Tariff shocks, ripple effect, and deep uncertainty in supply chains: we are entering a turbulence zone, please fasten your seatbelts

Dmitry Ivanov and Alexandre Dolgui

International Journal of Production Research, 2025, vol. 63, issue 19, 7305-7317

Abstract: The increasingly turbulent world necessitates research about the consequences of tariffs – and large-scale systemic shocks in general – on supply chains. Tariff chaos is a unique type of systemic shock characterised by (i) a combination of immediate and delayed effects, (ii) cross-industry ripple effects, (iii) short-term responses to ensure resilience and long-term adaptations for viability, and (iv) bidirectional reflexion of supply chain and economics decisions. This type of shock in the setting of a global economy and low in-house production depth is unique, opening novel research areas. The reaction of supply chains to such shocks – and their preparedness for similar large-scale systemic risks – can influence macroeconomic dynamics and the viability of industries and society. In this position paper, we discuss how, in our opinion, tariffs and trade wars will impact supply chains, how supply chains can become exposed to the shocks they exacerbate, e.g. higher inflation driven by hikes in material costs, and how supply chain reactions to tariff crises impact the economy. We conclude that it is not the shocks themselves but the prolonged conditions of deep uncertainty and chaos which challenge supply chain responses. We offer arguments and implementation recommendations for adaptability and viability at times of unpredictability and deep uncertainty. We show why these areas are promising research domains in production research.

Date: 2025
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DOI: 10.1080/00207543.2025.2520598

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