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Category: Global Events

Ghosts in the Energy Supply Chain

Posted on by Lexi Sydow

Authors: Dr. Andrea Little-Limbago, SVP, Applied AI and Mackenzie Clark, Lead Computational Social Scientist

The 90-day tariff détente between the US and China is not the only macro-trend upending global supply chains recently. US officials claim communication equipment and cellular radios not listed in product documentation were found within batteries and solar equipment.  

These inserted components can pose a security risk to critical infrastructure, potentially leading to power blackouts, destabilization, or other damage to the energy infrastructure. 

The revelation of technology supply chain tampering in Chinese-made devices is the latest indication of the growing risk of technology supply chain manipulation. As Chinese President Xi Jinping asserted, “The scientific and technological revolution and the great power game are intertwined.”  

With hyperspecialized and complex technology supply chains at the center of both the global economy and great power geopolitical competition, this is the latest indication that trusted supply chain networks are more critical than ever before. 

Shifting Norms around Supply Chain Security 

In 2018, Bloomberg reported evidence of Chinese tampering of servers that enabled access to data on computer networks. US-based Supermicro was the focus of the investigation, with potential manipulation of their products via supply chain infiltration. The devices were manufactured in Guangzhou, China, where the tampered hardware was found. In sum, approximately 30 US companies were potentially compromised, including major tech giants. No US company nor the government has corroborated this account, but Bloomberg has since produced numerous reports and remains steadfast in their authenticity. 

Regardless of whether this ‘Spy-Chip Gate’ occurred or not, it is indicative of the growing risk of technology supply chain manipulation through one of the many insertion points along the supply chain.  

A new era in these risks emerged last fall with the pager attacks targeting Hezbollah. Explosives planted in pagers and walkie talkies killed dozens and injured thousands, representing an inflection point in lethality and shifting norms around supply chain security.  

While the front companies and tampering were not new, the extensive lethality and complexity of the operation was. As noted cybersecurity expert Bruce Schneier wrote, these attacks have changed the world forever. Supply chain resilience and trusted networks are crucial, especially in technology supply chains that are targeted for geopolitical objectives. 

Emerging Technology Infiltration & Propagation Effects 

Section 154 of the 2024 National Defense Authorization Act (NDAA)  prohibits Department of Defense acquisition from specific Chinese battery manufacturing companies by 2027. These companies are front and center of this recent claim reported by Reuters. As interos.ai analysis highlights, these companies extend deep within utilities, automotive, and electronics industries.  

The companies referenced in the Reuters report align with those companies restricted under Section 154, and include:   

  • Contemporary Amperex Technology Company, Ltd.  
  • BYD Company, Ltd.  
  • Envision Energy, Ltd.  
  • EVE Energy Company, Limited  
  • Gotion High Tech Company, Limited  
  • Hithium Energy Storage Technology Company, Limited  

These six companies alone directly supply almost 1000 companies, over half of which are in the United States, followed by India, Mexico, Germany, and China. These direct customers include companies concentrated in the following five industries:   

  1. Vehicle Manufacturing  
  2. Electronic Component Manufacturing  
  3. Computers and Computer Peripherals Manufacturing and Sales  
  4. Automotive Dealers  
  5. Utilities  

Among these companies include major manufacturers and distributors of vehicles electronics, most of which have been observed as customers of at least one of the Section 154 suppliers at least once since the beginning of 2024 in interos.ai data.   

When expanding this analysis out to Tier 3, the impact of the restricted Section 154 companies becomes much more far-reaching.  

interos.ai Identifies Over 47 Million Buyer-Supplier Relationships as Vulnerabilities in Extended Supply Chain 

Across three tiers of supplier relationships, interos.ai data identified over 47 million supplier relationships with almost 3.2 million unique customers that could be exposed to the products supplied by these high-risk Chinese suppliers. 

Again, these customers are primarily concentrated in the United States, but companies across the globe are also at risk of exposure:  

  1. United States (35% of Tier 1-Tier 3 customers)  
  2. United Kingdom (7%)  
  3. India (6%)  
  4. France (4%)  
  5. China (3%)  

These Tier 1-Tier 3 customers include companies concentrated in a variety of industries: 

  1. Consumer Goods  
  2. Business Management and Legal Services  
  3. Software and IT Services  
  4. Architectural, Engineering, and Design Services  
  5. Building and Civil Engineering Construction   

Trusted Networks and Minimizing Supply Chain Risk 

As noted, these companies are already on NDAA Section 154 due to the security risk within such significant emerging technology produced in China. While this Section 154 targets companies partnering with the US government, as this latest incident highlights, all companies should heed these risks.  

With geopolitical competition at the heart of the technological revolution, ‘know your supplier’ is more important than ever, but so too is knowing their extended supply chain.  

From the software and hardware bill of materials to ongoing regulations and restrictions regarding risky technologies, there is both the regulatory and the security momentum pushing organizations toward trusted networks. From drones to 5G, strategic decoupling and derisking of technology supply chains has been ongoing for years. Solar inverters may have not been immune to this decoupling. In 2019, the US banned solar inverters from Huawei, while Europe recently explored a ban on Chinese inverters due to perceived security risks. Of course, with Chinese solar companies’ enormous grip on the market, decoupling is easier said than done. 

Nevertheless, global technological bifurcation is already well underway; if anything, the insertion of rogue devices found in Chinese batteries and solar inverters will only accelerate it. As corporate and government technology stacks restructure to gain greater security, supply chain visibility and trusted networks must be front and center of these strategies. 

interos.ai continues to track the growing list of restricted companies – ranging from emerging tech companies to those linked to unethical labor – and helps our customers quickly identify these risks in the extended supply chain.  

As these emerging technologies continue to permeate all aspects of society, it does not come without risks. Given the scope of risks, they are simply too complex and unwieldy to manage alone. Trusted networks have always been an important part of supply chain security. In this new era, they are indispensable. 

How secure is your supply chain?

When Borders Collide: The India-Pakistan Conflict and Its Global Trade Fallout

Posted on by interos.ai

The long-standing tension between India and Pakistan has taken a critical turn as military actions and retaliatory strikes escalate in the disputed region of Kashmir. This conflict has reached levels not seen between these two countries for decades.  

In this analysis, we examine not only the volatile timeline of recent events but also deep dive into the economic stakes – how a breakdown in the current truce could disrupt trade in Kashmir, India, and Pakistan. 

Escalating Military Tensions and a Fragile Truce 

In early April, a deadly militant attack in Pahalgam, Indian-administered Kashmir, claimed the lives of 26 Hindu tourists. The incident immediately set off alarms in an already tense region and led to a sharp escalation between the two nuclear-armed neighbors. On May 3, Pakistan test-fired missiles, pausing direct trade between India and Pakistan in a climate of heightened alert. 

Matters intensified when, on May 7, India launched missile strikes against targets in Pakistan and Pakistan-administered Kashmir, declaring that the strikes were aimed at “terrorist infrastructure.” The death toll rose rapidly with Pakistan reporting 31 fatalities as part of India’s retaliation. In these conditions, airspace closures and cross-border missile and drone deployments further underscored the narrow line between a controlled engagement and a full-blown conflict. 

A cautious sense of relief emerged on May 10 when a truce was declared, brokered by the US Government and the Trump Administration, followed by the first night without any firing incidents on May 12.  

However, the underlying tensions remain, and with every pause in violence comes a stark warning: if the fragile truce breaks, the economic and human consequences could be immense. 

Kashmir: A Disputed Area Under Siege  

Kashmir isn’t just a geopolitical flashpoint – it’s also a burgeoning economic hub with a rich artisan background. According to interos.ai, companies in Kashmir have been involved in over 71,227 shipments since January 1, 2024, with 3,786 companies from around the world purchasing goods from the region.  

While companies across a wide footprint of industries stand to be impacted by this conflict, interos.ai data highlights that the industries most impacted by a disruption in exports from Kashmir encompass consumer goods and retail.  

Industry Concentration of Companies (Global) Buying from Kashmir Companies: 

  • Consumer Goods: 4.9% of the overall trade profile  
  • Apparel Retailers: 4.1% 
  • Supermarkets, Department Stores, and Other Retailers: 3.7% 
  • Retail, NOS: 3.6% 

Kashmir is famous for handicrafts such as Pashmina shawls and silk. It’s also the sole producer of saffron in the Indian subcontinent – a spice with a storied history and significant market demand.  

The region’s exports are not merely numbers; they represent livelihoods, cultural heritage, and economic stability for an entire community. Disruption to these trade channels, especially in consumer goods and artisanal products, would have far-reaching consequences for both local economies and global supply chains, notably due to the knock-on disruptions to normal operations in India, one of the largest exporting economies in the world. 

Country-Level Trade: India’s and Pakistan’s Global Exports 

India’s Export Landscape 

interos.ai’s knowledge graph contains data on over 5.5 million companies in India, which supply over 540,000 companies globally. Since 2024, these companies have accounted for over 37.6 million shipments.   

interos.ai data highlights the companies most impacted by a disruption in exports from India encompass a wide swath of industries including consumer goods, software, engineering, and manufacturing companies. 

 Industry Concentration of Companies (Global) Buying from Indian Companies: 

  • Consumer Goods: 4.6% 
  • Business Management and Legal Services: 4.4% 
  • Software and IT Services: 3.9% 
  • Architectural, Engineering, and Design Services: 3.7% 
  • Industrial Equipment Manufacturing and Sales: 3.1% 

Most companies that purchase goods from India are located in the United States, making up over 24% of the companies supplied by Indian companies.  Meaning, the United States could feel this disruption keenly if conflict escalates.

Textiles remain a cornerstone of India’s exports – apparel, bedding, linens, and textile furnishings account for over 21% of shipments since 2024. Parts and components that are important for manufacturing finishes goods – rubber parts, plastic parts, and vehicle parts – make up another 10% of India’s shipments since 2024.  

Pakistan’s Export Dynamics 

interos.ai’s data shows a robust, albeit smaller, network involving more than 210,000 companies supplying over 46,000 global businesses, with over 1.9 million shipments since 2024. These global businesses also span a wide range of industries – with apparel producers representing the largest share. 

Industry Concentration of Companies (Global) Buying from Pakistani Companies:  

  • Apparel Retailers: 7.0% 
  • Consumer Goods: 5.8% 
  • Business Management and Legal Services: 5.4% 
  • Textile Manufacturing: 3.5% 

Textile exports dominate Pakistan’s trade profile, with over 70% of shipments comprising apparel, bedding, linens, and other textiles. Most companies that purchase goods from Pakistan are in the United States and the United Kingdom, making up over 22% and 6% of the companies supplied by Pakistani companies, respectively. 

What’s at Stake: Breaking the Truce and Regional Implications 

The critical question remains: What if the current truce unravels? 

  1. Humanitarian and Security Risks: Every escalation brings with it the tragic potential loss of life – not only among combatants but also innocent civilians. The region’s volatile nature coupled with two nuclear armed countries on both sides means that even limited conflict could spiral rapidly out of control. 
  2. Economic Disruptions: Shipping ports have halted as both countries banned imports and access to maritime ports. While the direct impact to trade between the two countries is minimal (less than 1% of India’s total trade volume), a single disruption can cascade downstream through entangled supply chains, escalating in impact. We’ve also already seen Pakistan’s stock exchange halted for an hour, as market rebounds from ceasefire announcements triggered regulatory circuit breakers. Markets remain subject to ongoing geopolitical volatility in the region.  
  3. Global Supply Chain Vulnerabilities: Modern commerce depends on interlinked supply chains. The interruption in goods from regions like Kashmir and India would reverberate across borders – especially affecting countries like the United States, United Kingdom, and emerging tech sectors seeking to leverage ‘Made in India’ initiatives. 

Looking Forward: Navigating Uncertainty in a World on Edge 

The unfolding events highlight the complexities at the intersection of geopolitical tension and global trade. While a brief pause in hostilities offers hope for de-escalation, the underlying economic stakes amplify the urgency of a lasting political solution. As decision-makers in both nations weigh security considerations against economic necessities, the world watches – with trade routes, industries, and communities awaiting the next move. 

Ultimately, peace isn’t merely the absence of conflict; it’s a prerequisite for economic stability, cultural preservation, and the sustainable development of entire regions. Maintaining a stable environment is essential for ensuring that regions like Kashmir continue to thrive as both cultural treasures and vital trade hubs. 

Geopolitical instability has the potential to send cascading tremors through our global, interconnected supply chains. 

In a climate of tit-for-tat trade wars with tariffs wreaking havoc on supply chains, managing geopolitical risk is table stakes.  

Get in touch to assess where your supply chains leave your organization exposed to geopolitical risk.  

 

2025 Tariffs Report: Insights to Navigate Trade Wars & Supply Chain Shocks

Posted on by Lexi Sydow

Global supply chains continue to face growing uncertainty and disruption. As President Trump took office in January, Mexico, Canada and China came under immediate scrutiny as the United States top trade partners.  

The US-China trade war escalated with a series of tit-for-tat export controls, tariffs, and commercial agreement realignments threatening an accelerated bifurcation of global supply chains. 

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.  

After a series of on-again off-again tariffs and macroeconomic aftershocks, global trade hangs in the balance.  

What’s caught in the cross-fire? Supply chains.  

How do companies seek stability amid an escalating global trade war?  

How do they minimize risk of $100 million disruptions? 

Read our Tariffs Report Today for Insights into:  

  • Trump’s Tariffs Timeline  
  • Market chaos in 2025 – which countries are facing 32x increases in tariff rates 
  • Magnitude of disruption to critical products like semiconductors, pharmaceuticals, lumber, automobiles and steel and aluminum 
  • Financial fallout and market volatility from “Liberation Day” tariffs 
  • The plight of empty shelves – which markets are already seeing double-digit drop-off in shipments of holiday goods to the US 
  • What actions you can take today to avoid tariff’s wreaking havoc on your supply chains 

Thousands of Companies Exposed to High Financial Risk Following President Trump’s Tariffs

Posted on by interos.ai

Authors: Kate Anderson, PhD, Senior Manager, Network Science and Teddy DeWitt, PhD, Lead Computational Social Scientist 

Markets across the globe crashed in response to last week’s tariffs, erasing more than $10 trillion and causing drops not seen since the beginning of COVID. The turmoil continued on Wednesday, with a series of retaliatory tariff announcements.  

While the White House did announce a 90-day delay in country-specific tariffs, with a corresponding market rebound, these swings in the market are disruptive and reflect broader concerns around an uncertain economy.  

However, the impact is not uniform. Some companies are seeing larger swings than others, indicative of additional financial risk. Thanks to interos.ai’s anomalous returns predictive model, we can leverage market data to identify which companies and industries have a greater likelihood of enhanced financial risk in this era of uncertainty and trade barriers. 

A Tumultuous Financial Market: Tariffs and Trade War  

Last week’s reciprocal tariffs executive order introduced a 10% tariff on all US imports, with steeper rates for dozens of countries, including some of the US’s biggest trade partners.  

While the worldwide 10% tariff went into effect on Saturday, April 5th, this was then paused and for the next 90 days as of April 9th. The tariff rate on China went into effect on April 9th.  

The other promised country-specific tariffs are scheduled to start after a 90-day period. These additional tariffs – impacting 86 countries – disproportionately affect some major US trading partners, including China, India, Vietnam, and Taiwan, with projected severe effects on supply chains and global markets. 

The 10% world-wide tariff and “reciprocal tariffs” on other countries add to those already levied by President Trump earlier this year, including an additional 10% duty on imports from China, a 25% tariff on imported cars, 25% on steel, between 10-25% on aluminum, and import tariffs on a variety of Canadian and Mexican goods.   

The new batch of US import tariffs hits several of the country’s largest trading partners, which interos.ai forecasts will have a dramatic effect on supply chains.  

The initial announcements raised the tariffs on Chinese imports by 54%, to a total of over 64%, with updated announcements increasing rates to 125%.  

Chinese goods represent 16% of US imports, including critical parts and raw materials such as rare earth metals. Other major US trading partners were threatened with similarly large tariffs.  

India’s announced tariff rate rose from 2% in 2024 to 26%. The tariff rate in Taiwan—the source of most of the world’s semiconductors—rose from 1% to 32%. While semiconductors are not currently under tariff restrictions, President Trump has implied that they may lose that exemption. Tariffs on Vietnam—a significant exporter of electronics—are going from 4% to a staggering 46%.

These tariffs have triggered retaliatory measures by other countries: 

  • Canada announced a 25% retaliatory tariff. 
  • European Union reacted with tariffs on a wide range of goods commonly imported from the US. 

These numbers are changing daily, fueling uncertainty and market instability. 

Financial Instability: Identifying At-Risk Industries and Companies 

The reaction of the markets to the tariff announcement was immediate and dramatic.  

On April 3rd, the day the tariffs were announced, the markets experienced a drop of 4-6% —  the largest single-day drop since the pandemic.  

This kind of drop in market price suggests that investors are anticipating future financial instability.  

While the markets rebounded after the 90-day stay announcement on Thursday, investors are still extremely nervous, and markets are likely to experience further big swings in the coming months.

As part of interos.ai’s comprehensive machine learning model for financial risk, the anomalous returns model captures unexpected shifts from expected market behavior.  

Markets often reflect the collective knowledge of investors about the financial future of a company. By including daily market returns in our scoring, interos.ai leverages that collective knowledge to predict financial risk, especially important in identifying which companies or industries may be most affected.

interos.ai uses an algorithm to identify anomalies in return data—companies that experience a larger drop than would be expected given current market conditions and historical price volatility. This indicator was inspired by the Silicon Valley Bank (SVB) banking crisis, when the stock price of SVB experienced an abnormally large decline months before the actual crisis occurred.  

Looking at the overall market certainly highlights the pessimism of the market.  

However, it disguises an important factor — losses are not uniformly distributed across different parts of the economy.  

While some industries experienced large drops in average returns, others saw no drop at all. The table below shows the interos.ai industries that saw the largest drop in market returns last week. Apparel, Manufacturing, and Retail industries saw the biggest hits, followed by Ship Building, Springs, Furniture Manufacturing, Electronic Components, and Freight and Transportation.  

The picture is still more complex than that.  

interos.ai’s Financial Model Shows Over 1,000 Companies Exposed to Abnormally High Financial Risk from President Trump’s Tariffs 

After all, the entire market crashed on April 3rd, and even healthy companies likely took a hit. In addition, some industries are more volatile than others, meaning that what might be a large drop in market price for a metal manufacturer looks very different from what normal looks like in other industries. Our anomalous returns model identifies companies that saw a disproportionate fall in market returns, relative to declines in the rest of the market and relative to historical volatility.  

Context is everything.  

And makes the difference between getting in front of risk or being controlled by the risky fallouts.  While electronics made headlines for seeing a big drop in returns on April 3rd, the data from the anomalous returns model suggests that the drop was not abnormally large.  The electronics market is historically volatile such that we expect returns in that industry to drop with the smallest overall market decline.  

In contrast, metal manufacturing and fossil fuel extraction are extremely stable industries. Seeing a large drop in the market returns for companies in those industries is a huge red flag, even if they are smaller in absolute terms than the drops in electronics.

interos.ai identified over a thousand companies globally that exhibited an abnormally large response to the market shifts.  

These are companies that not only experienced losses, but unexpected losses—losses that are many times larger than would be expected given the overall market decline and are therefore at much greater financial risk. 

Some companies experienced extraordinarily large losses, with the highest of these declines upwards of 50%.  

Unsurprisingly, many of the penalized companies come from countries heavily impacted by the new tariffs, including Canada, Japan, and China. 

Avoiding the Fallout from High Financial Risk 

The uncertainty around the US’s position in the global economy continued this week as some announced tariffs went into effect and others were delayed. 

The global response to the announcements were swift, with retaliatory tariffs levied against US imports and stock markets falling.  

Jamie Dimon, Chaiman and CEO of JPMorgan Chase commented on the risk climate we have entered in his latest letter to shareholders. “The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and “trade wars,” ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility.” 

During such an unprecedented time, supply chain resilience becomes even more critical. To stay afloat in a tumultuous trade war is to stay abreast of the regulatory shifts and to ensure visibility into your supplier dependencies.  

If a critical supplier is buried in your supply chain and is exposed to abnormally high financial risk, you need to know. And you need to know so you can act before disaster strikes.  Underlying market information can help surface growing financial risks.  

interos.ai will continue tracking those companies and industries exhibiting anomalous returns, providing proactive intelligence for our customers as they weather such dramatic micro-economic fluctuations. 

Supply chain disruptions cost financial services organizations $164 million per year on average. 

See your total financial supply chain and act fast on insights:

The End of Globalization…Again? Creative Destruction and the Global Order

Posted on by Andrea Little Limbago

Author: Dr. Andrea Little Limbago, SVP, Applied AI  

The April 2nd tariffs are the latest culprit blamed for the death of the interdependent economic system that began following World War II.  

Much has been written about the immediate impact of these tariffs but there has been much less attention on how these tariffs fit into the broader, macro-trends reshaping the global economy.  

The immediate ‘fog of uncertainty’ disrupting financial markets and supply chains is part of a deeper restructuring that is underway, one which is driven by a generational technological revolution, and the resulting geopolitical competition shaping this new order.  

How We Got Here 

Following World War II, global leaders gathered in Bretton Woods, New Hampshire and created three global institutions to shape the world order: the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade (which evolved into the World Trade Organization).  

The goal was to create an interdependent economic system to promote post-war recovery and international cooperation. As a result, global trade in 2023 was 134 times greater than in the early 1960s, and has shaped what many call the modern era of globalization. 

Since then, there have been persistent rumors of the death of globalization. In the early 1970s, President Richard Nixon ended the Bretton Woods monetary regime and its fixed exchange rate system. 

 While it ended one system, many believe this ushered in the current era of globalization.  

In the late 1980s and early 1990s, the end of the Cold War opened up new markets that were cut off from decades of global trade, leading some to argue this is when globalization truly went global.  

At that same time, the rise of preferential trade agreements (PTAs), such as NAFTA and the EU, sparked concern over the demise of free trade. The 2008 financial crisis, 2018 US-China trade war, and 2020 global pandemic additionally instigated claims of the death of globalization. While extremely different circumstances and rationale, at the macro-level, these conversations are mirror those today on the impact of President Trump’s tariffs.  

In short, globalization has experienced a series of disruptions, expansions, and restructuring over the decades. What arguably makes this time different is the digital and technological revolution, and the tariffs more so reflecting one of many realpolitik-focused responses to today’s geo-strategic realities. 

A New Era of Creative Destruction 

In the late 1930s and 1940s, Joseph Schumpeter coined the term ‘creative destruction’ to refer to the evolutionary nature of capitalism, wherein technological advances make obsolete previous products and processes, leading to significant reallocation and labor market disruptions. He experienced real-world examples of technological disruptions, perhaps most notably Ford’s assembly line as well as the military revolution during World Wars I and II.  

Earlier this year, the World Economic Forum argued that today’s ongoing technology convergence is paving the way for the Fifth Industrial Revolution. At the same time, the WEF noted that the technological revolution requires a reskilling revolution, with 22% of today’s jobs already changing due to AI and big data, while at least 60% will require upskilling in the coming years. 

 This is on par with the job destruction detailed by Schumpeter almost a century ago and may even understate the foundational shift underway thanks to great power politics. As Chinese President Xi Jinping  noted at the National Science and Technology Awards Conference 2024, “The scientific and technological revolution and the great power game are intertwined.” 

Today, the tariff debate is nestled within the broader context of global decoupling along geopolitical fault lines.  

Last year, an IMF study highlighted the shift toward ally-shoring or friendshoring – reorienting supply chains toward allied partners. While nearshoring has garnered more attention, they note that trade distances have grown due to a prioritized focus on like-minded, allied countries. A similar study noted a 7% decline in trade between non-allied countries. Together, the forces of creative destruction and geopolitical competition are creating unchartered territory. 

For decades, just-in-time, lowest cost, hyperspecialized supply chains drove globalization with minimal thought to geopolitics.  Today, geopolitics is playing an outsized role in reshaping the global economy, with recent tariffs simply one of many factors indicative of this transformation. In the United States, the CHIPS Act and Inflation Reduction Act preceded President Trump, and prioritized domestic manufacturing.  

In addition, well before President Trump’s ‘Liberation Day’, China initiated the Made in China 2025 policy, aimed at decreasing reliance on foreign goods and manufacturers. Over the last decade, export controls and industrial policy have further promoted trusted technology networks, sparking a supply chain bifurcation of technologies from drones to 5G to AI.  

Just like the elevation of tariffs, the DeepSeek moment likely will accelerate this decoupling and spark additional AI-focused export controls or bans aimed to promote national technology champions. 

 Tariffs & Global Transformation 

The global economy continues to evolve, with this current era a significant inflection point driven by creative destruction, and the competition to ‘win’ the digital revolution. The tariffs – regardless of the eventual scale and scope– are a symptom of the ongoing global transformation, at times referred to as glocalization. Governments race to adapt to creative destruction and the wave of uncertainty as new policies, regulations, and realpolitik upend existing processes and norms. 

While reciprocal tariffs could be an equalizer, placing US tariffs on par with higher tariffs imposed on US goods, concern grows that they could lead to subsequent beggar-thy-neighbor trade policies that have historically hurt all involved.  

Regardless, they are in opposition to global free trade and tightly entangled with geopolitics (on allies and adversaries alike), leading to a range of knock-on effects. For instance, Kentucky Senator Rand Paul recently referenced years of literature on the pacifying effects of free trade on global conflict, noting, “The more we trade…the less we fight.” Significant academic literature has been devoted to the pacifying effects of free trade.  

In many ways, tariffs are a symptom of the broader global transformation underway. It is essential to assess their immediate impact, but companies seeking greater resilience must view them in the context of a broader transformation to the global economy.  

This transformation is fueled by the technological revolution, and the geopolitical race to establish the governance and institutional structures guiding it.  

We are in the beginning phases of creative destruction, one that is upending all forms of market risk and stability, with tariffs the latest disruption, but certainly not the last transforming the international order. 

To stay ahead of sanctions, tariffs and trade shocks head to our latest launch:   

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

Posted on 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: 

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

Posted on 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:  

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

Posted on 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:  

5 Supply Chain Predictions You Need to Know in 2025

Posted on by interos.ai

2024 was a transformative year – reshaping how we view supply chain risk. Supply chains make the world go round – and can also bring it to a screeching halt.  

Specifically, we saw the nonreversible merging of the physical and digital supply chain.  

Supply chains are not simply the shipping of goods but the underpinning of sharing information. No one will forget how the Crowdstrike outage grounded flights, locked banking transactions and impeded business operations – showing it’s not just a physical supply chain that we need to be concerned with, or how the Hezbollah device attacks showed a sophisticated weaponization of the physical supply chain, signaling a new era of modern warfare.  

interos.ai’s inaugural Predictions Report walks through key highlights from 2024 as well as  markers to be on the lookout for as we move into 2025. 

Geopolitical 

2024 was the year of democracy – there were over 80 elections globally, and half of the world’s population voted bringing global election security to the forefront of cybersecurity and disinformation professionals, worldwide.  

US Sanctions ramped up with more entities being added by the U.S. Department of Homeland Security ‘s Uyghur Forced Labor Prevention Act (UFLPA) entity list, bringing the total to over 100 organizations and more than $3.4 billion worth of goods being reviewed in two years. Separately, though just as significant, the Office of Foreign Assets Control (OFAC) sanctioned the last of the top three Russian financial institutions as part of the U.S. efforts to aid Ukraine in the Russia-Ukraine war.  

Trade, Ports and Labor Strikes 

Labor strikes loomed in Canada, India and the US, with talks resuming for the International Longshoreman’s Association (ILA) in 2025. 40% of goods traded to the U.S. on any given day go through ILA controlled ports with trade increasing 25x since the last full ILA strike in 1977. The economic fallout of a full labor strike could be catastrophic.  

The Baltimore bridge collapse added significant cost and congestion to the automobile, energy and manufacturing sectors as imports were diverted to other ports. Baltimore is the top port in the nation for automobile shipments and a crucial hub for coal exports. 

The ripple effects of damage to just one U.S. port shows the fragility of supply chains and underscores the need for proactive risk management.  

Climate-Induced Supply Chain Disruptions 

Historic storms Hurricane Helene and Milton bore down on the U.S. in 2024 impacting core manufacturing, aerospace, agriculture and medical industries with extended supply chains comprised of over 2 million businesses.  

Supply chains have seen the competitive rise of ESG and sustainability. Global legislation is requiring organizations to focus on ethical and environmental practices or face steep fines and reputational damage. The impending EU’s Deforestation Regulation has upped the ante for businesses to have visibility and eliminate ties to risky products in their supply chains. Globally governments continue to mandate ESG and climate reporting, such as Australia’s recent legislation for climate-related financial disclosures.  

As we look ahead to 2025, two things are certain:  

  • Supply chains are the vast and sprawling connective tissue powering our economy 
  • Eliminating risks in supply chains is more than ad hoc risk management, it is a requirement for healthy business. 

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

Salt Typhoon Telecom Hack Rattles Critical Infrastructure

Posted on by Lexi Sydow

Salt Typhoon: What Happened and Why Does it Matter?  

Salt Typhoon was the “Worst telecom hack in our nation’s history,” Senator Mark Warner, Chair of the US Senate Intelligence Committee.  

Salt Typhoon, a Chinese affiliated hacker group, compromised at least 8 U.S. telecom providers – stealing a large amount of data, including records of government officials and political figures.

The attack was unprecedented in scope and began in 2022. 

The extent of the breach is still unknown, with Cybersecurity and Infrastructure Security Agency (CISA) and the Federal Bureau of Investigation (FBI) saying it would be impossible to predict when the hackers would be fully removed from the systems.

Watch our take on the events below:  

 

Downstream Supply Chain Impact 

Jessica Rosenworcel, Chairwoman of the Federal Communications Commission announced the need for “a modern framework to help companies secure their networks and better prevent and respond to cyberattacks in the future.” 

In our interconnected world, this extends to vulnerabilities in your supply chain.  

Using interos.ai’s data, we see the Salt Typhoon attack impact could ripple out to 3.3 million distinct companies in the extended supply chain of 4 of the largest telecom companies in the US.

We estimate that the affected telecom companies represent a significant portion of the U.S. economy, serving over 350 million wireless customers collectively and generating more than $334 billion in annual revenue.  

If even a fraction of these systems remains compromised, the downstream impact on businesses reliant on secure communications could reach into the tens of billions in economic losses. 

Ted Krantz, interos.ai’s CEO Discusses New Era of Cybersecurity  

“Beyond the immediate blast radius, we must consider the future ramifications. Cyberattacks like this can fuel cascading effects we aren’t yet prepared for—whether that’s enabling more sophisticated surveillance of private citizens or jeopardizing critical infrastructure. Each stolen record costs the economy an average of $169, according to industry data. Multiplied by the potential number of affected individuals, the total economic cost could exceed $15 billion in direct and indirect damages within the next year alone.”

– Ted Krantz, CEO, interos.ai discusses.  

“The FCC’s proposed clarifications and certification requirements are steps in the right direction, but we must also prioritize collaboration between the private sector, regulators, and intelligence agencies to build a modern cybersecurity framework.” 

“This includes leveraging advanced technologies like AI to improve threat detection and response, increasing transparency across supply chains, and fostering global partnerships to address cross-border cyber threats.” 

“The Salt Typhoon attack may be unprecedented in scope, but it is not surprising. We’re in a new era of attacks targeting critical infrastructure.”  

“This is a battle we’ve been preparing for, and one we must pre-empt with innovation and data-fueled risk intelligence.” 

Defend Against Digital Threats

Before disaster hits, Interos’s critical risk intelligence platform helps companies mitigate the financial impacts of multi-tier risks like cyber attacks by continuously mapping and monitoring extended supply chains at speed and scale.  

Learn how you defend against digital threats.