Article Highlights:

• The Trump administration has come out of the gate with an aggressive, confrontational approach to international trade relations, announcing tariffs on Canada and Mexico, steel and aluminum imports, all goods coming from China, and hinting at even more trade restrictions targeting countries all over the world. 
• Cultivating dual sourcing throughout your supply chain is one of the most proven bulwarks against volatility in the trade landscape.
• AI can help firms assess risk, map suppliers, identify new vendors, and manage inventory, among other capabilities, but most businesses have yet to truly optimize its potential in any of these specific niches. 

Disruptions are an inextricable aspect of our global supply chains. While some disruptions—like hurricane season—can be counted on like clockwork, others—like tariffs—are dynamic, with administrations and geopolitics spurring new changes every few years. Many of these factors are risks that businesses have been battling in some form or another for decades. Each year, however, tends to bring its own unique blend of supply chain challenges. 

Last year was defined by three overarching challenges:

• The throttling of major supply chain bottlenecks, including in the Red Sea and the Panama Canal.
• Forced labor crackdowns in the U.S. and abroad.
• The first stages of multiyear rollouts for groundbreaking ESG regulations in the European Union. 

But through just the first two months of 2025, the risk landscape for global supply chains has already evolved significantly. This is in large part a consequence of the new U.S. presidential administration, along with a shifting world order. And while these dynamics have an indisputable impact on international trade relations, they may also come to influence other supply chain variables, including sourcing and procurement and environmental compliance. 

1. Tariffs and Geopolitical Conflict

Two months into 2025, tariffs and trade restrictions have emerged as arguably the preeminent supply chain challenge of this year. The Trump administration has come out of the gate with an aggressive, confrontational approach to international trade relations, announcing tariffs on Canada and Mexico, steel and aluminum imports, all goods coming from China, and hinting at even more trade restrictions targeting countries all over the world. 

Two months into 2025, tariffs and trade restrictions have emerged as arguably the preeminent supply chain challenge of this year.

Given how many businesses depend on an intricate global manufacturing ecosystem with direct and sub-tier suppliers all over the world, this new era of protectionism introduces a major risk factor. Many U.S. companies may soon face significantly higher manufacturing costs, a development that could send shockwaves to consumers and the broader economy. 

Tips on Navigating Tariff & Trade Challenges

• Businesses should keep a close eye on all trade developments. It’s important to be able to identify the crucial distinctions between those tariffs that have gone into effect, those that have hard implementation dates and those that have merely been advanced as threats and negotiating tactics. 

• Supply chain experts may want to familiarize themselves with the U.S. Harmonized Tariff Schedule (HTS) and the HTS codes for their organization’s products.

2. A Lack of Supply Chain Agility and Resilience

This challenge is strongly connected to the one mentioned above, but it’s also urgent enough to warrant its own section. Because the global trade landscape is as dynamic as it’s been in at least a generation—if not longer—businesses need to develop agility and resilience within their supply chains. The frequency and severity of global disruptions is intensifying. As a result, businesses must maintain the flexibility to quickly adapt to sudden changes—whether it involves shifting suppliers, regions, or processes in order to effectively mitigate adverse impacts.

It’s also important to note that while supply chain agility and resilience are often seen as responses to external disruptions, they are primarily internal challenges. Achieving supply chain resilience hinges on having the right information at the right time. This means structuring internal processes in a way that allows team members to systematically gather information, understand its relevance, and act on it with decisiveness. Despite all the data and technology at our disposal today, many companies continue to encounter difficulties in this area. This is due to several factors, including:

• Lack of internal collaboration between teams
• Lack of transparency from suppliers
• No single source of truth for data collection and management
• Absence of risk assessment and reporting processes

Companies that fail to get ahead of this challenge will find themselves falling behind—and fast. President Trump has already imposed two new 10% tariffs on all Chinese goods, and it seems entirely possible that these trade measures are only the beginning of a longer succession of them still to come. By early 2026, there could be 30% across-the-board tariffs on all Chinese goods—over and above the existing duties predating this administration. Firms that lacked the responsiveness to restructure their sourcing accordingly could be incurring devastating import costs. 

Tips on Navigating This Challenge

• Mapping supply chains can help companies see their degree of risk exposure to existing, imminent, and probable tariffs. Now is as good a time as ever to start digging into sourcing networks and getting beneath tier 1, into the subtier manufacturers that make up so much of the electronics and automotive ecosystems (among other industries). 

• Whether you refer to it as dual sourcing, alternative sourcing, or supply chain diversification, businesses can benefit greatly from securing multiple options for parts and subassemblies. Cultivating dual sourcing throughout your supply chain is one of the most proven bulwarks against volatility in the trade landscape.

3. AI Integration 

AI is a powerful new resource in the world of supply chain risk management (SCRM), something Z2Data CEO Mohammad Ahmad recently discussed at length. As we move deeper into 2025, leaders need to start thinking more strategically about how they want to leverage its considerable slew of functionalities to the task of managing their supply chains. AI can help firms assess risk, map suppliers, identify new vendors, and manage inventory, among other capabilities, but most businesses have yet to truly optimize its potential in any of these specific niches. 

With that said, it’s important to recognize that AI remains in its infancy as both a technology and a tool for businesses. While the opportunities—as mentioned above—are immense, companies should approach AI adoption with caution. New technologies will always be appealing and full of tantalizing potential, but rushing into them without a clear understanding of how they align with long-term strategies could lead to costly mistakes. Right now, it’s still highly unclear which solutions are going to emerge as the true winners of the AI boom—and which startup firms will be careering toward bankruptcy over the next few years. This uncertainty makes it crucial to vet not only the technology itself, but also the companies behind it.

Adoption also presents another challenge. Effectively integrating even the best artificial intelligence tools comes with resource challenges, including upfront costs, human resource management (HRM) concerns, and strategic requirements. Ultimately, SCRM professionals cannot afford to neglect AI, but they should not expect implementation to yield instant gratification, either. Nevertheless, the year 2025 could be the one where assertive, forward-thinking companies make the leap to integrating artificial intelligence into their operations in an essential, enduring way. 

Nevertheless, the year 2025 could be the one where assertive, forward-thinking companies make the leap to integrating artificial intelligence into their operations in an essential, enduring way. 

Tips on Navigating This Challenge

• SCRM executives need to establish clear objectives and KPIs to measure success after six, 12, and 18 months. Without concrete benchmarks, AI can become an expensive, unwieldy tool that isn’t directly tethered to guidelines or priorities. 

• On the other hand, businesses need to be prepared and willing to pivot if the technology doesn’t flourish in the initial use-cases that were established for it. As Z2Data CEO Mohammad Ahmad put it in a recent post, “Experimentation is an essential element of maturation, and firms need to maintain a dynamic, open-minded approach if they want to maximize their AI tool.”

4. Climate and Natural Disasters

According to the National Oceanic and Atmospheric Administration (NOAA), between 1980 and 2024 there were 403 weather and climate-related disasters that caused damages in excess of $1 billion in the U.S. Spread out over 25 years, this comes out to an average of around 16 billion-dollar disasters a year. The frequency of such calamities, however, has been increasing sharply more recently. Over the past five years there have been, on average, 23 such events annually (CPI adjusted). And last year, NOAA explained, “there were 27 confirmed weather/climate disaster events with losses exceeding $1 billion each to affect United States.”

While hurricanes, cyclones, and floods have not necessarily dominated headlines in recent months there is nothing to suggest that 2025 will not usher in its own share of natural disasters that cripple infrastructure, trigger factory shutdowns, and threaten human lives. The impact of Hurricane Helene on a key quartz mine in Spruce Pine, North Carolina had major effects on global semiconductor manufacturing, revealing the fragility of supply chains with large chokepoints. 

Businesses need to come to terms with the fact that the risk and scale of disruptions from these events are as high as they’ve ever been. Even if organizations don’t necessarily preemptively restructure their supply chains to avoid disaster-prone geographical areas, they should still be prepared to respond quickly when mother nature wreaks havoc on their supply chains. 

Tips on Navigating This Challenge

• Have an established, systematic alert system that lets you know when natural disasters and other weather events are at risk of impacting your suppliers. The earlier companies are made aware of potential disruptions, the faster they can implement decisive contingency measures.

• Sourcing and procurement professionals should be knowledgeable about the climate and weather events that occur most frequently in the countries where key suppliers are based. Even just a surface grasp of the scope of possible disasters can help teams react more effectively and efficiently when a flood, typhoon, or wildfire triggers a disruption in their supply chain. 

Volatile Risk Landscapes Demand Maximum Agility

As 2025 continues to take shape, it’s increasingly clear that geopolitics will be one of the year’s defining features. Not only is the U.S. asserting its power and leverage on the global stage by reshuffling international trade relations, but a thicket of rising tensions are evolving diplomatic relationships and spheres of influence. While it’s difficult to say how these seismic shifts will impact global supply chains—beyond the explicit effects on trade—there’s a strong likelihood that other, related risks will emerge over the course of the year. 

Given this precarious supply chain environment, businesses looking to establish security and continuity in 2025 should explore the possibilities available through a supply chain risk management (SCRM) tool. The Z2Data platform, for example, offers a range of effective methods for understanding supply chain vulnerabilities, including part-to-site mapping, detailed supplier profiles, and sanctions forecasting. And for organizations looking to diversify their supply chains and foster agility against potential tariffs, Z2Data features a customizable cross-references search tool to help businesses shift away from specific countries of origin. 

Together, Z2Data’s full suite of tools give organizations powerful risk sensing capabilities—the kind that could prove vital as we move deeper into this volatile year. To learn more about the Z2Data platform and how its tools can help you effectively mitigate emerging trade risks, schedule a free demo with one of our product experts.