Supply Chains Shift to Regional Networks Amid Tariff Pressures

The era of seamless global supply chains is ending as companies restructure operations into regional networks in response to escalating tariffs and geopolitical uncertainties, according to new analysis from multiple supply chain experts.

President Trump's latest round of tariffs, including 10% on lumber and 25% on furniture and cabinets set to take effect October 14, is accelerating this transformation. Companies are abandoning the decades-old playbook of manufacturing where costs are lowest and shipping across oceans.

'The old idea of one seamless global supply chain is gone,' noted Rohit Tripathi, Vice President at RELEX Solutions. 'Instead, we're entering a world of interacting regional ecosystems that can flex and rebalance as tariffs and trade blocs shift.'

In North America, Mexico and Canada are becoming vital extensions of U.S. supply chains. Eastern Europe and Poland are taking larger roles in European manufacturing, while Vietnam and Southeast Asia emerge as alternatives to China for electronics and consumer goods.

Maersk's new 'Trade & Tariff Studio' helps companies navigate this complexity, while major manufacturers like Toto are relocating production from Asia to North America. The company's new $224 million Georgia facility will produce 300,000 high-end toilets annually, creating 420 local jobs.

Companies are employing various strategies including tariff engineering—adjusting product form or origin to minimize duties—and expanding private label offerings to maintain margin control amid volatility.