This week’s supply chain risk news
Will they or won’t they?
U.S. and Chinese trade officials now have until November 10th to negotiate a deal on tariffs, with markets rallying after U.S. President Donald Trump announced the extension.
Among the many questions left open is, what might this mean for manufacturers and supply chains that have, in recent years, expanded in places like Vietnam, Cambodia, and Malaysia? Tariffs for those countries are currently around 19 or 20 percent.
While lower than Trump’s initial threats, that’s still a “gut punch,” as one expert told CNN, “and they need to try to negotiate it lower.”
Whether they can manage that—along with the ongoing talks between Beijing and Washington—could decide whether some manufacturers reshore back to China for things like furniture and toys, which take a lot of work for slim margins.
Then again, “China’s labor costs have been rising and it is gradually losing competitiveness in some more labor intensive lower end manufacturing,” another expert countered. If anything, there may be a case to expand production in Southeast Asia—particularly given hefty transshipment tariffs signaling a quick detour there won’t be an acceptable workaround for Chinese goods headed to the U.S.
The chips must flow
From smartphones to data centers, modern technology hangs on the availability of microchips. The threat of new tariffs, then, “could mean delays, increased costs and urgent supply chain adjustments,” per Data Centre Magazine.
Notably, more than half the world’s chips—including for titans like Apple, Microsoft, and Nvidia—come from Taiwan Semiconductor Manufacturing Company, “making the island nation a focal point – and a potential choke point – in technology supply chains.”
Committing to manufacturing in the U.S. might be one way companies can avoid tariffs—it seems to be working for Apple—but that too comes with perils.
That’s because chip production is not fast and easy to onshore, as the U.S. has found in recent years. Despite $6.6 billion in federal backing to Taiwan Semiconductor to open a plant in Arizona, the project faced delays when it couldn’t hire enough people with the right skills, eventually bringing in thousands of workers from Taiwan.
Forced labor “a growing threat” to some supply chains
An ongoing fight to keep forced labor out of supply chains is intensifying. There have long been accusations concerning Uyghur workers in Xinjiang, in western China, prompting a 2021 U.S. law targeting cotton from the region, while Europe passed its own rules on forced labor in supply chains last year.
That’s led to shifting tactics, per reporting by the Bureau of Investigative Journalism and others. While forensic science can trace where cotton came from using isotope ratios as a kind of fingerprint, those methods are less helpful with cottonseed fermented and blended into animal feed in supply chains that extend to the U.K. and Iceland. And the problem is much broader, as Uyghur workers may be relocated far from Xinjiang, working not on cotton but car parts or plastics.
If anything, Xinjiang’s reach into Europe is deepening, with dozens of new air cargo routes popping up. This “poses a growing threat to the integrity of EU and U.K. supply chains,” according to Manifest Risk, a recent report from the Uyghur Human Rights Project. Seven new airports are expected to open in Xinjiang by the end of this year.
For those expecting the unexpected
When it comes to potential supply chain disruptions—even unexceptional ones, like shipments delayed by damaged containers—there’s a lot you can’t predict, let alone control. But what about the parts you can? How do you strategize and prepare for whatever cards might be dealt so you can respond optimally when it matters?
Answering such questions hinges on managing logistics risk. And thinking proactively about it, rather than firefighting one crisis after another, can inform your organization’s broader balancing act between lean efficiency and supply chain resilience.
In short, this first means mapping out a digital twin of your logistic network, including factories, warehouses, airports, and shipping lanes. From there, you can watch for threats, ranging from hurricanes to cyberattacks to political instability—and thereby get early warnings and make informed decisions accordingly.
This can ultimately help you know what to be ready for—what risks are worth prioritizing—and use that information to craft and refine action plans. The upshot? When potential disruptions emerge, in place of panic, you have a playbook.
