As global trade becomes more entwined with economic and geopolitical pressures, trade professionals need to examine the key risk factors in critical areas of import and export workflows and global supply chains
The United States is one of the world’s largest trading nations with trade in goods and services reaching $7.43 trillion in 2024, second only to China globally. This total includes total exports of $3.191 trillion and total imports of $4.1 trillion, making the country’s trade deficit around $918 billion.
Given the focus on perceived trade imbalances and widespread tariffs even among key trading partners, global trade risk has reached the attention of C-suite executives, not only at the largest global organizations but also at smaller organizations that are importing goods from countries with lower sourcing costs.
In this three-piece blog series, we examine the key risk factors in import workflows, export workflows, and global supply chains. While transparency in all workflows is a key component to mitigate risk, technology and the usage and analysis of trade-related data play an equally important role.
Understanding import risks
No other country imports more goods than the US, and its top trading partners are the European Union with $553 billion in imports, closely followed by China ($536 billion), and its North American neighbors Mexico and Canada with $456 billion and $437 billion, respectively. Japan, with $148 billion, completes the ranking of the top five US trading partners.
While China’s dominance as a top Asian importer to the US has been decreasing over the last 10 years, the current wave of tariffs against Chinese imports will accelerate this decoupling even further. Indeed, decoupling from China is one of the key objectives of US trade policy and is becoming a reality that importers and consumers need to cope with.
Additionally, if we look at the current regulatory environment on global trade, one can argue that trade-related regulations such as sanctions and prohibited goods have not changed significantly over the years. They are a constant and predictable source of risk that is managed with a variety of tools and datasets, such as denied party lists and prohibited goods lists.
While China’s dominance as a top Asian importer to the US has been decreasing over the last 10 years, the current wave of tariffs against Chinese imports will accelerate this decoupling even further.
With the current tariffs, however, the increased cost of sourcing will become the number one risk that importers need to manage because tariff structures can change over even short periods of time, making planning and long-term sourcing more difficult. The implications are that importers must model duties, taxes, and changing tariffs in order to adapt their sourcing strategy effectively to the current dynamic regulatory environment.
In the Thomson Reuters Institute’s recently published 2025 Tariffs survey, global trading professionals responding to the survey said that in addition to the increased cost and supply chain disruptions, market competitiveness, regulatory compliance, and consequentially, the additional financial strain on their competitiveness are key challenges they are facing. In that survey, trade professionals from US companies stated that 23% of their imports are at risk because of tariffs.
Not surprisingly, the current wave of tariffs has seen US buyers calling off orders to better understand regional sourcing strategies. A particular emphasis in the current tariff environment is the category of de minimis products, which are products with a value of less than $800 that typically enjoy tax and tariff-free status. These products will very likely be a key category of tariff application with significant implications for market participants. In fact, 60% of all de minimis products that are entering the US are coming from China.
Risk in product origination
If the country of origin for many imported products is itself becoming a key risk factor, forward-looking organizations are applying trade lane analysis to create resilience in their sourcing decisions. That includes a comparison of applicable charges like duty and value-added tax (VAT) and the development of country threat scores based on a variety of input parameters. Real-time data on shipments, ports, brokers, and countries can be used to adapt trade lines and to seek out less risky countries for origination.
Take the example of Vietnam: Its trade with the US has been increasing but so has its trade with China. In many instances, Vietnam’s workers process goods from China which are then legally shipped to the US under a Made in Vietnam label. Further, many Chinese producers have set up operations in other countries to bypass the current tariff structure. This was the Chinese strategy during the first Trump administration when that country’s importers used Thailand and Vietnam as an export hub to the US. With current tariffs in Vietnam and Thailand in place (although they are currently halted for 90 days), real Thai and Vietnamese producers without ties to China will need to find ways to clearly document that their products are made locally and are not trans-shipments made in China. Current actions from the Vietnamese trade ministry suggest the country will be strengthening its control over imported goods for trans-shipment purposes.
If the country of origin for many imported products is itself becoming a key risk factor, forward-looking organizations are applying trade lane analysis to create resilience in their sourcing decisions.
With the various and often deceptive strategies that Chinese producers are deploying, the need for sub-tier mapping and understanding the origin of imported products becomes an essential component in sourcing due diligence. And, because new trade lines determine new import partners, the risk screening of new importers requires a more thorough understanding of counterparty risk than before.
To aid all this, importing organizations need to invest in technology and data capabilities to understand beneficial owners and their products’ origins, especially given the attention on tariff evasion practices via trans-shipments. In addition, the authentication of underlying documentation will play an important role in mitigating risk and ensuring that products really do originate from the countries that importers claim they do.
The role of free trade zones
As many global organizations consider changing sourcing partners, free trade zones are gaining importance. Today, more than 5,400 free trade zones exist in the world, with more than 293 free trade zones in the US alone. In the US, these zones are secure areas under the supervision of U.S. Customs and Border Protection (CBP) but are generally considered outside of CBP territory.
These free trade zones have the advantage in that goods can be stored, processed, and re-exported without incurring duties. More caution is needed when using free trade zones outside of the US, as there are a variety of risks. For example, fraudulent documentation, the creation of shell companies to exploit reduced oversight, and illicit administrative procedures for money laundering purposes are all risks. Shell companies too can be used for money laundering purposes or for the circumvention of tariffs.
Looking at technology as the solution
As trading professionals within global organizations seek to manage these new emerging trade risks, best practices may dictate they turn to technology and data to increase transparency of import workflows, including conducting dynamic trade lane analysis and automated due diligence on all new and existing supply chain partners.
Indeed, due diligence does not stop after on-boarding. Continuous monitoring of a variety of risk factors obtained from open sources and proprietary databases are essential in this new import risk paradigm. And depending on the number of trading partners and their executives, advanced technologies, such as the use of biometric identifiers are available and can be integrated into a new on-boarding workflow.
Often biometric identification includes the ability to authenticate underlying documents as well. And that’s a plus, because given the speed and sophistication in document forgery through AI, importers may have no choice but to upgrade their technology stacks to give themselves a fighting chance.
In the next installment in our series, we will look at the risks and how to address them on the export side of the ledger.
You can download a full copy of the Thomson Reuters Institute’s 2025 Tariffs survey here