Media Focuses on Supply Chain Geopolitical Risk

- The "reshoring" trend is accelerating, with over 1,800 companies bringing production back to the U.S. by 2022, creating an estimated 350,000 jobs. This movement is driven by a desire to increase supply chain resilience and reduce reliance on overseas manufacturing. A 2022 survey of manufacturing executives revealed a significant shift in priorities, with 73% now prioritizing resilience and responsiveness over pure cost efficiency, a notable increase from 32% in 2019. - Escalating trade tensions in 2025 have seen the U.S. impose tariffs of up to 145% on Chinese goods, with China responding with tariffs of up to 125% on American products. These actions have significantly disrupted bilateral goods trade. Despite these tariffs, the U.S. trade deficit in goods reached a record high in 2025, with companies shifting their sourcing from China to other countries like Vietnam and Mexico rather than bringing production back to the U.S. - Regulatory pressures are mounting for manufacturers, with the SEC introducing new guidelines effective for fiscal years starting after December 15, 2025, that mandate enhanced disclosure of supply chain risks that could materially impact inventory valuation. While the SEC's March 2024 climate disclosure rules do not require full Scope 3 (supply chain) emissions reporting, they do mandate disclosure of material climate-related risks within the value chain. - New regulations on critical minerals are set to impact supply chains, particularly for batteries used in electric vehicles and grid storage. The EU's Critical Raw Materials Act sets targets for local extraction (10%), processing (40%), and recycling (25%) of strategic raw materials. In the U.S., the TRACE Act, introduced in April 2024, aims to increase transparency in the battery supply chain by tracking composition, sourcing, and carbon footprint. - Internal audit functions are adapting to address geopolitical risks by incorporating scenario planning for events like political instability, sanctions, and trade barrier shifts into their audit plans. There is a growing emphasis on a holistic view of geopolitical risk, recognizing that its impact extends beyond direct supply chain disruptions to macroeconomic conditions and financial markets. - In July 2025, OSHA proposed a series of deregulatory rules, including a clarification of the General Duty Clause that would limit citations for hazards considered "inherent and inseparable" from a specific job. Other proposed changes involve rolling back or revising standards deemed outdated or duplicative. Additionally, in March 2025, the EPA announced a 90-day stay on compliance provisions for air regulations at iron and steel manufacturing facilities. - A significant number of U.S. manufacturing executives are actively considering or have already implemented nearshoring or reshoring strategies. One survey found that 92% of these executives had contemplated such moves. For U.S. companies, Mexico has become a popular nearshoring destination due to lower manufacturing costs compared to China when factoring in freight, exchange rates, and inventory expenses. - The role of the manufacturing CFO is evolving from a focus on cost control to strategic leadership, with a greater emphasis on enterprise risk management, digital transformation, and navigating economic volatility. Key challenges for these financial executives include managing cash flow, balancing strategic investments with cost efficiency, and addressing talent shortages in the finance function.