Rethink amid fragmented supply chains

The prevailing ad-hoc tariff-centric responses to geopolitical volatility are insufficient to guarantee sustained economic security and domestic resilience

- MUKESH BUTANI SHANKEY AGRAWAL

SUPPLY CHAINS ACROSS the globe traditionally operate on the trinity of speed, reliability,and cost.

However, since the US led tariff war, this equilibrium has been broken,and supply chains are now guided by macroscale geopolitical conditions. Business decisions have now become contingent on political conditions, rather than a sound commercial logic. Companies are being forced to shift away from an “efficiency-first”and just-in-time” model to “just-in-case” models. This shift represents a transition to geoeconomic fragmentation. In this new landscape, trade policy functions as a primary lever of economic warfare.

Tariffs today shape investment decisions and not just import pricing, harping upon relative costs of production, creating market certainty and changing profitability incentives for businesses.According to a recent study, 57% of US companies have postponed or cancelled major new capital infusions due to tariffs.