Biannual Supply Chain Report: Five Trends Shaping the Economic Landscape
From disruption to continual risk.
After several years of disruptions, US supply chains are entering a new phase in which they are no longer fixed but expected to be in constant motion. Firms are operating in an environment where trade policy, geopolitical risk and technological change have become embedded in the cost of doing business; the most recent Supreme Court decision and subsequent levying of new tariffs, combined with escalating tensions in the Middle East, underline the trend. This biannual report outlines five trends reshaping the economic outlook and what those trends mean for businesses trying to navigate the elevated levels of uncertainty.
1. Trade policy as a standing cost
In 2026, trade policy is likely to be treated as a standing cost embedded in global supply chains, rather than a temporary disruption to wait out. Escalation of tariffs originating in the US and the uncertainty surrounding their scope, duration and enforcement are likely to alter sourcing and inventory strategies.
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2. Overhang of geopolitical risk
Outside of the risks of tariffs and trade wars, supply chains are more exposed to ongoing geopolitical challenges. The geopolitical risk index moved up on average in 2025 and reached levels not seen since 2022. Those two years were the most elevated for geopolitical risk since the onset of the Afghanistan and Iraq wars. We are moving away from a period of low geopolitical tensions into one of heightened risk.
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3. Regionalization deepens
Rapidly deteriorating relationships between the US and its closest trading parters have been the most notable consequence of a loss in trust. Most of the talk about a reordering of global trade has focused on economic fragmentation; that is only true of the US and how it says it wants to interact with the rest of the world. The rest of the world is not fragmenting but forging ahead on trade agreements with or without the US.
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4. Artificial Intelligence (AI) opportunities and risk
AI has presented significant opportunities and risks for supply chain operations. AI tools are being deployed for demand forecasting, inventory optimization and route planning for faster reactions to real-time disruptions. At the same time, transformations in AI have added to the long list of risks for supply chain managers.
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5. Global capital and financial flows impact supply chains
The erosion in trust on a global scale has affected financial markets; the stunning surge in gold prices over the last year has been the most visible result. It has led to unintended consequences in exchange rates, which could become a bigger factor in 2026.
