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QIMA's Supply Chain Signals provides the critical intelligence you need about the global trade and sourcing landscape. This report decodes macro and industry-level trends, equipping brands and retailers with actionable insights from QIMA experts on the ground to anticipate emerging supply chain risks and opportunities.

EXECUTIVE SUMMARY

The state of global trade and sourcing in H1 2025

• Trade uncertainty at historic highs as U.S. tariffs shatter early-year optimism

• Europe displays economic resilience, with manufacturing and consumer confidence in recovery

• Sourcing and shipping disruptions likely as supply chains navigate the volatile trade environment

• Key consumer product sectors feel pressure to accelerate diversification

• Brands and retailers face increasing demands for sustainability, traceability and circularity

Supply Chain Researcher Perspective

“The U.S. economy demonstrated remarkable resilience through the first half of 2025, even as the global trade landscape shifted due to U.S. tariffs and real and perceived threats. A significant source of upcoming uncertainty stems from the implementation of reciprocal tariffs, which are set to take effect on August 1. Supply chain providers are closely monitoring developments, as international freight volumes may decline and nearshoring initiatives gain momentum to reduce tariff exposure." Cathy Morrow Roberson, Supply Chain Writer and Researcher

Global Trade Landscape

Consumer goods trade: prospects dampened by uncertainty

After a resilient Q1, global trade prospects were battered by a whiplash of policy decisions from April onward. The latest escalation in the Middle East adds a new level of volatility to the market. With trade uncertainty at historic highs, the latest projections expect global trade in goods to contract in 2025 as manufacturers and investors prioritize risk mitigation.

QIMAʼs H1 2025 inspection and audit data highlight the impact of tariff tensions on global supply chains, with international procurement slowing sharply in Q2, particularly among U.S. buyers. However, Southeast Asia stands out as a bright spot, seeing robust growth in manufacturing demand from the U.S., EU, and South America.

Shipping: Q3 ‘25 may bring disruptions

Throughout H1 2025, ocean freight rates have been reflecting demand fluctuations: from the slump in Q1 after buyers finished frontloading on Chinese imports ahead of the U.S. tariffs, to the spike in June as the 90-day tariff pause triggered a surge in demand.

As trade tensions continue, rapid shifts in demand can contribute to further supply chain disruptions on Transatlantic lanes. Meanwhile, European supply chains may be vulnerable to disruptions resulting from the conflict in the Middle East.

Freightos Baltic Index – global (H1 2025 vs. H1 2024)

Manufacturing: recovery in Europe, headwinds in the U.S. and Asia

Despite early-year optimism and temporary tariff-driven boosts, U.S. manufacturing in H1 2025 faced headwinds from inflation and weaker demand.

Growth was dampened in both China and the ASEAN by slumping exports and tariff uncertainty. By contrast, PMI trends in the Eurozone point to a sustained recovery, with production picking up across all four major Eurozone economies.

Manufacturing PMI trends in key production regions: H1 2025

Economic outlook: a slowdown from last year

Amid heightened uncertainty, global economic growth is expected to slow compared to last year, with export-dependent emerging markets especially vulnerable. However, the outlook could improve if major economies achieve lasting resolutions to current trade disputes.

Consumer Confidence and Buying Behavior

Easing of inflationary pressures may be short-lived

Consumer price inflation in the U.S. and the Eurozone declined throughout H1 2025, stabilizing around 2.4% and 2% respectively. In contrast, China has faced mild deflation since February due to weaker demand and “price warsˮ among domestic retailers.

However, the ongoing trade tensions pose renewed risks of inflation in the coming months, as higher tariffs may push up consumer prices and stifle international trade. Economies in the Asia Pacific region are especially vulnerable to such inflationary pressures due to their high trade openness and exposure to U.S. demand.

Trade policy impacts consumer confidence

During H1 2025, consumer confidence remained subdued by persistent uncertainty about economic prospects, but an uptick in June points to renewing optimism. U.S. consumer sentiment, in particular, was strongly affected by concerns about tariffs and trade policy and trended downwards, despite a temporary rebound in May following the announcement of the 90-day tariff pause.

Ipsos Global Consumer Confidence Index

U.S. Consumer Confidence Index (University of Michigan)

Spending trends: good value is king

Sources: Trading Economics, The Conference Board, McKinsey, University of Michigan, Investment Executive

INDUSTRY DEEP DIVE: Textile, Apparel and Footwear

State of the supply chain: H1 2025

The global textile, apparel and footwear sector is grappling with production disruptions, logistical hurdles and cost escalations resulting from the U.S. trade policy moves, while facing mounting compliance pressures.

Challenges

OPERATIONAL IMPACT OF US TARIFFS Supply chain shocks triggered by U.S. tariffs are disrupting the export-oriented textile and apparel industries in key supplier regions, resulting in:

• Stifled growth in emerging economies

• Dampened business and consumer confidence

• Less reliable sourcing landscape for buyers worldwide

MARGIN PRESSURE

Fashion consumers are increasingly price sensitive, and apparel is high on the list of cutbacks consumers make during economic downturn. For brands, this often means having to absorb a significant portion of the extra costs from tariffs and supply chain disruptions.

EVOLVING COMPLIANCE LANDSCAPE

Despite some delays and rollbacks in U.S. and EU sustainability regulations, fashion brands are still under pressure to keep up with a body of supply chain and product laws:

• Safety: the EUʼs General Product Safety Regulation (GPSR) is in force, imposing safety and traceability obligations on all businesses serving the EU market, including direct-to consumer sales and online marketplaces

• Circularity: Extended Producer Responsibility (EPR) programs for the apparel industry are being rolled out in the EU and California, with more jurisdictions to follow

• Traceability: the EUʼs DPP rules will require tracing and disclosing material origin, chemical composition and the environmental footprint of all apparel products for the EU market

Exposure of US textile and apparel imports to tariffs

INDUSTRY DEEP DIVE: Toys and Recreational Products

State of the supply chain: H1 2025

Global toy supply chains are facing significant disruption due to U.S. tariffs, with small and medium businesses especially strongly affected. Experts expect the industry's move from China-dominated to a multi-hub model to be a bumpy ride, with potential loss of specialized manufacturing knowledge and R&D capabilities accumulated by China's production hubs over the past decades.

The diversification game: pick your player

INDUSTRY DEEP DIVE: Electricals and Consumer Electronics

Challenges

PRESSURE TO COMPLY WITH SUSTAINABILITY STANDARDS Starting June 2025, the EU's new eco-design and energy labeling rules apply to smartphones, cordless phones and tablets placed on the EU market, requiring:

• Greater durability of products and batteries

• Prompt supply of key spare parts, and their availability beyond the product's being on the market

• Longer availability of OS updates

• Labeling with information on energy efficiency, battery lifespan, resistance to certain types of damage, and Repairability Score

OPAQUE SUPPLY CHAINS AND HUMAN RIGHTS RISKS Forced labor risks in the electronics sector remain high, with lack of supply chain transparency a major factor. In a recent high-profile benchmarking report, the tech industry scored an average of 20/100 on addressing human rights risks in their supply chains. Additionally, a recent report found that risks of forced labor and child labor can be found in 75% of the global battery market.

QIMA data highlights the connection between opaque supply chains and higher human rights risks in the E&E sector: businesses in this industry report lower supply chain transparency than others, at the same time as critical compliance violations are notably more frequent at factories involved in the manufacturing of electronics and electrical products.

How QIMA Can Help Mitigate Risks

Risk mapping and mitigation solutions

QIMA helps brands turn risk into resilience by combining real-time global alerts, ESG risk mapping, and on-the-ground inspections and audits.

With supply chain risk mapping and mitigation solutions such as QIMA Risk Radar, companies can anticipate disruptions, ensure compliance, and build more transparent, sustainable supply chains—staying ahead in an increasingly complex sourcing environment.