Supply Chain Predictions for 2025: How Geopolitics, Cybersecurity, Tariffs, Climate and AI are Reshaping Risk Management

Posted on February 18, 2025 by interos.ai

In a recent webinar, “5 Supply Chain Predictions for 2025,” industry leaders Ted Krantz, CEO of interos.ai, Andrea Little Limbago, PhD, SVP of Applied AI at interos.ai, and Dave Dewalt, Founder and CEO of NightDragon, discussed the major disruptions reshaping supply chains and risk management. From geopolitical instability to the rise of AI-powered solutions, the conversation highlighted the emerging threats that companies will need to navigate in the coming years.

Geopolitical Instability: A Triple Threat to Supply Chains

Geopolitical tensions continue to have a profound impact on global supply chains. Regions like Eastern Europe, the Red Sea, and the South China Sea are causing significant disruption. Ted shared, “You’ve got a combination of sanctions and restrictions that are trying to operate in a world with limited borders, but you still have to insert some of these components to have some semblance of control and safety in terms of the global supply chain.” The potential for a trillion-dollar economic impact was raised, emphasizing how intertwined businesses are with high-risk areas.

Dave added, “Geopolitical risk is becoming an existential risk area for nearly every company, understanding not just what vendors you buy from, but what vendors they buy from is critical.” He emphasized the importance of having visibility into the entire supply chain, including second, third, and fourth-tier suppliers, to avoid catastrophic disruptions.

Cybersecurity: Convergence of Digital and Physical Risks

Cybersecurity threats are no longer limited to digital systems alone; physical infrastructure is now at risk too. Dave noted the increasing number of cyberattack groups, saying, “There are over 3,000 cyber-attack groups now worldwide. This number is up dramatically since COVID, and it’s not just nation-states; you’ve got criminal groups and hacktivist groups.”

The growing sophistication of cyber adversaries and the integration of digital technologies into physical systems, such as satellites and undersea cables, means the risk landscape is widening.

Andrea also pointed out the ripple effects unknown physical components can have: “One thing that gets overlooked is how countries are moving toward data localization and sovereignty. Many countries require data to be stored within their borders, and companies often don’t even know where their data is stored. This raises serious concerns about data security and compliance.“

To manage these evolving threats, the panel stressed the need for comprehensive real-time monitoring and a holistic view of both digital and physical risks.

Trade and Tariffs: The Economic Gamble

The ongoing trade tensions, particularly between the U.S. and its primary partners China, Mexico, and Canada, have introduced a new layer of complexity to the global supply chain. Ted described tariffs as “the biggest wildcard for supply chains in 2025.”

In particular, the automotive, technology, and agricultural industries are expected to bear the brunt of trade restrictions. Ted noted the complexity of the trade relationships between the U.S. and its neighbors: “Take the automotive industry. It’s highly connected between all three countries—Canada, Mexico, and the U.S. Trying to pull apart that supply chain could be extremely difficult and costly.”

Dave reinforced the idea that trade wars are becoming a board-level issue, stating, “Companies today are not monitoring every event across every layer of their supply chain. If you’re not looking at your second and third-level suppliers, you’re putting your company at risk.”

The panel urged companies to reassess their supply chain structures, considering how each layer beyond their direct suppliers could be affected by shifting tariffs and trade policies.

Climate Change: The Growing Impact of Extreme Weather

Extreme weather events and the intensification of climate change are creating more significant challenges for businesses. Data from interos.ai shows, in 2024, 9,800 extreme weather events affected nearly 95 million companies, a 50% increase from the previous year.

Companies in sectors such as energy, healthcare, and agriculture must begin factoring climate risks into their operational strategies. As Andrea emphasized, “The key for businesses is not just mitigating their environmental footprint but also adapting to climate disruptions that could hit their infrastructure. Companies need to look beyond just ESG policies and to proactive action.”

Dave pointed to a large energy company that was impacted by 17 storms and 49 tornadoes in a single quarter, noting, “They had to account for the operational impact of these weather events, and it was a major financial hit.” He emphasized that boards of directors are paying more attention to how climate change affects their business, not only in terms of operations but also in terms of earnings.

Ted added, “Companies need to integrate climate risks into their overall risk management strategy. Catastrophic weather is no longer an isolated issue; it’s a critical part of the risk landscape.”

The message was clear: businesses can no longer afford to treat climate change as a distant threat—it must be incorporated into daily operations and decision-making.

AI and the Supply Chain: Secure AI is Key to Mitigating Risk

Embedding AI technologies in supply chain operations brings both tremendous opportunities and complex associated risks. Ted explained, “Throwing AI agents blindly everywhere across your enterprise is incredibly dangerous. You have to think carefully about the input and output of AI models and secure them at every step.”

AI models that are not carefully managed or securely integrated can introduce significant risks, from misinformation to system failures.

Dave underscored the importance of managing and mitigating security risks, saying, “CISOs today are focusing more on AI risks. You must have visibility into how AI tools are being used across your organization.”

Andrea touched on the gap in global AI governance and emphasized, “We really need democracies to come in and set guardrails for infrastructure and use cases, to allow innovation to flourish and prevent the more harmful effects.”

Dave closed out the session highlighting a key concern in open-source AI environments: “Data chaining is a real issue because when you combine your data with someone else’s, the question becomes: who owns the intellectual property on that data? What risks do you face in terms of the data’s origins?”

By embracing a comprehensive, data-driven approach to risk management, companies can better navigate the complexities of 2025’s supply chain environment.

Catch the full conversation on-demand today:

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Weaponized Supply Chains: Geopolitical Market Risks in an Era of Economic Warfare

Posted on February 14, 2025February 14, 2025 by Andrea Little Limbago

Author: Andrea Little Limbago, PhD, SVP, Applied AI

Over a decade ago, mutual assured economic destruction (MAED) defined the unprecedented interdependence between US and China economies. Based on the growth pace of China’s economy, there was concern that within a decade or two, the power dynamics would shift, and China would no longer be as dependent on the rest of the world as the world is on China.

That scenario may be coming to fruition. The US-China trade war is escalating with a series of tit-for-tat export controls, tariffs, and commercial agreement realignments threatening an accelerated bifurcation of global supply chains.

DeepSeek’s announcement last month, and the subsequent plummeting of US semiconductor stocks, is largely viewed as an inflection point in geopolitical technology competition.

Geopolitical market risks are taking center stage, redefining supply chains, and entering the board room.

Organizations that fail to integrate and monitor these market signals risk extreme shocks as economic warfare reshapes the global economy, corporate technology stacks, and the regulatory landscape.

Global Buyer-Supplier Dependencies

Since joining the World Trade Organization in 2001, China’s exports have increased five-fold and its economy is now eleven times larger. China surpassed Germany in 2009 as the world’s largest exporter and now contributes almost 15% of global exports, followed by the United States with 8.3%. China’s top export destinations are the United States at almost 15% share, followed by Hong Kong, Japan, Germany, and South Korea.

In contrast, the US leads all global importers, with a 13.5% share of global imports, followed by China at 8.8%. Top US import destinations are China, Mexico, Canada, Japan, and Germany.

US goods imports continue to rise, totaling $3.2 trillion in 2022, almost a 15% increase from 202, with China accounting for 16.5% of total goods imports.

In short, China has the upper hand in supply side trade, while the US’ strength lies in its purchasing power.

Those statistics demonstrate extreme interdependency among the economies but mask the underlying retaliatory dynamics.

Since in 2016, over four thousand Chinese companies have been added to various US commercial and financial restrictions. China’s Unreliable Entity List continues to expand, with two new US entities added on February 4th, and unparalleled detentions of corporate executives in recent years, and anti-trust lawsuits against US tech companies.

Moreover, last week’s US tariffs on China were quickly followed by their own tariffs as well as an expansion of control exports on critical minerals used for weapons development, including tungsten and molybdenum.

Critical raw materials affected by the latest tariff-war between the US and China.

Referred to as China’s ‘assassin’s mace’ of economic warfare, it is a continuation of China’s demonstration of power and control over the raw materials the power global technology and weapons systems. The interdependent system decades in the making is undergoing tectonic shifts and wreaking havoc on supply chains ranging from steel and aluminum to AI.

The Growing Convergence of Economic Warfare and AI

At this week’s Paris AI Summit, geopolitics – and not AI technologies – seemed to take center stage.

Governments are doubling down on sovereignty-first AI strategy and national champions following DeepSeek’s announcement. French President Emmanuel Macron contended, “The future of AI is a political stake, of sovereignty and strategic dependence.” US Vice President JD Vance agrees, noting, “We will safeguard American AI and chip technologies from theft and misuse, work with our allies and partners to strengthen and extend these protections and close pathways to adversaries attaining AI capabilities that threaten all of our people.”

Anthropic CEO Dario Amodei called the Paris AI Summit a “missed opportunity”. While stressing AI’s benefit to humanity, it missed the urgent need for democratic societies to lead in the innovation, fully address the security risks, and account for the disruptions.

For instance, DeepSeek quickly jumped to the number one app download, but within days revelations emerged of its publicly accessible database that exposed private data. Additional concerns over its training data as well as censorship over politically sensitive topics in China further demonstrate the AI divide between authoritarian and democratic governments.

The US and China are asserting their supplier side and purchasing power, respectively, across all aspects of the AI supply chain. For instance, the US continues to tighten AI restrictions based on geopolitical affinity with the US.

Despite questions surrounding the efficacy of US export controls targeting AI, they continue to cause disruption to supply chains. In response, the Taiwan Semiconductor Manufacturing Company (TSMC) has decided to halt shipping orders to China unless directly approved by the US, regardless of whether they are on a banned list or not.

In contrast, China continues to ban or limit key high-tech materials to the US that are essential for semiconductors and weapons development. A move that caused shares of those producers to rally following the announcement.

The Shift is On

The potential risk of supply chain bifurcation and realignment is not decades away, but already underway.

In 2023, Mexico surpassed China as the US’ largest importer for the first time in two decades. New supply chain agreements across allies in the Pacific, the Quad’s Supply Chain Resilience Initiative, and Minerals Security Partnership are just a few examples of global cooperative supply chain agreements focused on ally shoring and near-shoring.

In contrast, for over a decade, China’s Belt and Road Initiative (BRI) has been a force for extending economic and political influence, and more recently has shifted to technology transfers and integration. However, the United State’s purchasing power is behind Panama’s recent decision to decline the renewal of an infrastructure agreement with China, striking a blow to China’s hallmark initiative.

As this economic warfare continues to escalate – with each side exerting their market powers – companies of all sizes that ignore these market pressures may become collateral damage.

For instance, small and medium businesses may face the largest adverse consequences of the retaliatory tariffs, while tech giants are now thrust into geopolitics over both competition and security concerns.

If the first month of the year is any indication, geopolitical market risks are going to be the redefining feature of global supply chains in 2025 and must be elevated in corporate risk strategies and in the board room.

For more on the geopolitical risk landscape in 2025, download our 2025 Predictions Report:

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interos.ai Announces Inaugural Women in Supply Chain Awards: Nominations Now Open

Posted on February 11, 2025February 11, 2025 by interos.ai

New Awards Recognizes Women Driving Innovation, Leadership, and Resilience in Supply Chain Risk Management – Nominations open until Feb 28, 2025

We are proud to announce the launch of our inaugural Women in Supply Chain Awards. The new award program will recognize outstanding women driving innovation, leadership, and transformation in supply chain, risk management, and procurement.

Last year, the proportion of women in the overall supply chain workforce ticked down by one percentage to reach only 40%, according to Gartner’s most recent report.

“Diversity in leadership is incredibly important to us at interos.ai”, said Yardley Pohl, Chief Product and Technology Officer at interos.ai. “We are proud to report that women comprise 52% of our senior leaders – VP and above – and 44% of our executive team. With this award, we are excited to champion the contributions of women in supply chain risk management. We aim to encourage women in leadership roles in every part of the procurement and risk management industry.”

To celebrate and promote women in supply chain, nominations are now open through February 28, 2025, inviting industry leaders, peers, and colleagues to honor the trailblazing women shaping the future of global supply chains. Self-nominations are also encouraged.

The award categories include:

Woman of the Year: Recognizing a woman who has demonstrated excellence in leadership, innovation, and impact within the supply chain risk management sector.
Young Leader in Supply Chain: Honoring a woman under the age of 35 who is making a major mark in the industry through hard work, innovation, and strategic contributions.

Shortlisted nominees will be announced on International Women’s Day (March 8, 2025), and winners will be recognized at a vibrant awards ceremony at the close of Women’s History Month in March 2025. Candidates will be evaluated on contributions that have led to measurable and meaningful change on her team, her organization or the industry at large, particularly those that positively affect women’s advancement in supply chain.

Additionally, the 2025 Woman of the Year will receive one year of interos.ai’s supply chain risk intelligence software to donate to the charity or non-profit of her choice, reinforcing the commitment to fostering ethical, resilient, and secure supply chains worldwide.

More details will be shared along with the announcement of the shortlisted candidates on International Women’s Day. Nominations are currently open now through February 28, 2025.

Submit a Nomination

Retaliation and Economic Uncertainty: The High Stakes of Trump’s Tariff Policies

Posted on February 4, 2025February 4, 2025 by Andrea Little Limbago

Author: Andrea Little Limbago, PhD, SVP, Applied AI

Not with a Whimper, but with a Bang

The rules-based system and international collaboration that has guided the global economy for decades – and quite possibly produced the greatest reduction in worldwide poverty in history – may have come to an end.

With the strike of a pen, the United States is implementing 25% tariffs on allies Mexico and Canada (10% on Canadian energy), coupled with a 10% tariff increase on China.

The delay and uncertainty around the timing and implementation of the tariffs adds an additional level of disruption, that if comes to fruition, would likely mark the end of a global economic system that already was feeling the weight of trade wars, geopolitics, and import controls.

However, this is not simply continuity of the shifts underway since the beginning of the U.S.-China trade war almost a decade ago. The tariffs are an escalation of trade barriers aimed at the U.S.’ top three trade partners, but also two of its closest allies. In fact, President Trump has identified other U.S. allies – the European Union and United Kingdom – as potential upcoming targets of tariffs as well. This is a dramatic shift from the ongoing re-globalization of the global economy and supply chains along geopolitical fault lines and is a much more aggressive adoption of the economic nationalism and the mercantile policies that undermined globalization almost a century ago.

Supply Chain Disruptions, Again

Geopolitics has driven the global restructuring of supply chains, leading to the expansive and unprecedented implementation of industrial policy. However, ally or friend-shoring remained at the heart of this restructuring, with both the U.S. and China building out their economic spheres of influence along with like-minded countries.

These tariffs – if fully implemented – would be a huge blow to post-World War II alliance structures.

Moreover, the tariffs come at a time when China is shaking up the AI and technology landscape and is strengthening collaboration with many of the U.S. geopolitical adversaries.

Given the hyperspecialized, complex, and geographically dispersed nature of supply chains, one country alone cannot simply provide all parts and components for emerging technologies, let alone less strategic industries.

At a time of heightened strategic competition and technological shifts, the tariffs would introduce yet another major disruption to supply chain risk. As the next section details, given the size of the trade flows, very few companies will be immune from the impact of these tariffs.

Products and Industries at the Greatest Risk

The 25% tariff impacts goods flowing into the U.S., serving as a tax on the price of these goods domestically. Based on trade data from Canada and Mexico combined since January 2024, and leveraging interos.ai’s product and industry categorization that are based on self-attestations of a company’s industry and products, the following tables highlight the key products and industries at risk across the 10.5 million number of import shipments into the US.

The major industries impacted range from software and IT to retail and banking and financial services, while products generally include underlying components such as plastic, rubber and iron and steel, indicative of the economy-wide impact of the tariffs.

Both Mexico and Canada have vowed retaliation, and highlight similar dependencies across industries and products, demonstrating the hyperspecializing and interdependency of the three economies.

In contrast, the major industries and products impacted by the additional 10% tariffs on Chinese imports highlight a consumer-facing impact as well, with consumer goods and retail among the top industries impacted, although industrial equipment and construction clearly demonstrate the diverse range of industries that will be affected.

The top 10 products imported by US companies from Canada and Mexico make up over 40% of all 10.5 million shipments in total.

Preparing Supply Chains in a Volatile Setting

As of this writing, the tariffs on Mexican and Canadian imports are delayed one month, in return for additional troops along the border. There is no word yet on a similar delay to those imposed on China. The shifting nature adds to global uncertainty, which only fuels greater risk and market fluctuations.

The only certainty here is on-going change and disruption, as these tariffs upend decades of rules-based order that has driven globalization and supply chains.

Across the globe, markets fell in response to the weekend’s tariffs news and impending trade war expansion.

For supply chains, decisions made now often take years, not minutes, to implement.

Whether or not to shift operations, for example, has a long-term impact and therefore this growing uncertainty is forcing many to reassess their global footprint amid such potential shifts.

Overhauling supply chains, yet again in some cases, is expensive and time intensive. The unpredictability presented by the tariffs only adds to supply chain risks, especially in geographies until very recently deemed stable and less risky.

From higher prices to operational disruptions to economic shocks, interos.ai is closely monitoring the situation and how it is impacting supply chains and the global economy.

For more on our take on how geopolitics, tariffs, trade, cyber and poised to wreak havoc on supply chains in 2025, read our latest report.

Get your copy of the 2025 Supply Chain Predictions Report Today:

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