The Tariff Effect: Rethinking Risk in a Fractured Trade Environment
… Risk Tariffs rarely hit businesses in a straight line. Instead, they set off chain reactions that cross functions: supply chain, finance, legal, and risk management. A 25% duty on steel, for example, doesn’t just raise the cost of raw materials-it slows procurement, forces design changes, squeezes contractor margins, and delays delivery. A retaliatory tariff on pharmaceuticals might disrupt ingredient sourcing from a previously stable market, forcing emergency procurement or production shutdowns. These scenarios introduce multiple layers of risk: Supply chain volatility: new vendors, longer lead times, quality control issues Marine cargo disruption: increased risk of port congestion, shipment
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