Twenty-nine percent of production costs impacted by new tariffs in 2025

Supplier, material, and distribution costs are amongst the most affected.

New global tariffs announced in 2025 are impacting 29% of production costs in supply chains, a McKinsey survey showed.

The impact is most pronounced in supplier and material costs, cited by 39% of respondents, followed by distribution costs at 24%.

Of respondents, 82% said their supply chains are affected by new tariffs, with 20 to 40% of their supply chain activity impacted in some way, it said.

The top industries impacted by the new tariffs are the consumer at 43%, infrastructure at 36%, and high-tech at 31%.

The automotive industry recorded the lowest impact at 19%.

McKinsey said that its annual survey of global supply chain leaders studied the evolution of risk management and resilience measures through disruptions, such as COVID-19 and the conflict in Europe and the Middle East.  

Here’s more from McKinsey:

“For 2025, one issue is top-of-mind among the 100 companies in our survey: the potential impact of tariffs on many of the world's most significant trade flows. Of respondents, 82 percent said their supply chains are affected by new tariffs, with 20 to 40 percent of their supply chain activity impacted in some way.

That impact played out across supply chain activities, with 39 percent of respondents seeing increases in supplier and material costs, and 30 percent reporting reductions in customer demand.

Supply chains with a US connection were most likely to feel the effects, with 70 percent of respondents saying tariff impact on US customer demand was greater than or equal to impact on demand elsewhere.

Among industries, consumer goods companies reported the highest impact, with tariffs affecting 43 percent of supply chain activities.”