In the wake of the most extensive series of U.S. tariff increases since the Great Depression, a newly published study from Michigan State University sheds light on how the 2025 trade shocks are reverberating through global supply chains. Featured in the Journal of Supply Chain Management, the research provides a timely theoretical framework designed to help both scholars and policymakers navigate an increasingly chaotic and unpredictable trading environment. As waves of tariffs were imposed, repealed, and reinstated within months, firms around the world were left scrambling to respond to a trade landscape marked not only by protectionism but by profound uncertainty.

“Unlike earlier trade disputes, the 2025 actions unfolded with extreme volatility,” said Professor Jason Miller, the study’s lead author and the Eli Broad Endowed Professor in Supply Chain Management at MSU. “We wanted to build a conceptual model that could explain how firms are reacting — and equip others to anticipate what may come next.” The framework developed by the researchers identifies three main categories of costs that shape how businesses react to such shocks: adjustment costs associated with shifting operations; transaction costs from renegotiating contracts or sourcing alternatives; and opportunity costs stemming from decisions made either too hastily or too late. These costs, the study argues, have a profound impact on a firm’s ability to relocate suppliers, change production sites, or pass higher prices on to consumers.

One of the study’s most notable contributions is its incorporation of uncertainty and potential misconduct into the traditional theoretical discourse around trade. In contrast to previous trade conflicts, where policy direction was more linear and stable, the rapid shifts of 2025 left companies unable to rely on long-term planning. Many were forced to prepare multiple contingency plans, unsure whether the tariffs would remain, be adjusted, or disappear altogether. “Some large importers had at least five, even ten, operational strategies sketched out simultaneously,” Miller observed, highlighting just how unstable the commercial environment had become.

While the research is grounded in supply chain management theory, its authors are keen to emphasise the broader human and societal impact of such disruption. Co-author Professor David Ortega, who holds the Noel W. Stuckman Chair in Food Economics and Policy at MSU, pointed to imported foodstuffs as particularly vulnerable. “When trade policy is unpredictable, food prices can climb sharply,” Ortega said. “This hits lower-income households the hardest, especially when products like bananas or pineapples — which are not grown domestically in significant quantities — offer no easy substitutes.” The ripple effects extend beyond consumers, he added, influencing agricultural production choices and triggering retaliatory measures from trade partners.

In addition to its theoretical elements, the paper offers practical guidance for future research, presenting a curated set of data sources to support empirical studies. These include firm-level import and export records, retail price indexes, and sector-specific trade data. The authors encourage analysis of how and when companies relocate sourcing, the extent to which tariffs are passed through to retail prices, how firms front-load inventory ahead of tariff changes, and where misconduct—such as mislabeling a product’s origin—may occur. This toolkit is intended to empower researchers and practitioners to monitor and assess the ongoing transformation of global commerce with greater precision.

Co-author Yao “Henry” Jin, an associate professor at Miami University’s Farmer School of Business, stressed the broader relevance of the framework. “The global supply chain we’ve known — one built on the assumption of relatively free and stable trade — is eroding,” he said. “Our work aims to help both industry and academia navigate this uncertain new world.” As Professor Miller concluded, the implications stretch far beyond academic interest. “These trade disruptions affect everyone, from government officials and business leaders to ordinary consumers,” he said. “Understanding how and why supply chains respond the way they do is critical if we’re to manage the consequences of such shocks more effectively.”

More information: Jason Miller et al, Shock and Awe: A Theoretical Framework and Data Sources for Studying the Impact of 2025 Tariffs on Global Supply Chains, Journal of Supply Chain Management. DOI: 10.1111/jscm.12350

Journal information: Journal of Supply Chain Management Provided by Michigan State University