Tarriff fears trigger US stockpiling in August as manufacturing weakens in Europe, Asia

Asia manufacturers cut purchases.

GEP Global Supply Chain Volatility Index slipped to -0.39 in August from -0.35 in July, signalling rising spare capacity as global supply chain activity cooled.

The global figure, which was based on a monthly survey of 27,000 businesses, concealed stark regional contrasts. North America was the outlier, with supply chains running close to full capacity as companies in the continent stockpiled raw materials and components to protect against tariff-driven shortages and delivery delays.

This was particularly true for the US consumer goods sector, which includes industries such as food & beverages and household products.

By contrast, Asia’s index fell to a three-month low as purchasing activity weakened in China’s consumer non-cyclicals sector, although the region’s weakness was predominantly across Japan and Taiwan.

Europe also deteriorated, with Germany’s basic materials sector faltering and UK manufacturing plunging deeper into contraction.

The index (-0.90) signalled one of the steepest declines since 2024.

“It’s now clear that tariffs have neither spurred growth nor triggered collapse,” said Michael DuValle, GEP’s global head of supply chain strategy. “Tariff uncertainty is no longer temporary; it’s structural reality in the supply chain. Companies need to manage it by reinvesting in resilience, diversifying suppliers, and building critical capabilities like demand sensing to make faster, smarter decisions.”

In Asia, the index fell to a three-month low, indicating rising spare capacity across the region’s supply chains as purchasing volumes in China remained flat. Meanwhile, South Korea, Indonesia, and especially India experienced increased factory procurement activity.

In North America, supply chains are nearly at full capacity, with recent orders being fulfilled and companies adding to their inventories. Conversely, Europe’s index declined again as factories purchased fewer intermediate goods and began destocking, highlighting the fragile state of the continent’s industrial recovery.