US-China standoff: Sanctions and supply chain risks

As geopolitical tensions rise following the raft of US tariffs, and trade policy with China is yet to be finalized, we conducted a global cross-country analysis of US-China economic exposure and reliance to assist strategic planning and supply-chain risk management.

Trade policy escalating beyond tariffs to sanctions poses significant risk to global supply chains, with concerns that other nations could be pulled into the geopolitical standoff.

• We identify Japan and South Korea as the most likely to be entangled as the US and China look to gain influence through foreign policy.
• Key supply-chain hubs Vietnam, Singapore, Malaysia, Thailand, and the Philippines will probably also be in the crossfire, as will India because of its growing regional importance. Conversely, Mexico is more insulated to US-China fallout.
• Taiwan – a semiconductor supply-chain lynchpin – is often the focus of US-China altercations, with the US recently asking its allies how they would respond to a war with China over Taiwan.
• A major disruption in Taiwan would be a fast-acting, existential threat to high-tech manufacturers and firms dependent on these goods; existing supply chains could be severed in less than a year.

Download the report to see how our research extends beyond China–Taiwan tensions and highlights how sanctions—the likely policy response—could magnify the fallout across countries.