CIPS Pulse Survey Q2 2025: Trade wars and tariffs pushing supply chains to the brink, affecting daily lives - Trade Treasury Payments

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CIPS Pulse Survey Q2 2025: Trade wars and tariffs pushing supply chains to the brink, affecting daily lives

“The alarms are blaring,” warns Ben Farrell, CEO of the Chartered Institute of Procurement & Supply (CIPS). His stark assessment comes as the global supply chain landscape experiences turbulence at levels not seen in recent history. In the shadow of intensifying US-China trade tensions and Middle East instability, the Q2 2025 CIPS Pulse Survey shows sharp increases in both short-term and long-term outlook concerns over the global supply chain. 

The ripple effects are set to hit consumers worldwide, with everything from food prices to pharmaceuticals now in the crosshairs. “We are entering a new era of supply chain risk, where political decisions thousands of miles away directly raise prices at the checkout. From shipping lanes to silicon chips, no category is safe from disruption.” Farrell explains. 

The quarterly survey, capturing insights from 200 senior procurement professionals across seven major sectors and every continent, has established itself as a leading indicator of supply chain sentiment and risks.

Procurement anxiety and consumer impact: Price hikes coming to stores near you

Procurement leaders’ anxiety has reached unprecedented levels according to the survey, which tracks sentiment across government, manufacturing, construction, energy, healthcare, technology, and banking sectors using a consistent 1-7 scale:

“Global procurement leaders are operating in uncharted waters,” Farrell says. “It’s no longer a question of ‘if’ disruption happens, it’s about preparing for when and where.”

However, what makes this quarter’s findings particularly troubling is the breadth of categories facing significant price increases. Six major sectors now expect input cost rises exceeding 10%, up from just three sectors in the previous quarter.

These increases will inevitably cascade through supply chains. Shipping and logistics inflation means higher costs for virtually everything transported, from furniture to electronics. Fuel spikes will drive up transportation costs. Food price pressures are re-emerging, threatening grocery bills. Even pharmaceuticals and water treatment chemicals face availability constraints and higher costs.

Dr. John Glen, CIPS Economist, notes the broader economic implications: “The fact that significant price increases are now appearing in multiple channels within supply chains will put additional pressure on organisations to increase final prices to consumers. This in turn may inhibit the ability of central banks to reduce interest rates in the short term and in doing so inhibit central bank’s ability to stimulate insipid level of economic growth in Europe and the UK.”

Geopolitical tensions take centre stage

The survey makes a critical distinction between the immediate causes of supply shortages and broader organisational concerns. When asked about the current causes of supply shortages:

However, regarding broader organisational risks, an overwhelming 66% of respondents cited geopolitical risk or political uncertainty, the highest level ever recorded in the Pulse survey. This marks a continued rise from 63% in Q1.

Survey participants identified specific vulnerabilities in their supply chains. Concerns emerged about Israeli-manufactured goods, particularly phosphate derivatives used in water treatment processes. The survey also revealed potential disruptions in networking equipment supplies due to tariff policies implemented by the Trump administration in the USA.

Two silent concerns: Supplier instability and logistics disruption

The survey cited two silent concerns that also gained prominence. The first was Supplier instability, which increased to 36% in Q2 2025 from 28% in the previous quarter. This 8% increase signals heightened anxiety about vendor reliability amid global tensions. The second was logistics disruption, which emerged as a new top-three concern at 33%, replacing workforce and labour issues that were prominent in Q1. 

These shifts reflect a fundamental change in procurement priorities, with professionals now focusing more on supply continuity and access reliability rather than the cost volatility that dominated earlier discussions.

However, as a sign of relief, inflation worry dropped sharply from 59% to 41%, suggesting procurement leaders are shifting focus from cost volatility to fundamental supply risk. Access and continuity, not just price, are now priority concerns.

Corporate strategies being shaped based on a volatile global market

Faced with this turbulent landscape, procurement leaders are adapting strategies, though confidence appears to be waning as volatility becomes the norm.

While priorities remain unchanged, average scores have decreased from Q1. This suggests supply chain resilience efforts may be reaching saturation or proving less effective in today’s volatile environment.

The road ahead

The data points to a fundamental shift in global commerce. Dr. Glen sums up the challenge: “The increased volatility and uncertainty driven by geopolitical factors and increased, uncertain tariff regimes have led to an increased perception of risk in global supply chains. The turbulent global environment in which procurement professionals now operate will put additional pressure on our colleagues to ensure that global supply chains continue to operate effectively and efficiently.”

Businesses and consumers would need to prepare for a bumpy ride ahead as trade wars, tariffs, and geopolitical tensions reshape global supply chains.