22 Critical Supply Chain Risks to Watch for in 2026

Article Highlights:

• Geopolitics has re-emerged as one of the biggest disruptors in global supply chains in 2025. Recurring and new risks include armed conflict, reciprocal tariffs, and export restrictions on rare earths and critical minerals. 
• Beyond simply rising or falling, tariff structures themselves are changing, with some semiconductors now being tariffed based on their Country of Design (COD) rather than the traditional Country of Origin (COO).
• Supplier-related risks are becoming some of the most disruptive and least predictable challenges for manufacturers, especially those without n-tier visibility. Risks include financial stability as well as regulatory and trade compliance. 

Supply chain risks aren’t just multiplying in number—they’re growing in breadth. In 2025, organizations with sophisticated and highly global supply chains are constantly under threat from disruptions at every stage of the product lifecycle. Whether it’s annual typhoons in Southeast Asia, a supplier’s surprise bankruptcy announcement, or export restrictions that touch off a chain reaction, supply chain disruptions are clawing at every part of the supply chain.

As part of helping organizations fully understand their scope of risk, Z2Data has compiled a list of the biggest supply chain risks companies are now facing. These are the risks to watch out for if you want to successfully navigate 2026:

Geopolitical/Trade

Geopolitics has re-emerged as one of the biggest disruptors in global supply chains. From tariff swings to retaliatory export controls, the past year has delivered a series of rapid, unpredictable policy moves that have directly impacted companies operating across borders. These events aren’t just reshaping industries, either. They’re also putting individual companies under intense pressure, as they scramble to secure parts, critical minerals, and essential components.

From tariff swings to retaliatory export controls, the past year has delivered a series of rapid, unpredictable policy moves that have directly impacted companies operating across borders.

• Armed Conflict: Armed disputes between nations (e.g., Russia–Ukraine, India–Pakistan) can cause major disruptions in global logistics, raw material access, and energy supply. Manufacturers face production shutdowns, shipping delays, and input cost spikes when regional conflicts escalate. 

• Trade Conflicts: Trade disputes often result in sanctions, export restrictions, or other retaliatory measures. The ongoing U.S.-China trade tensions, for example, triggered Chinese export controls on rare earth materials—critical inputs for automotive and electronics manufacturers.
  
  In April 2025, China announced new export controls on several key critical minerals. By May, Ford confirmed it had shut down a plant for weeks due to shortages. As Ford’s CEO explained: “We shut down plants for the last three weeks because we cannot get high powered magnets.” The episode underscored how quickly trade friction can halt production.

• Sanctions & Entity Restrictions: Governments increasingly use sanctions to restrict trade with specific companies or regions. The consequences can be severe, including forced divestitures or government takeovers of private companies.
  
  The most recent example is the Nexperia crisis. After the U.S. implemented the BIS 50% Affiliates Rule—extending export restrictions to companies 50% or more owned by Entity List members—Nexperia, owned by China’s Wingtech Technologies, became subject to the new controls. In response, the Dutch government moved to take control of the company, prompting China’s MOFCOM to ban Nexperia’s Chinese unit from exporting components manufactured in China. The impact has rippled through the automotive chip supply chain, which sources heavily from Nexperia. 

• Conflict Minerals & Rare Earth Dependencies: China’s dominance in rare earths and critical minerals creates a substantial dependency risk. Policy shifts—such as the export restrictions seen in 2024 and 2025—have placed added pressure on electronics, renewable energy, and EV supply chains that rely on these constrained materials.

Tariff-Specific Risks

While supply chains face an array of geopolitical pressures, tariffs remain the most persistent and headline-grabbing disruptor—shifting week after week and forcing manufacturers to navigate sudden cost swings. Beyond simply rising or falling, tariff structures themselves are becoming increasingly unpredictable. In some cases, products such as semiconductors are now being tariffed based on their Country of Diffusion (COD) rather than the traditional Country of Origin (COO), introducing new layers of complexity for importers.

Under the Trump Administration, tariffs have evolved from a narrow trade instrument into a broader tool of geopolitical leverage. As national security interests and foreign policy priorities shift, tariff actions are increasingly deployed with little notice, making them a constant strategic risk for global supply chains.

As national security interests and foreign policy priorities shift, tariff actions are increasingly deployed with little notice, making them a constant strategic risk for global supply chains.

• Reciprocal Tariffs: Mutual tariff escalation, especially between the U.S. and China, has driven the U.S.’s average effective rates to 18%, the highest since 1934. These measures increase material costs and complicate new product introduction (NPI) and cost management.

• Sector-Specific Tariffs: Industries such as steel, aluminum, pharmaceuticals, lumber, and cabinetry have become frequent targets of tariffs and anti-dumping measures. These policies distort global pricing benchmarks and make it harder for manufacturers to predict input costs.

• Section 232 Tariffs: In mid-2025, the U.S. doubled Section 232 tariffs on steel and aluminum to 50% and closed several reporting loopholes. Firms with incomplete or uncertain sourcing data now face penalties of up to 200%. Later in the year, hundreds of additional product categories became subject to the Section 232 tariffs, indicating potential for further expansion.
  
  The fallout from this rapid, aggressive expansion of Section 232’s scope has already started. Several international metal suppliers, including those like Algoma Steel, paused exports to the U.S., leaving manufacturers to scramble for alternative sources.

Supplier Relations & Partner Risks

In today’s supply chain landscape, supplier-related risks are becoming some of the most disruptive and least predictable challenges for manufacturers, especially those without n-tier visibility.

From opportunistic pricing behavior to sudden financial distress among sub-tier suppliers, the vulnerabilities within supplier networks can compound quickly. And when companies rely on single or highly concentrated sources of supply, even minor disruptions can cascade into production delays, extended lead times, and higher costs.

• Supplier Opportunism (“Greedflation”): Some suppliers take advantage of tariff environments, inflationary periods, or general market disruptions to raise prices beyond what actual cost drivers justify. This creates margin compression for OEMs and significantly reduces pricing transparency.
  
  The issue first gained prominence during the COVID-19 pandemic. A 2023 paper by economists at the University of Massachusetts Amherst argued that U.S. COVID-era inflation was largely “sellers’ inflation,” driven by firms with market power raising prices to maximize profits rather than by genuine increases in underlying costs. The researchers highlighted the record-breaking corporate profits of 2021 and 2022—profits that rose in parallel with inflation—suggesting that many companies were strategically leveraging market conditions to expand margins.

• Supplier Financial Instability: Financial distress among Tier-1 or sub-tier suppliers can introduce sudden and severe disruptions. Bankruptcies, restructuring, or liquidity issues may jeopardize parts availability and force OEMs into rapid re-sourcing under significant time constraints. These events often have cascading effects, too, particularly when distressed suppliers operate in specialized or capacity-constrained segments.

• Mergers & Acquisitions: M&A activity can dramatically alter a supplier’s ownership structure, risk profile, product portfolio, and compliance exposure. 

• Single Sourcing: Reliance on a single supplier for a critical component or material creates a high vulnerability to disruption if that supplier encounters operational issues, quality problems, or geopolitical constraints. The impact includes potential production halts, long lead times to qualify alternates, and increased bargaining power for the supplier.

Regulatory & Compliance Risks

Regulatory pressure is continuing to grow, especially in the European Union, as governments prioritize deep upstream transparency that requires companies to understand not just who their suppliers are but how they operate. New regulatory requirements mandate that businesses know where they source materials and how they manage their environmental impact and human rights risks. 

• ESG: New global regulations, such as CSRD, CSDDD, and EUDR, are transforming how companies measure and disclose ESG performance. These rules require granular data collection across the supply chain, including emissions, deforestation exposure, due diligence practices, and supplier-level traceability.
  
  Non-compliance can lead to financial penalties and mandatory remediation. In the case of the EUDR, the consequences for violating firms can be loss of access to the EU market for products that cannot be verified as low-risk.

• Chemical & Material Level Regulations: Regulations targeting hazardous substances are expanding rapidly. PFAS restrictions—as well as longstanding frameworks like REACH—demand detailed BOM-level visibility and continuous monitoring of material composition.
  
  To comply, companies must maintain specialized materials data, track evolving substance lists, and ensure suppliers are updating formulations and documentation in real time, an increasingly complex task for manufacturers.

• Human Rights & Trade Compliance: Governments are tightening labor and ethical-sourcing rules through legislation such as the UFLPA, the UK Modern Slavery Act, and Canada’s Modern Slavery Act. These laws require companies to demonstrate robust due diligence across all tiers of their supply chain, with a focus on forced labor, working conditions, and supplier accountability.
  
  An example of the impact of this risk occurred in January 2025, when the U.S. Department of Homeland Security (DHS) officially added Zijin Mining Group Co., Ltd. to the UFLPA Entity List. This designation means that any products linked to Zijin or its subsidiaries now face a high likelihood of detention by U.S. Customs and Border Protection (CBP).
  
  Zijin is a major global supplier of copper to manufacturers across the automotive, aerospace, solar, and broader industrial sectors. Its inclusion on the list stems from concerns about the company’s potential ties to forced labor programs, particularly since several subsidiaries—such as Xinjiang Habahe Ashele Copper Co., Ltd.—are also listed under UFLPA enforcement actions.

Operational & Environmental Risks

Operational disruptions remain some of the most immediate and difficult-to-predict threats to supply chain continuity. As climate volatility increases and production networks grow more interconnected, these risks carry greater potential for sudden, multifaceted impacts across global manufacturing.

• Natural Disasters & Climate Events: Severe weather and climate-driven events can halt production, damage critical infrastructure, and shut down key raw material sources.
  
  For example, Hurricane Helene disrupted quartz mining operations in North Carolina, affecting downstream semiconductor and electronics manufacturers. With climate patterns growing less predictable, these disruptions are expected to intensify.

• Obsolescence: End-of-life components, discontinued materials, and shrinking supplier ecosystems can create sudden production bottlenecks if redesigns or alternates aren’t identified in time. Manufacturers relying on legacy components or niche materials are particularly vulnerable, as qualifying new parts often requires lengthy testing and regulatory review.

• Cybersecurity Breaches: Cyberattacks targeting manufacturers or their suppliers can disrupt production, compromise intellectual property, and create cascading downtime across supply networks.

• Site Incidents: Unexpected incidents such as labor disputes, fires, explosions, chemical leaks, or on-site accidents can shut down facilities critical to global production. These disruptions can lead to extended delays, reduced output, and urgent re-sourcing efforts, particularly in industries with specialized or capacity-constrained manufacturing processes.

• Transportation & Logistics: Global shipping routes remain fragile. Events like the Panama Canal drought and the Red Sea crisis illustrate how environmental strain, geopolitical tension, or infrastructure blockages can slow transit times, restrict vessel movements, and inflate freight costs. These bottlenecks ripple across supply chains, undermining predictability in production planning and inventory management.

Labor Risks

Labor dynamics have and continue to be an ongoing risk for manufacturers, especially as organizations seek safer regions for their supply chains in light of emerging regulatory and geopolitical challenges. From talent shortages to wage pressures, these labor-related challenges all contribute to additional supply chain uncertainty. 

• Skilled Labor Shortages: Many manufacturing sectors are grappling with widening talent gaps. As experienced workers retire and fewer new workers enter their fields, companies face rising labor costs, slower ramp-up times, and difficulty scaling production to meet demand.
  
  A clear example is the challenge of staffing TSMC’s fabrication plants in Phoenix, Arizona. As the company ramps up its advanced manufacturing footprint in the U.S., it must rely on the domestic talent pool to operate highly specialized, state-of-the-art fabs. Local universities are rapidly expanding programs to prepare students for semiconductor manufacturing roles, but it remains unclear whether these efforts will produce a workforce large and skilled enough to meet TSMC’s long-term operational needs in the U.S.
  
  
• Labor Strikes: Labor strikes across automotive, logistics, and critical manufacturing sectors continue to create widespread disruptions. Prolonged work stoppages can halt production lines, delay shipments, and force OEMs to revise production schedules—or temporarily shutter facilities. These events often produce ripple effects across supply networks, particularly when they involve ports, rail systems, or major tier-1 suppliers.

Z2Data Can Help Companies Navigate 2026’s Risk Minefield

This year has introduced new challenges and intensified existing ones for companies with sprawling, highly sophisticated global supply chains. While this list of supply chain risks isn’t exhaustive, it illustrates just how broad and interconnected today’s vulnerabilities have become. It’s no longer about mastering one or two key risks—it’s about having a strategy to confidently navigate all of them. Just one critical misstep—whether it’s a sanctioned sub-tier supplier or falling out of compliance with CSRD—can leave companies scrambling to deliver products on time in an increasingly competitive market.

Taken together, these forces are reshaping how companies plan, source, and safeguard their supply chains, making resilience and proactive risk mitigation more essential than ever. Organizations looking to strengthen their supply chain risk management (SCRM) as they enter 2026 can find a lot of value in SCRM platform Z2Data. Z2Data offers a wide range of risk management features and capabilities, including but not limited to:

• Supply Chain Mapping
• Sub-Tier Intelligence
• Supplier Risk Analysis
• Real-Time Supply Chain Monitoring
• AI-Powered Event Intelligence
• Parametric Part Search
• Industry-Leading Obsolescence Forecasting
• Compliance Assessment and Risk Analysis

With Z2Data’s 360-degree risk management infrastructure, companies can transition into 2026 with confidence in their supply chain resilience. To learn more about Z2Data and its risk management features, schedule a free trial with one of our product experts.