Rising US-China tensions, incoming US tariffs, EU regulatory shifts and protectionist measures are driving brands to diversify sourcing and explore nearshoring. Additionally, conflicts in key regions, unconsidered technology adoption and climate-related disruptions threaten the industry.

In 2025, companies must navigate these challenges by adopting flexible, resilient supply chain strategies while balancing cost efficiency, sustainability and regulatory compliance. The industry’s ability to adapt to shifting geopolitical and regulatory landscapes will determine its stability and growth in the coming year.

Key geopolitical and regulatory considerations in 2025