There’s no better time than the present to look ahead to 2026, as we consider the top supply chain risks that we believe Supply Chain teams will be grappling with.
Before we dive in, let’s grade our performance for 2025 predictions (so far). This time last year, our top three supply chains for 2025 were:
Supply chain restrictions: we’ve got this one absolutely right. Tariffs, counter-tariffs and asymmetrical responses like government investigations have touched every country in the world and have, unfortunately, made Supply Chain leaders’ lives (almost) as stressful as those early days of the Covid-19 pandemic.
Rising reputational risk in Supply Chain: we can take half-marks for this prediction. We expected significant numbers of suppliers to experience heightened reputational risk as a result of polarization of public opinion, combined with ever-present social media. “Doing business with a supplier whom a lot of your customers view negatively would be hard to navigate”, we stated.
While there has been no shortage of companies whose reputation has seemingly been damaged by government actions, consumer views, or their own decisions, this phenomenon appears to have been mostly limited to the larger, multinational businesses. While reputational risk for your average supplier remains manageable, we believe this still warrants a place on Supply Chain’s risk radar.
Greater adoption of Value at Risk (VaR) in supply chain management: Supply Chain executives have long pushed for a way to measure the impact of different issues and crises on the company’s performance. It’s been a long-standing gap, but new technology (yes, including GenAI) and advances in supplier risk assessments may make it easier to assess potential disruptions before they fully materialize. A year later, this still sounds logical.
However, a very sizeable portion of the global supply chain value has been at risk this year. As a result, it is reasonable to infer that organizations have had neither the time nor inclination for any precise measurement of VaR. This fundamental supply chain need is unlikely to go away, but 2026 looks set to continue to bring too much disruption to re-focus Supply Chain executives on VaR.
The verdict? A fair performance. Certainly, we see room for improvement for next year’s predictions.
So, where do we see looming disruption in the year ahead, and which risk types do we believe should be top of mind?
Continuation of tariff-driven supplier price negotiations
After tariffs are applied, there is often a 15-20% (or more) increase in prices of products arriving from a foreign supplier, which begs the question: “How do Supply Chain leaders keep this relationship profitable?” A key step is to understand the financial health of your supplier. How much of the tariff can they realistically absorb? Search for this elusive price equilibrium will endure for most of 2026 – or longer – if tariffs keep changing.
Sourcing paralysis has set in while we remain in this tariff fog. Sourcing is, of course, a process of selecting an optimal supplier out of several candidates. Making prudent, long-term sourcing decisions becomes difficult when you can only make assumptions about tariffs for some potential vendors, but not for others. This sourcing paralysis may temporarily keep customers and suppliers in an uneasy status quo, leading to supplier negotiations that are more adversarial and short-term in their outlook.
If and when there is longer-term clarity on tariffs, we believe sourcing reconfigurations will create two major risks: first, new supplier development; and, second, cast-off suppliers creating alliances with your competitors. New supplier development is likely to be expensive, time-consuming and operationally risky. On the other hand, the old suppliers that were squeezed out due to tariffs will be looking to sell tariff-free to your non-U.S. competitors. This will make it harder for American companies to compete in the rest of the world.
For more information about how Moody’s can help you quantify and manage supply chain risk, please get in touch with the team – we would love to hear from you.