As the United States inches closer to implementing a new wave of trade tariffs – changeable though they may end up being – a sense of déjà vu is creeping into boardrooms across Australia and New Zealand (ANZ).
While headlines might focus on Washington, D.C., and Beijing, the repercussions will not be confined to North America or Asia—they are already beginning to reverberate through ANZ markets, particularly in the supply chain and logistics sectors.
At Blue Yonder, we’re seeing rising concern among our customers and prospects. It’s not just about if tariffs will be enacted, but what happens next. The uncertainty is paralysing decision-making across industries, especially among exporters, manufacturers, and logistics service providers (LSP). Uncertainty creates instability, which is never a good sign for the economy.
While it seems the U.S. government is open to more negotiation on final terms, it also appears fairly clear that we will be subject to at least some form of trade tariffs. So, what happens IF and WHEN ANZ are subjected to a new market playing field, and what effect will this have on local business?
Tariffs and the domino effect
The first domino to fall in this scenario is confidence. Businesses are wary of committing to capital investment or innovation while the rules of global trade may be about to shift dramatically. If you’re a manufacturer exporting to the U.S., or an LSP servicing cross-border trade, the potential for retaliatory tariffs or prolonged trade disputes poses a direct threat to both margins and viability.
This kind of volatility isn’t theoretical. Australian exporters still remember the sting of Chinese tariffs on wine and seafood that occurred in 2020. Overnight, entire industries were thrown into survival mode. The live lobster industry lost as much as $50 million overnight as tonnes of exported produce sat impounded at Chinese airports. For more than three years China imposed tariffs of more than 100% on Australian wines. Despite the eventual lifting of restrictions, the damage had been done. Many wineries never recovered.
Supply chains under pressure
For logistics and supply chain operators, the challenge is twofold: managing unpredictability and maintaining efficiency. If tariffs slow down international trade, as they are likely to do, we can expect reduced shipping volumes. This leads to either delayed shipments while waiting for full container loads or potential increase per-unit costs if ships run under-capacity, and depending upon the length of the tariffs, a possible drop in overall shipping costs as the international freight service companies struggle for market share. All scenarios put pressure on already thin margins.
Moreover, we could see a domino effect across the entire supply chain. Tariffs increase the cost of goods, which leads to shifts in sourcing strategies, which in turn can cause bottlenecks or imbalances in global freight flows. The end result? Less reliability, higher costs, longer lead times, and more complexity for supply chain planners to navigate.
Multi-shoring becomes mission critical
One response we are already seeing among global manufacturers is the acceleration of multi-shoring—a strategy to diversify manufacturing locations to reduce exposure to any single country. This was a trend born out of COVID-19-era shutdowns, and now it’s being reinforced by geopolitical tension.
For ANZ-based firms or multinationals with operations in the region, the imperative is clear: evaluate your sourcing and manufacturing footprint now. Those relying heavily on U.S.-China trade flows are particularly vulnerable. Transitioning to multi-shoring introduces new costs across labour, regulatory compliance, and logistical complexity, but the cost of inaction could be far greater.
Cautious optimism – if you’re prepared
There’s also a narrow window of opportunity for those ready to act. Countries like Australia with existing Free Trade Agreements (FTAs) may find themselves in a favourable position if exporters from tariff-hit economies seek out new markets. For example, if Chinese exporters face barriers in the U.S., they may shift toward Australia, potentially lowering the cost of imported goods and creating modest disinflationary pressure locally.
Some economists even suggest Australia could see a brief period of low inflation in 2026 due to this dynamic. But let’s be clear: there’s a razor-thin line between disinflation and recession. If business confidence continues to erode and manufacturers cut back on production or staffing to preserve cash reserves, the broader economic consequences could be profound.
Invest now or fall behind
If history has taught us anything – from the Great Recession, Global Financial Crisis through to COVID-19 – it’s that those who continue to invest during uncertain times come out leaner, more agile, and better positioned to serve customers when the dust settles. Supply chain leaders must resist the urge to freeze. Instead, use this moment to optimise your value chain, enhance visibility, and build the flexibility needed to navigate whatever comes next.
Ultimately, the global economy is entering another phase of fragility, and ANZ is not immune. Though we have weathered multiple storms in recent times, the reality remains that tariffs must be signed in Washington D.C., and their shockwaves will be felt all the way from Auckland to Adelaide. The question is: will your supply chain be ready?
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