-powered demand forecasting is improving inventory management, reducing stockouts and overproduction.
- Automation in manufacturing and logistics is enhancing efficiency, with robotic warehouses and AI-driven procurement systems becoming more common.
- Blockchain for supply chain transparency is enabling businesses to track goods in real time, preventing fraud and ensuring compliance with ESG requirements.
- Digital twins—virtual models of supply chains—allow businesses to simulate scenarios and test different logistics strategies before implementing changes.
Companies investing in these technologies will be better equipped to handle disruptions and maintain a competitive edge.
ET2C International Global Sourcing Experts
At ET2C International we have seen a similar trajectory for our clients strategic sourcing. A rapid exploration of:
- Emerging sourcing market to reduce China supply risk
- Dedicated buying office team to deliver margin defence
- Quality & Compliance strengthening
Now is the time for every company to ask new questions about its supply chain footprint. During the pandemic in 2020, manufacturers around the world joined a growing conversation about building resilience. But many of those ideas (reshoring, diversifying sourcing, using AI to avoid risk) never fully came to life. 2025 will be the year that businesses no longer have a choice.
Disruption is coming to global sourcing, supply chain and procurement
As Kearney succinctly summarise – Disruption is coming; what will you do to prepare? Now is the time to rapidly implement a strategic sourcing plan. Making sourcing simple, safe and effective. Contact@et2cint.com
