Tariff turmoil is making supply chain security riskier
Many businesses around the world are taking the decision to alter their supplier mix in the face of tariff uncertainty, but in doing so are creating more cyber risks for themselves, according to a report
Cyber security remained the most pressing challenge facing those in supply chain management roles during the first three months of 2025, but since the inauguration of Donald Trump in January, uncertainty over the Upresident’s approach to tariffs has caused chaos for supply chains not just in the US, but around the world, and these two areas of risk are closely entwined.
This is according to a report from global business and technology consultancy West Monroe, which found that while security remains top of mind for 23% of respondents to a recent polling exercise, the impact of tariffs has surged to become the top issue for 20%, in a matter of weeks edging out factors such as geopolitical tension, material costs, the climate crisis and labour costs.
Although its fieldwork was conducted in March, prior to Trump’s so-called Liberation Day tariff announcement, West Monroe’s data shows that during Q1, a significant number of organisations in the US started making changes to their supply chains in advance.
A total of 58% said they altered their product, materials or sourcing mix, 56% altered their transportation mix, 45% altered their production schedule, 31% updated their pricing to pass increased costs to customers, and 28% altered their geographic presence. “I don’t think these are necessarily quick changes to make, but there is cyber risk if and when those changes are made,” said Christina Powers, cyber security partner at West Monroe.
Broadly, she said the need to move quickly to replace lost revenues, shifts in the supplier ecosystem and other impacts arising from the tariffs may create gaps in best practice when it comes to supply chain management.
“For example, if you’re starting to work with a different supplier – maybe they were already on your list but they weren’t a tier one supplier, you’re tapping into tier two suppliers – so maybe they went through less due diligence and less scrutiny when you were initially onboarding them,” said Powers.
“Or if you’re looking to change suppliers now, there could be a little more of a rushed diligence process being done to try to make that change more quickly,” she said. “There could be less visibility into what potential access these companies may have. From another angle, if you’re not working with a familiar contact, or not working with familiar processes, there’s a higher risk of things like impersonation attacks, whether or not that’s for financial gain or to get access to sensitive data.”
Finally, with goods potentially priced higher thanks to the tariffs, some organisations may also look to offset costs in rather more creative ways than simply passing them onto their customers. In some instances, however ill-advised this may be, this could see IT and cyber security budgets taking a hit.
“There is a risk around cyber security which is often viewed as a cost centre,” said Powers. “It is focused on value preservation and risk reduction, but it’s not necessarily value creation per se. So, there could be pushes to offset some of what organisations are having to deal with.”
But the story doesn’t end here, she said, for there are other ways in which cyber security and tariffs are coupled together.
“With a lot of the uncertainty that’s happening right now, there’s a very volatile market,” she said. “From a cyber security perspective, that could lead to incentives for individuals or groups or nation-states to look to exploit vulnerabilities or go after certain companies.
“You may see that nations that were historically friendly [to the US] have different feelings now, so there could be an increase in exploitation.
“On the data side, there could be an increase in potential espionage looking for trade secrets, intellectual property and things of that nature,” said Powers. “There are some Chinese manufacturers exploiting luxury brands and where their goods are being made, and what it takes to produce them.”
Takeaways for cyber leaders
If there’s a core message for security leaders to hold onto during this time of intense economic uncertainty and volatility, it would be not to allow the organisation to lose focus on the integrity of its supply chain arrangements.
“Now is the time to be more vigilant, not only to hold the line, but actually to increase supply chain scrutiny from a cyber perspective, because there is so much uncertainty, change, volatility and, I think, anger associated with this,” said Powers.
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