Tue, 27th Oct 2026

In part one of this series, we explored how climate events, rising logistics costs and labour shortages are disrupting manufacturing operations. However, physical supply bottlenecks are only half the story.

Beyond those operational hurdles, consumer-goods brands are navigating an intensifying competitive landscape where price-competitive Chinese manufacturers are putting pressure on established players in the mid-market. Simultaneously, rising trade restrictions and export controls on essential inputs like fertilisers and fuels are injecting deep uncertainty into sourcing strategies. Unable to simply pass these compounding costs onto cautious consumers, companies must urgently prioritize supply chain diversification and brace for aggressive shifts in global trade policy.

For risk, supply chain, and operations leaders managing complex multinational networks, these geopolitical shifts are immediate vulnerabilities, not just distant headlines. A sudden tariff or a tightened export control can instantly sever a critical sourcing route or stall market access entirely.

In part two of this series, EIU’s team of experts have identified five additional geopolitical and market-access risks that leaders must closely monitor to safeguard their networks.

1. Trade and policy uncertainty is increasing

With the US administration of Donald Trump using tariffs as an economic and political weapon, geopolitical tension and fast-changing trade policing are making investment and sourcing decisions harder. Manufacturers and retailers remain exposed to changes in tariffs on goods from important sourcing markets.

Uncertainty can delay investment and expansion. It can also produce sudden cost increases when governments introduce, revise or extend tariffs. Companies with long supply chains or low margins are particularly exposed.

2. China is extending its export controls

Since the start of the US-Israeli conflict with Iran, China has tightened controls on refined petroleum products, diesel, aviation fuel and fertilisers. It introduced export-licensing regimes for some critical minerals in 2025 and has tightened restrictions when relations with trading partners, including Japan, have deteriorated.

For manufacturers dependent on Chinese inputs, this creates a risk that political disputes turn into supply shortages. China remains an important source of intermediate goods despite attempts by multinationals to diversify their suppliers. Its central position in global supply chains brings efficiency but also exposes manufacturers to tensions in China’s relations with the US and Europe.

3. Other countries also resort to export restrictions

Other governments are also turning to export controls to improve food security or combat shortages. For example, India banned wheat exports in 2022 after Russia’s invasion of Ukraine pushed up prices and has periodically restricted rice exports. Such measures fragment commodity markets and reduce access to cheap supplies. Poor harvests caused by El Niño could prompt further export bans, subsidies or other intervention.

4. Chinese demand and market access are more uncertain

China is seeking to reduce its dependence on imports and strengthen domestic producers by increasing barriers to entry. Since mid-2024 it has opened anti-dumping investigations into European pork and dairy products and imposed tariffs of between 15.6% and 62.4%, depending on the product, partly in response to European tariffs on Chinese electric vehicles. Foreign companies also face formal and informal barriers to market access, including restrictions imposed during trade disputes or on security grounds.

Agricultural imports have fallen from their peak in 2022 as domestic harvests have improved and Beijing has put more emphasis on food security. Commitments to buy US agricultural goods, under the US-China trade deal, could divert Chinese demand away from suppliers elsewhere. FMCG manufacturers that source ingredients from China or sell there face greater uncertainty over both supply and market access

Chinese manufacturers also pose a growing competitive threat. We expect them to become more competitive by 2028-30, helped by dense industrial clusters, government support and cheap finance. China’s manufacturing base may also leave some domestic producers better placed to absorb supply disruptions than foreign rivals.

5. Regulation and compliance are complex

Product-safety rules and compliance costs are becoming more onerous, while the rules-based trading order established by the World Trade Organisation is breaking down. Exporters must meet different standards across markets, while sourcing from emerging markets can expose them to quality problems. Differences in enforcement also cause delays.

Legal advice, audits and changes to products or processes weigh particularly heavily on smaller companies. Enforcement may become stricter over the next six months as governments respond to concerns about consumer safety, including those surrounding cheap imported goods. With frequent trade disputes making it harder to establish global standards, we see the emergence of smaller cross-country groupings as one route forward

Consumer-price inflation in important FMCG markets

Click to expand

Consumer-price inflation in India, Turkey, America and Japan since 2020 illustrates the pressure on manufacturers. India and Turkey have experienced relatively high and volatile inflation, driven in part by currencies, energy prices and supply shocks. Inflation in America and Japan has been more moderate but persistent.

Manufacturers therefore face pressure from both sides: raw-material, labour and logistics costs remain high, while weak consumer demand and cheap competition limit their ability to pass those costs on. Some companies are therefore resorting to other tactics to protect margins without raising headline prices. In India, for example, some companies have cut package weights or bottle sizes. Such “shrinkflation” may hurt brands and attract regulatory scrutiny.

Summary

As geopolitical turbulence and trade fragmentation complicate global markets, manufacturers face greater difficulty in making long-term investment and sourcing decisions. Safeguarding profitability requires proactive supply-chain regionalisation, rigorous scenario planning around tariff escalations, and constant monitoring of shifting regulatory and export controls. Building resilience now will determine which brands sustain market position as global trade barriers continue to rise.

Executive guide: Navigating China’s expanding sphere of influence

Rising trade protectionism, shifting export controls, and market access barriers are adding unprecedented friction for multinational manufacturers. Download our executive guide, The new order: navigating China’s expanding sphere of influence, to explore how China’s expanding presence in capital, technology, and infrastructure is creating a more multipolar business environment, and gain practical insights to help assess supply-chain interdependencies and diversification options.