Tariffs, Tensions, and Trade Shifts: Mapping a New Global Order

In this new episode of Supply Chain Deepdive, hosts Michael Jung and Jess Williams unpack McKinsey Global Institute’s recent report, “The Great Trade Rearrangement.” The discussion explores how rising geopolitical tensions and new tariffs, particularly between the U.S. and China, are reconfiguring global trade flows.

The episode introduces McKinsey’s concept of the "rearrangement ratio", a framework for assessing how easily supply chains can switch sourcing partners. Michael and Jess also walk through four strategic responses—reduce, replace, ramp up, or rearrange—that companies and governments can consider to navigate volatility. From Europe’s pivotal role in balancing East-West trade to the looming mismatches in supply and demand for products like electronics, this conversation dives deep into the real-world implications of trade fragmentation and shifting alliances.