The Big Picture 2025: Supply Chain

The supply chain sector is entering a period of significant change in 2025, driven by geopolitical shifts, climate regulations, and advancements in technology. As global trade and operations evolve, businesses must adapt to emerging challenges and opportunities to remain competitive.

One major challenge is the rise of protectionism, which has steadily increased since 2017. By 2025, international trade policies in regions such as the United States and the European Union are expected to become stricter. Countries including the U.S., Canada, Brazil, Turkey, and those in the EU have introduced higher import duties on electric vehicles from mainland China. These measures are already affecting global trade patterns and may lead to increased costs in countries that apply the tariffs.

Climate regulations are also reshaping supply chains, particularly in industries like steel, aluminum, and building materials. Starting in 2025, companies operating in the European Union will face compliance requirements under the Carbon Border Adjustment Mechanism (CBAM), aimed at reducing carbon emissions. This policy is expected to shift trade flows by discouraging high-emission goods and favoring lower-emission alternatives. According to the Asian Development Bank, this could result in trade realignments as producers of carbon-intensive products redirect exports away from the EU while cleaner products gain greater market access.

At the same time, technology remains a critical tool for supply chain efficiency and resilience. Investments in automation and artificial intelligence (AI) are becoming essential for streamlining operations and managing risks. Recent data shows that the number of unique suppliers per company has increased from 80 in 2020 to 116 in 2024, highlighting a shift toward supplier diversification. Digital tools for procurement and inventory management are helping businesses improve their ability to respond to disruptions and mitigate geographic risks.

Businesses that remain agile and adapt to these changes will be better equipped to succeed in an increasingly complex and competitive global environment.