Identifying reliance on import and export dynamics
Contained within The Global Sourcing Risk Index, is our ‘Trade Barrier Vulnerability Index,’ which moves beyond conventional trade flow analysis. Using Trade in Value Added (TiVA) data, the index assesses the deeper web of global supply chain interdependence, ranking countries based on their dependence on imported inputs, a key indicator of their exposure to trade disruption. This allows us to identify which country-sector pairings are most at risk in a rapidly changing trade landscape.
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The Global Sourcing Risk Index offers a strategic view of high-risk country-sector pairings across eight key risks, and how procurement leaders can respond with clarity and control.
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Why it matters
While trade barriers are not new, their scale, speed, and strategic use have grown dramatically. Governments are now using tariffs and non-tariff barriers (NTBs), from the US-China trade tensions to the EU’s Carbon Border Adjustment Mechanism, to protect domestic industries, enforce sustainability standards, and gain geopolitical leverage.
For procurement leaders, this means sourcing strategies must be remodeled for continuity and market access, not just for cost. The key challenge is to identify which supply chains are inherently more vulnerable before disruption hits.
What the data reveals about Vulnerability to Trade Barriers in Supply Chains
The Asian Hub Dilemma: Singapore and Vietnam
The two countries most vulnerable to trade barriers, Singapore and Vietnam, illustrate the different forms this risk can take.
Singapore’s world-class economy is built on a re-export model, making it a critical hub. However, this also means its key sectors, like petrochemicals and semiconductors, depend on cross-border flows that are susceptible to disruption from US-China trade disputes.
Vietnam’s risk is the inverse. Its booming manufacturing sector relies on a massive influx of inputs from China to produce finished goods for the US and Europe, making it highly sensitive to policy shifts from both its supplier and its customers.
For full analysis – Read The Global Sourcing Risk Index
Concentration Risk in Tech and Trade
Beyond the top two, a clear pattern of vulnerability emerges across Asia’s tech-focused economies. Countries like Korea, Taiwan, Malaysia, and Thailand are deeply embedded in the global technology supply chain, from semiconductors to consumer electronics.
This specialization has fueled their growth, but it has also created concentrated risk. With over 40% of its exports destined for the US and China, Korea’s economy is highly exposed to geopolitical friction. Likewise, Taiwan’s central role in the chip industry makes it a focal point in the ongoing tech trade, where a single export control can have global ripple effects.
Europe’s Gateway Exposure
Vulnerability to trade barriers is not limited to Asia. In Europe, countries with highly specialized economic roles are also at risk. The Netherlands, home to the Port of Rotterdam, serves as a primary gateway for Chinese goods entering the EU. This logistical importance means that any disruption or tariff imposed on those goods has an immediate and concentrated impact.
Similarly, Spain’s deep integration into the European automotive and aerospace supply chains makes its industrial base highly sensitive to upstream component shortages or downstream tariffs that affect finished products.
Are You Asking the Right Questions About Trade Barrier Vulnerability?
Navigating a world of shifting trade policy requires a proactive and creative approach to sourcing. Use these questions to challenge your team’s preparedness and identify opportunities for competitive advantage.
- Do we understand the true origin of our components? Are we looking beyond the final assembly location to see if critical parts originate in a country that could put us at risk of new tariffs?
- Have we mapped our sourcing strategy against Free Trade Agreements (FTAs)? How can we shift production or sourcing to leverage the benefits of agreements like the CPTPP or USMCA to mitigate risk and reduce duties?
- Have we explored tariff engineering? Could we redesign a product, adjust its material composition, or change its shipping configuration to have it reclassified under a lower-tariff customs code?
