Author – Kanchan Mishra

For any organisation relying on a global supply chain, weathering storms caused by macroeconomics, geopolitics, or regional conflict is nothing new. Smart businesses factor these potential impacts into their supply chain design from the outset.

Modern supply chains are intricate, often comprising numerous businesses responsible for different elements, each with its own local regulations and geopolitical challenges. All are expected to work together harmoniously, meaning a wealth of different factors now feeds into the true sustainability of global supply networks.

Trump Tariffs and the Need for Supply Chain Due Diligence

Supply chain resilience isn’t just a concern for the businesses that depend on them; it’s also a critical risk factor for investors. Major global events, like the COVID pandemic, highlighted the need for a new level of contingency planning, for when ‘Plan A’ is no longer an option.

This planning relies on one key principle: a thorough understanding of the supply chain in all its complexity. This is where Supply Chain Due Diligence (SCDD) comes in.

The sweeping trade tariffs imposed by the US, and the retaliatory tariffs from other nations, have thrown the need for effective SCDD into sharp focus. Whether these tariffs hold or are negotiated away, the ripples spread globally in real-time. As with many sectors of the global economy, uncertainty is the enemy. Supply chains take a long time to establish and optimise, so when trouble hits, shifting to a new supplier or region isn’t a simple fix.

The Ripple Effects

Knowing the key areas of a supply chain’s composition and which metrics to watch, can provide early warning signals to all stakeholders. At SustainoMetric, SCDD is a core part of what we do for our clients, so we have insights to share.

Let’s look at what’s happening on the ground so far:

• Costs to business: According to a Reuters analysis of corporate disclosures, the US trade tariffs are estimated to have cost global companies more than $34 billion so far in lost sales and higher costs.
• Shipments delayed: Chinese exports to the U.S. have reduced at major ports. The Port of Los Angeles, a primary destination for these routes, reported a 9% year-over-year drop in volume for May 2025—the steepest decline in over two years.
• Raw material cost surge: Between February and May, the price difference for steel and aluminium between the US and the EU surged by 77% and 139% respectively. This trend is expected to force American companies to re-evaluate their supply chains.
• Impacting consumer wallets: Trump-era tariffs are directly inflating consumer prices. For example, a $30 cotton sweater could rise to $35.80 (a 19% increase) under current tariffs, and jump to $57.97 (a 92% increase) if the full proposed tariffs are passed on to buyers.
• Emerging markets under strain: Sweeping tariffs, some as high as 50%, are causing structural “shocks” across emerging economies. Heavy reliance on exports has left these countries vulnerable, triggering currency volatility, stock market dips, and declining capital flows.

Key Supply Chain Health Indicators

Which other indicators should stakeholders be watching? We track a number of KPIs to get a more empirical and immediate view:

• High-Risk Supplier Exposure (by volume/value): What proportion of supply comes from tariff-affected geographies? A rising percentage signals growing exposure to cost shocks and delivery delays.
• Supplier Market Concentration: Is the supply chain overly dependent on a single supplier or region? Higher concentration means greater vulnerability to price or tariff hikes.
• Import Dependency Ratio: How much of the key raw material inputs is sourced externally? This metric tracks exposure to global logistics disruptions and strategic dependencies.
• Geopolitical Diversification Metric: This highlights resilience against region-specific shocks. Balanced diversification reduces exposure to both tariffs and unrest.
• Alternative Sourcing Readiness: What is the number of qualified and ESG-compliant backup suppliers per critical input? This measures agility. High readiness means a faster pivot in a crisis.
• Supply Chain ESG Compliance Rate: This tracks the proportion of suppliers adhering to sustainability, labour, and environmental standards, which is critical to avoiding reputational risk while diversifying under pressure.

Industry Leaders are Sounding the Alarm

Some of the largest U.S. companies have already raised red flags:

• Walmart’s CFO, John David Rainey, called the cost hikes “unprecedented” citing double-digit price rises on toys and daily essentials.
• Best Buy’s CEO, Corie Barry, mentioned their supply chain is deeply embedded in China and Mexico, making it harder to sustain pricing and availability.
• Ford’s CEO, Jim Farley, stated that a 25% tariff on imports from places like Mexico would “blow a hole”in the U.S. auto industry.
• Target’s CEO, Brian Cornell, said there will be “meaningful pressure” on its profit due to increased import duties and slowing consumer spending.
• J.M. Smucker’s CEO, Mark Smucker, said, “The current U.S. tariff impact on green coffee is our largest exposure that we will manage on top of navigating record‑high costs for the commodity.”

For those who operate, rely on, or invest in global supply chains, these aren’t just cautious warnings; they are urgent alarms. The impacts of this tariff climate could be felt for months, or potentially years, as supply networks realign.

Know Your Supply Chain for a Competitive Advantage

SCDD is more than a cautionary measure. Mitigating risks and building more resilient supply chains offers a way to outcompete your peers.

Supply chains will always be susceptible to external shocks. Risk in these networks is now a core part of sustainability performance, enterprise resilience, and the health of national and global economies.

There is no hiding from it. The companies that act now, with data-driven due diligence, will better understand their risks and be better prepared to lead the way in the next market cycle.

Kanchan Mishra is the founder and CEO of SustainoMetric, a leading independent provider of high-quality, comprehensive, bespoke sustainability consultancy, research, and analysis.

“First published in Finextra, 25 June 2025.”