Trade wars won’t break supply chains. But the consumer impact will trouble brands

Over the past decade, global business has learned to operate under the assumption that disruption is normal. Tariffs come and go, geopolitical tensions flare. What has changed is not the frequency of disruption, but the realization that volatility is now a permanent feature of the system.

Hence, while renewed geopolitical and trade tensions between the U.S. and key partners dominated the Davos news cycle last month, the mood among supply chain leaders was calm. The fact is, most large, global supply networks are already designed to operate under this level of uncertainty, because there was no other choice.

Why supply chains are holding up

Today’s supply chains are built for survival. Companies have built operational muscle through repeated exposure to tariff threats and trade wars. They’ve become accustomed to pulling shipments forward, rerouting inventory across regions, adjusting sourcing strategies, and relying on multi-node networks designed to dampen shocks.

Further escalation of trade tensions is unlikely to result in empty shelves or stalled production lines. From an availability perspective, the system is functioning exactly as intended. But it’s not cheap.

This shift didn’t start with the current U.S. administration, or even the first Trump presidency. Long before trade wars dominated headlines, supply chains were already moving toward regionalization and reduced dependence on single countries. Global supply chains are far more robust than they used to be, which is reflected not only in operational performance, but also in the muted reaction from investors to policy noise.

Trade policy matters, but is no longer the point of failure

In the weeks following Davos, attention turned to the delay to ratifying the EU-U.S. trade deal. But while lower-friction, lower-cost trade is always preferable, this kind of policy freeze won’t upend global trade flows. The goods will keep moving while politics catches up.

At the same time, governments are actively looking to diversify trade agreements in response to growing instability—the EU’s trade deal with India, Canadian and British visits to China. Even though the EU missed out a deal with several nations in South American trade bloc Mercosur, efforts to find ways around U.S. pressure will continue.

These moves point to a more fragmented and reactive trade environment, one that disperses uncertainty rather than eliminating it. For operations, the more consequential question is not whether trade tensions will break the system, but where the cost of managing that uncertainty ultimately lands.

Consumers absorb what supply chains smooth over

Keeping the shelves stocked is a positive outcome, but it comes at a price. The ingenuity required to keep goods flowing in a volatile trade environment incurs costs, some of which have to be passed to consumers.

We recently surveyed 14,000 shoppers across seven major economies and found that nearly three in four (74%) had been affected by rising prices, with more than half switching to lower-cost brands as a result. Much of that pressure builds at the handoffs between suppliers of materials, components and intermediate goods, leading to incremental cost increases at each step.

From a consumer perspective, the distinction between policy decisions and business actions is blurred. When prices increase, shoppers assign blame broadly, to governments and brands alike. Trust is already fragile, so rising prices tied to trade uncertainty create reputational risk for businesses as well as political risk for governments. For supply chain leaders, this introduces a challenge that goes beyond resilience and efficiency.

Managing friction in the system

The way supply chain leaders and policymakers respond to uncertainty is diverging. Operations teams are planning for multiple scenarios, avoiding overreaction, and staying focused on maintaining the flow of goods. Political discourse on the other hand is leaning toward positions that challenge stability.

None of this is to say that trade policy does not matter, or that delays and constant changes are harmless. Over time, uncertainty acts like friction in the system. It slows investment and raises costs. The distinction is that the damage is subtle and slow-moving.

As geopolitical turbulence continues in 2026, most supply chains will continue to function. The challenge for businesses will be managing the downstream consequences of higher costs, and communicating effectively about them. This is not an easy conversation. Many consumers are operating with little tolerance for further price increases and are quick to assign blame when they occur.

The test for leaders is whether they can apply the same foresight to managing costs and explaining them, as they have to keeping supply intact and shelves stocked. Justifying the cost of resilience may soon matter as much as the operational excellence that delivers it.

About the author

Kevin O’Marah is the co-founder of Zero100, a London-based research services firm. Prior to helping launch Zero100, O’Marah was a director at Amazon, chief content officer at SCM World and a group vice president at Gartner. He was a Senior Research Fellow in Stanford University’s Graduate School of Business.

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