US Sectoral tariffs will shape supply chains in 2026

Our supply-chain stress index rose in October after sticking within a narrow range over the past year. Volatile trade flows have been balanced by healthy inventory levels and low freight rates. Our index has remained within a tight range over the past year, despite large swings in trade volumes and changes in supply-chain routes due to tariffs.

• Early data suggests freight rates and import volumes have risen in November and December, but we think this is due to holiday demand and will likely reverse in early 2026.
• Tariff threats have prompted pharmaceutical companies to announce over $370bn in investment in US manufacturing plants. This supports our forecast for investment to grow by more than 3% in the next few years.
• We expect decoupling from China in these sensitive commodities will be offset by greater domestic production, alongside a rise in imports from Australia and possibly Brazil.