Strategy & Horizon Scannning

Christopher Salmon

Chief Executive

Opportunities, risks, and the human imperative

TLDR

AI is reshaping trade and border management, but not replacing human expertise. While it offers speed, insight, and efficiency, real value comes from how leaders apply it. The future of trade compliance lies in balancing human judgment with AI precision; those who combine both will lead the next era of smarter, more resilient trade.

AI is a hot topic in trade right now, sparking conversations everywhere – in business and in our daily lives. This paper explores how AI is being applied to trade and border management, covering both its benefits and risks, with a special focus on customs, export controls, and actionable real-world examples.

Ultimately, while there is an important role for AI in our sector, the need for human input remains non-negotiable. AI is useful for data crunching and summarisation – but human oversight is critical to ensure: 

  • Immediacy;
  • Nuance; and
  • Practical implementation. 

Current AI and machine learning models cannot replicate these unique aspects and perspectives. 

For example, customs declarations often rely on commercial invoices, which vary significantly by company. So, while AI can analyse this data and “tick the box,” it won’t identify missing elements on the invoice – such as a preferential statement of origin. This piece of information is only known through your relationship with the customer and cannot be inferred by AI.

For the foreseeable future, nothing will replace robust processes, the right skills, and corporate discipline in collecting, managing, and verifying data – all of which require human interpretation, judgment, and knowledge.

Why this matters

AI is transforming how trade is managed, monitored, and secured. But without human oversight, governance, and ethical frameworks, efficiency can quickly turn to risk. Understanding where AI adds value – and where human judgment remains essential – is key to building smarter, safer, and more accountable global trade systems.

AI in trade and borders: opportunities and risks

AI presents both significant opportunities and real risks for businesses and governments operating in trade and border management.

Opportunities

  • Faster customs clearance: AI systems can dramatically reduce the time needed to scan shipping documents, catch errors, and pre-approve low-risk shipments. This accelerates processing, lowers friction, and improves supply chain efficiency.
  • Enhanced risk assessment: AI can analyse trade patterns to flag suspicious cargo or unusual routes, ensuring resources, expertise, and budget focus on the most complex, high-risk issues.
  • Improved border security: AI-powered imaging, sensors, and anomaly detection can identify hidden goods or biohazards more quickly, ensuring timely and appropriate intervention by experienced professionals.
  • Fraud and sanctions compliance: AI enables real-time cross-checking of entities against sanctions and fraud databases, supporting proactive regulatory adherence.

Threats

  • Algorithmic bias in border decisions: training data limitations can unfairly target certain traders or regions while missing others. Constant updates, careful validation, and governance are required to mitigate these risks.
  • Over-reliance on “black box” decisions: blindly trusting AI outputs without understanding the underlying logic can erode expert knowledge and increase operational risk.
  • Privacy and data security concerns: large, centralised datasets create heightened exposure to breaches or misuse.
  • Trade inequality: advanced AI tools may be disproportionately accessible to wealthier nations or larger operators, potentially widening enforcement and compliance gaps.

So, is it too early to rely on AI in trade? Yes and no. AI has clear benefits, but both information and interpretation can be flawed.

While AI can interpret and summarise data, it cannot replace human judgement. AI accesses vast knowledge but often misses the creativity, context, and nuance that humans bring to complex trade decisions. It provides information, confirms bias, or answers direct queries – but does not replicate experience.

Businesses are already deploying AI to simplify data analysis, input, due diligence, and other administrative tasks. However, oversight by skilled professionals remains essential.

Humans bring unique experiences and judgement shaped by context, relationships, and strategy. AI systems are inherently obedient; without human insight, innovation and critical thinking would inevitably stagnate.

So the conclusion (for now at least) is clear: balance is the key. 

Blind reliance on AI is heavy with risk. But, when combined with human expertise, judgement, and critical thinking, it offers powerful opportunities to streamline operations, reduce costs, and enhance decision-making in cross-border trade.

Is the hype around AI just… hype?

Much of today’s AI conversation is fuelled more by marketing than maturity. To develop better AI, we must first train it – feeding it structured, high-quality data and refining it through real-world application.

We’re now embedding AI into every industry and every workflow, but as we train AI to get smarter, there’s an important question to ask: are we getting smarter in how we use it?

The current hype cycle will, inevitably, cool. AI will become a normalised part of business operations, not a novelty. What that actually looks like remains to be seen, but the balance between fear and adoption will continue to evolve as leaders learn to integrate it – and accept its limitations.

However, the risk of hype is strategic distraction. Many organisations rush to invest in AI sheerly out of fear of falling behind, without a clear business case or understanding of the technology’s constraints. This can lead to costly missteps, misaligned priorities, or overreliance on systems not yet ready for mission-critical tasks.

Where’s the value, and what are the risks?

AI has the potential to transform data management, analysis, and interpretation across global trade and border operations. It can summarise vast datasets, flag inconsistencies, and highlight anomalies in seconds; all of which drive efficiency, accuracy, and cost savings.

But the real value lies not in the automation itself, but in how boardroom leaders interpret and apply AI insights.

The risk comes when businesses treat AI outputs as infallible. AI can process millions of variables, but it cannot replicate the context, relationships, and strategic nuance that experienced professionals bring to decision-making. It can show you multiple possible paths, but only human expertise can determine which is the right one.

As AI becomes embedded into trade systems, governance, accountability, and critical oversight will define which organisations gain real advantage… and which fall victim to misplaced trust.

Real-world applications and lessons learned

So, what does AI in trade and borders actually look like in practice?

Across the world, governments and ports are already experimenting with AI to increase efficiency, reduce fraud, and strengthen border control. Some results are promising – others highlight the challenges of relying on technology in systems that still depend heavily on human expertise and coordination.

Below, three real-world examples show both the opportunities and the limits of AI when applied to trade and border management.

The EU Customs Data Hub

On 17 May 2023, the European Commission introduced an ambitious framework to reform the European Customs Union. At its heart lies the EU Customs Data Hub: a centralised IT environment designed to streamline data submission, enhance risk management, and promote a data-driven approach to customs operations.

Once fully implemented, the Hub will allow traders, customs authorities, and enforcement agencies to share information in real time, helping to combat fraud and evasion while supporting compliant businesses.

New legislative rules (including “deemed importer” obligations and e-commerce tariff simplifications) are set to take effect by March 2026, with the Hub becoming mandatory for all economic operators by 2033.

This framework creates a strong foundation for future AI deployment in customs management, although it’s important to note that AI integration remains conceptual at this stage.

If successfully implemented, the potential benefits include:

  • Significant cost savings for both governments and businesses
  • Improved enforcement through smarter, data-led insights
  • A single, unified interface for all trade actors

However, execution will determine success. Smooth implementation, robust data protection, and manageable compliance demands for SMEs will be critical. The EU must also ensure strong coordination between Member States and institutions to avoid friction or duplication.

As with many AI-driven initiatives, ambition must be matched by readiness. AI alone won’t prevent fraud; it will only be as effective as the data quality, human oversight, and governance that support it.

Aspect Pros Cons
Efficiency Single portal, reduced burden, “Trust & Check” simplifications Transition complexity; Member State readiness varies
Risk management AI-driven, EU-wide oversight, cross-sector data integration Data security / privacy risks
Cost savings €2B/year saved in IT; €1B additional revenue from e-commerce SMEs face compliance and implementation costs
Cooperation Better data access for customs, law enforcement, surveillance agencies Coordinating the new EU Customs Authority with national bodies
Timeline Clear phased rollout (2028–2038) Some divergence between stakeholders over final deadlines
Legislative status Forward momentum through Council and Parliament stages Final terms are still under negotiation

 

The Port of Rotterdam

The Port of Rotterdam’s Digital Twin is one of the most advanced examples of AI and smart technology in logistics. Using real-time data, predictive analytics, and simulation tools, the port is transforming how vessels are managed, how resources are allocated, and how environmental impact is measured.

The project aims to move towards autonomous, data-driven port operations, reducing ship wait times, improving fuel efficiency, and supporting sustainability goals.

But even in a world-class port like Rotterdam, there are clear challenges:

  • Integration hurdles with legacy systems
  • Cybersecurity vulnerabilities in connected infrastructure
  • High development and maintenance costs
  • The need to upskill workforces and manage the social impact of automation

Rotterdam’s experience shows that while AI can revolutionise operational efficiency, success depends on collaboration between technologists, regulators, and human operators – not on technology alone.

Aspect Pros Cons
Operational efficiency Real-time data, reduced ship wait times, optimal berthing logistics High development and maintenance costs
Integration & innovation Scalable smart infrastructure, autonomous asset communication, new services Integration complexity with legacy systems, stakeholder coordination
Predictive & resilience Simulations, proactive maintenance, safety gains Need for skilled workforce, maturity of systems still evolving
Environmental impact Fuel savings (≈13%), greener operations Cybersecurity and privacy vulnerabilities
Workforce & community Platform encourages innovation via partnerships Risk of job displacement and public resistance

 

Dubai Customs

At the other end of the spectrum, Dubai Customs is already applying AI at scale through its Smart Risk Engine: a flagship initiative within the UAE’s “Customs of the Future” strategy.

The system uses big data analytics, machine learning, and real-time information to automatically assess the risk level of every shipment entering or leaving Dubai. And, to date, its performance has been remarkable:

  • 97–98% of low-risk shipments are processed in under two minutes
  • Many transactions are cleared in less than 10 seconds, dramatically reducing congestion at ports and airports
  • High-risk shipments are automatically flagged for inspection, allowing human experts to focus on complex cases

This approach shows what’s possible when AI is strategically embedded into a customs framework with clear oversight and defined risk parameters.

Still, even a system this advanced carries risks: over-automation, misclassification, and opacity in decision-making can all erode trust if not carefully managed. Again, the takeaway here is that AI can transform border operations; but only when transparency, human expertise, and accountability remain central.

Aspect Pros Cons
Efficiency 97–98% auto-cleared in under 2 minutes (many in under 10 seconds); 328% increase in sub-10-minute clearances Risk of over-automation; possibility of misclassification
Detection AI profiling intercepts contraband before entry; advanced scanning integration Requires skilled staff, multi-source data, costly to operate
Transparency Swift, criteria-based processing Lack of trader visibility into decision logic
Adaptation Modern, scalable system Potential resistance to AI processes

 

The last word

AI’s potential in trade and border management is undeniable. So are its limits. 

The systems that move goods, enforce standards, and protect economies rely on more than data alone; they rely on judgment, context, and trust.

The smartest deployment of AI isn’t to replace those qualities, but to enhance them. The organisations that will thrive are those that see AI as a strategic, ‘Swiss Army knife’-style tool (read: not as a shortcut) – using it to surface insights faster, reduce administrative burden, and strengthen the accuracy of human decision-making.

As governments and businesses experiment with automation and predictive analytics, the balance between speed and scrutiny will define success. The winners won’t be those who adopt AI the fastest, but those who embed it most responsibly, pairing innovation with governance, and efficiency with ethics.

Ultimately, AI will keep evolving, and so will trade. The constant that must remain? Human expertise; the ability to interpret, question, and connect the dots, where machines cannot.

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Strategy & Horizon Scannning

Steel and Aluminium at a Crossroads: Supply Chains, Tariff Wars, Business Impacts

  TLDR 2025 reshaped steel and aluminium supply chains. U.S. tariffs, EU uncertainty, and Chinese overcapacity have all driven structural rerouting, pricing instability, and compliance pressure. Businesses elevating metals sourcing to a strategic capability – with stronger origin assurance, supplier governance, and scenario planning – typically outperform competitors in terms of resilience, cost control, and market access. Firms will need to adapt to preserve their position and competitiveness. 2025 saw the sharpest escalation in metals-trade interventions since the original, President Trump-era Section 232 measures, in 2018. What began as a series of “targeted” moves early in 2025 has evolved into a multi-jurisdictional reset, touching tariffs, origin rules, industrial policy, and supply chain governance. For global businesses reliant on steel and aluminium, this will represent a fundamental shift in operations and market position. Steel and aluminium are systemic commodities. They underpin every major industrial value chain: automotive, aerospace, defence, energy infrastructure, construction, household appliances, and large consumer goods. When trade conditions tighten around these materials, the shockwaves propagate quickly: rising input costs, margin compression, delayed production cycles, and forced redesign of sourcing strategies. Several trigger events collided in 2025: In May 2025, the U.S. raised tariffs to 50% on a wide range of steel and aluminium categories, materially altering the economics of imports. By Q4, Washington introduced tightened melt-and-pour origin rules, significantly raising the bar for compliance and due diligence. Meanwhile, the EU remained locked in slow-moving negotiations with the U.S. on tariff-rate quotas, while simultaneously confronting the long-running challenge of Chinese overcapacity depressing European prices. China’s own pricing volatility (driven by subsidised overproduction and domestic demand swings) continue to distort global markets. Taken together, developments like these show that steel and aluminium supply chains are not experiencing a temporary disruption – they are undergoing a deeper, structural reorganisation. Businesses will need to adapt to preserve their position and competitiveness. Why this matters Global metals policy is moving faster than most supply chains can adjust. The 50% U.S. tariffs, melt-and-pour rules, EU safeguard activity, and China’s continued overproduction are reshaping sourcing and pricing across entire industries. For manufacturers and importers, this is not just a cost issue; it’s a governance, compliance, and competitiveness issue. How firms respond will determine whether they stay ahead of regulatory pressure, or become ensnared in a rapidly tightening enforcement environment. Expert guidance on international trade Contact clearBorder today →  How tariffs reshape global flows The 50% U.S. tariffs  Under the administration of President Trump, the U.S.’s move to increase tariffs to 50% on a wide range of steel and aluminium products marked a pivot in metals trade. The measures affect core inputs such as semi-finished steel, rolled products, extrusions, and several aluminium categories. Downstream products such as cars, domestic appliances, and industrial machinery are increasingly examined for the embedded origin of their metal content. The tariff shock has created three immediate consequences: Domestic inflation in U.S. metals markets. Manufacturers face significantly higher input costs, prompting either price rises or margin erosion. Redirected flows from Asia to Europe. Exporters seeking to avoid U.S. duties have diverted excess supply toward the EU, exacerbating oversupply conditions and placing further pressure on European producers. A new compliance burden for global exporters. The tightened melt-and-pour rules raise the risk of inadvertent non-compliance. Trans-shipment scrutiny has increased; origin validation is now a core operational requirement. EU’s dilemma The EU finds itself between a rock and a hard place. On one side are slow, uncertain EU–U.S. negotiations on tariff-rate quotas and metals cooperation frameworks; on the other is intensifying pressure from the steel lobby to protect European producers from diverted Asian supply after the U.S. tariff shock. European manufacturers face irregular and unpredictable input costs, complicating price setting, inventory planning, and long-term contracting. The EU’s Green Deal Industrial Plan adds further complexity, as imported metals are essential for its energy-transition ambitions, yet those same imports now threaten domestic competitiveness. The overcapacity question China’s long-standing overcapacity issue remains the gravitational centre of global metals instability. Production levels continue to exceed domestic demand, pushing subsidised excess onto global markets and driving renewed price volatility. This places other jurisdictions in a defensive posture. European and U.S. producers have reported intensified undercutting; Asian and Latin American manufacturers face narrowing margins; and developing economies risk deeper dependence on low-cost Chinese supply. Beijing may consider retaliatory measures, or deepen its alignment with Global South partners (such as Malaysia, Indonesia, Vietnam, and Thailand in Southeast Asia, or members of the Community of Latin American and Caribbean States) to mitigate against Western trade interventions. Either path would add new layers of complexity to an already fragmented global steel and aluminium market. Re-routing, re-pricing, re-risking How supply chains are responding The reshaping of steel and aluminium trade is visible in operational patterns, with supply chains reorganising at pace. Businesses are re-routing in order to defend margin and meet compliance thresholds. According to emerging reports, Asian-origin metals that previously flowed into the U.S. are being diverted toward Europe, Turkey, and the Middle East. European manufacturers, in turn, are exploring alternative inputs from India, Brazil, and the Gulf to avoid the tariff spillover effects. This repositioning may also trigger changes in logistics: greater use of east-west routes into the EU, potentially more inventory buffering, and in some sectors (such as automotive and machinery) a shift toward nearshoring for critical components. Cost structures are being re-priced globally. The U.S. tariff shock has lifted domestic prices sharply, while excess supply has depressed segments of the European market. Producers in China and Southeast Asia have adjusted export strategies in real time, offering deeper discounts to maintain throughput. For buyers, this creates a two-speed market: inflationary in the U.S., deflationary or erratic elsewhere. Long-term contracts are harder to negotiate, and index-linked pricing is seeing a resurgence. Perhaps most importantly, supply chains are being re-risked. Compliance is now inseparable from commercial decision-making – a cheap tonne of steel that ultimately fails melt-and-pour verification is a liability, not a saving. Manufacturers are mapping exposure at a deeper level than before, tracing inputs back to smelters (not mills), and stress-testing for tariff escalation or port inspections. Insurance markets are responding too, with new language around origin risk and misdeclaration liability appearing in trade credit and marine cargo policies. Rising compliance complexity The enforcement of the U.S. melt-and-pour rule is proving to be one of the most consequential compliance developments. By requiring origin to be established at the smelting stage – not the final manufacturing stage – regulators have effectively redrawn the documentation burden for the entire value chain. Finished goods manufacturers, especially in automotive, appliances, construction products, and machinery, must now evidence multi-layered provenance to avoid penalties or shipment holds. This comes alongside broader tightening: The EU is advancing anti-circumvention probes and designing new safeguard mechanisms around diverted Asian supply Tariff-rate quota negotiations with the U.S. remain uncertain, complicating long-term planning The UK faces a hybrid challenge: exporters into the U.S. or EU must meet foreign origin standards and navigate domestic decarbonisation requirements shaping the future of UK steelmaking For business boardrooms, this translates into elevated expectations around: Proving origin at smelter level Supplier vetting across multiple jurisdictions End-to-end documentation capable of withstanding audits Horizon scanning for tariff escalation and market fragmentation Avoiding unintentional trans-shipment exposure, especially in multi-country routing models Implications for business Cost structures will remain unstable for the near term. U.S. tariffs have created inflationary pressure domestically; Europe is facing oversupply; and Chinese volatility continues to inject uncertainty into global reference prices. Businesses should anticipate continued dual-market dynamics throughout 2026. Compliance risk has moved from operational to existential. The melt-and-pour rule, EU safeguard mechanisms, and intensified anti-circumvention enforcement mean that the regulatory exposure of a single misclassified input far exceeds the cost of the input itself. Boardrooms increasingly view origin assurance as part of corporate governance, not logistics. Supply chain strategy is entering a redesign phase. Nearshoring and multi-regional sourcing are gaining momentum Dual or triple sourcing for steel and aluminium is becoming standard in automotive, engineering, and construction Inventory models are shifting from just-in-time to strategic buffering Quality and compliance maturity are becoming as important as price when selecting a supplier Commercial positioning is changing, too. Companies that can evidence clean origin, stable sourcing, and strong governance are positioned to outperform competitors in tenders – particularly with OEMs (original equipment manufacturers) facing strict regulatory exposure of their own. For some sectors, metals compliance is now a competitive differentiator. The last word Steel and aluminium have always been essential industrial inputs, but in the current climate, they’ve become a barometer of global economic and geopolitical tension. Tariffs, origin rules, and enforcement actions are all actively reshaping supply chains, capital allocation, and competitiveness. The businesses equipped to succeed in this environment treat metals not simply as commodities to be purchased, but as strategic exposures to be governed. This means that decision-makers have visibility deeper than tier-one suppliers; they can evidence origin at smelt stage. They plan for tariff escalation; not react to it. And they embed compliance into commercial decision-making. Early, proactive movement will help protect against price shocks, audit interventions, and market-access constraints, as the next phase of trade policy unfolds. For manufacturers, importers, and exporters, the question is not whether to adapt, but how quickly. The former era of (relatively) stable and predictable metals flows is over – strategic readiness is now the defining commercial advantage. For trade advisory tailored to your business and its operations Contact the clearBorderteam today → 

Steel and Aluminium at a Crossroads: Supply Chains, Tariff Wars, Business Impacts
Strategy & Horizon Scannning

Introducing our new podcast series ‘Borders for the Boardroom’

“Borders for the Boardroom” is a podcast series brought to you by the team at clearBorder. In these short episodes, we introduce you to all things trade and borders providing an insight and understanding that you may not have had before. We hope that this means when you return to your business you have a greater knowledge of the impact and challenges borders and trade will have on your organisation, as well as the opportunities available to perhaps do things differently, reduce risk and continue to grow. Each podcast introduces a new topic, led by one of the clearBorder team of experts. We hope you enjoy it. If you want to continue the conversation or have any questions then do get in touch with us at info@clearborder.co.uk. We’ll see you next time. Produced and edited by Yada Yada. Listen here: Spotify  |  Apple

Introducing our new podcast series ‘Borders for the Boardroom’
Strategy & Horizon Scannning

A fragile reset? What the US–China tariff truce means for cross-border trade strategies in 2026

In late October 2025, a diplomatic thaw between Washington and Beijing produced a narrowly scoped trade “pause” – a tactical (and temporary) easing of the headline tensions which have dominated the trade-sphere in recent months.  The agreement trimmed select U.S. tariff categories (for example, halving certain fentanyl-related duties), and opened the door to resumed Chinese purchases of U.S. soybeans; while Beijing signalled a conditional scaling back of some export controls on rare earth elements.  For boardrooms, this pause buys time for resilience-building; what it does not do is remove structural levers that can reignite escalation. China retains decisive market power over rare earths and refining capacity, and Beijing’s export restrictions – introduced and then expanded in October 2025 – remain a latent threat to industries from EV batteries to defence suppliers. Financial and commodity markets treated the announcement as tentative: rare-earth prices and equities briefly eased, but analysts warned supplies and stocks could re-tighten if the geopolitical headwinds shifted.  Meanwhile, political and legal fault-lines persist in Washington. The administration’s tariff authority under the International Emergency Economic Powers Act (IEEPA) is the subject of active judicial scrutiny at the U.S. Supreme Court; justices heard oral arguments on 5 November 2025 and raised serious questions about executive reach. A negative ruling could remove a major instrument of U.S. trade policy – or force the administration to pivot to other statutory levers. That legal uncertainty compounds the truce’s fragility.    Why this matters The US–China tariff truce offers a temporary pause, not lasting certainty. For boardrooms and global supply chain teams, understanding the risks, monitoring key signals, and proactively planning for multiple outcomes is critical to maintaining stability, protecting margins, and mitigating the operational and strategic impacts of potential renewed escalation.   More on the U.S., China, South Korea, and what trade talks mean for you: → Borders for the Boardroom: Sean Miner on the US-China trade deal Listen now on Spotify and Apple Music What changed in October 2025… and what didn’t What changed Targeted tariff adjustments and commitments. In the late-October negotiations, U.S. officials said certain tariff lines tied to fentanyl precursor chemicals would be halved – from 20% to 10% – lowering the headline U.S. tariff burden on Chinese imports by a reported few percentage points overall. The talks also included commitments for a sizeable uptick in Chinese purchases of U.S. soybeans (Treasury officials cited a figure in the region of 12 million metric tonnes for the season). It’s likely these moves were partially influenced by the U.S. administration’s desire to appease what it sees as a core voter base of workers and farmers. A temporary easing of export control pressure. Beijing signalled it would pause, or at least temper, certain enforcement actions tied to rare-earth export controls, helping to calm thin but critical supply lines for some manufacturers. Markets interpreted the message as conditional rather than permanent, and subsequent industry commentary urged caution.  Regional tariff alignment moves. The U.S. also reached or reaffirmed tariff understandings with regional partners (notably arrangements that set some levies for Japan and South Korea at lower bands), reshaping near-term trade exposure for particular sectors such as autos and shipbuilding. Those regional moves probably form part of a broader attempt to compartmentalise tensions and avoid a wider regional fallout.  What didn’t change The strategic rivalry remains. The truce is tactical. China’s longer-term industrial strategy – including control over mining, processing and refining of many rare earths – has not been reversed. Beijing’s October 2025 expansion of export controls (adding multiple elements and equipment to control lists) shows the country still possesses structural levers that could be re-deployed if negotiations sour.  Legal and policy uncertainty in Washington. The Supreme Court review of IEEPA-based tariff authority introduces a material policy risk. If the Court constrains presidential power to impose broad tariffs, the administration may have to pivot to other mechanisms (e.g., Section 232, Trade Act tools) with different political, legal and operational implications. In short; the legal basis that enabled the rapid imposition of duties early in 2025 is not guaranteed to persist.  Domestic market realities limit quick wins. Beijing’s promise to increase U.S. soybean purchases was electorally useful for the U.S. administration, perhaps, but agricultural market signals suggest China’s immediate buying capacity may be limited by inventory and crush-margin dynamics. Reuters reports flag a soybean stock overhang that may constrain near-term purchases.  The net effect At least in the immediate future, the October ‘tariff truce’ reduces the near-term political temperature: selected tariff lines were eased, some procurement resumed, and short-term market volatility abated.  But – the structural levers that create systemic risk (rare-earth dominance, legal uncertainty over tariff authority, and the political incentives that drive tit-for-tat measures) remain very much alive.  For business leaders, the best operational position is not one of détente, but of time-boxed respite. That means acting quickly to shore up optionality, and avoid being caught in a reactive posture when the pause ends.  H2: Why the truce Is fundamentally unstable The agreement was engineered as a tactical and temporary de-escalation, not as a lasting settlement. While headline tariff lines were softened, the levers of critical economic power remain deeply asymmetrical. First, China’s rare-earth export controls remain a potent strategic weapon. Despite signaling an easing of enforcement, Beijing retains control over key mining and refining capacity. Prior expansions of export restrictions demonstrate that it is fully capable of re-tightening. Second, President Trump’s tariff authority under IEEPA is in question. The U.S. Supreme Court’s current review directly challenges the administration’s legal basis to impose broad trade duties.  Third, domestic and political incentives complicate sustained cooperation. Beijing is under pressure to protect strategic industries; Washington faces conflicting demands from agriculture, manufacturing, tech, and national security voices.  Finally, the temporary nature of the pause itself speaks volumes. This is not a comprehensive reset but a time-bound, finite window, subject to the ebb and flow of geopolitical risk.  Implications for global business and supply chains This tactical pause in trade hostilities brings into focus certain risks for multinational companies operating across complex supply chains. Borders for the Boardroom: Christopher Salmon on supply chain resilience → Listen now on Spotify and Apple Music Import exposure and tariff risk Existing duties remain in place, and the legal jeopardy stemming from IEEPA challenges means the entire tariff infrastructure could change. For supply chain teams, this is the moment to re-assess import exposure: which products are most vulnerable, and what alternative sources exist if the truce unravels. Supply chain architecture and sourcing The pause presents a moment for strategic recalibration. Firms that once relied on ‘China +1’ sourcing strategies should re-evaluate: ‘China +N’ is the more resilient, risk-mitigated position. Near-shoring, alternate production hubs, and regional diversification offer possible solutions, but such shifts can be costly and time-consuming. Contracting, procurement, and pricing governance With uncertainty lessening in the short term, companies may be tempted to renegotiate contracts or lock-in suppliers aggressively. However, such moves should be structured carefully. Procurement teams should build scenario clauses into agreements, allow for tariff escalation or rollback triggers, and articulate pass-through mechanisms.  Capital deployment and investment strategy For capital-intensive operators (especially in autos, semiconductors, and clean tech) the pause is a window of opportunity to recommit capital, under conditional terms.  However, investment without horizon scanning is a high-stakes guessing game. Boardrooms must ringfence capital and create “if-then” gateways triggered directly by treaty developments and legal outcomes. Navigating the tariff pause: signals, strategy, and stability Timely, although seemingly never built to last, the US–China tariff truce represents a holding pattern amid unresolved geopolitical, legal, and economic pressures. For boardrooms, CFOs, and global supply chain leads, vigilance here is critical. The coming 6–9 months will reveal whether the pause becomes a platform for stability, or a prelude to renewed escalation. Key signals to monitor: Supreme Court IEEPA ruling: a decision limiting or upholding presidential tariff authority will immediately reshape strategic options. China’s compliance: soybean purchases, REE export controls, and shifts in blacklists or procurement rules will test the truce’s integrity. U.S. domestic pressures: farmers, retailers, tech, and security interests may prompt rapid shifts in U.S. tariff policy. South Korea and Japan: developments in semiconductor deals, export controls, and bilateral concessions could influence Beijing’s response. China’s geoeconomic posture: incremental moves in investment screening or sector targeting may accumulate into material operational risk. What cross-border companies should do: Refresh scenario models with tariff, legal, and geopolitical triggers Audit supplier and import exposure under multiple outcomes Advance diversification and dual-sourcing strategies Strengthen contractual protections for tariffs and disruptions Monitor policy daily, not quarterly Preparation builds stability Geopolitical uncertainty cannot be entirely eliminated; but it can be priced, planned for, and strategically contained. The U.S.–China relationship is unlikely to revert to pre-2018 norms: structural forces – technological leadership, critical minerals, industrial security – render volatility a recurring reality for multinational organisations. Boardrooms focused on embedding resilience into governance, procurement, investment, and supply chain design will be significantly better-equipped to face future scenarios and weather their impacts.   → Borders for the Boardroom: Christopher Salmon on supply chain resilience Listen now on Spotify and Apple Music

A fragile reset? What the US–China tariff truce means for cross-border trade strategies in 2026
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