Tariffs, Tech, and Turmoil in Global Supply Chains

Tariffs, magnets, and malware collided this week—and the shockwaves tell a bigger story about where power lives in the global economy. We unpack how China’s sweeping rare earth export controls—and its command of magnet manufacturing—turn a handful of elements into leverage over EVs, wind turbines, smartphones, and defense systems. When the U.S. answers with 100% tariffs, markets flinch, currencies wobble, and procurement teams scramble to trace origin, redesign parts, and qualify new suppliers at record speed.

We dig into the mechanics behind the headlines: why licensing rules can delay a chipmaking tool by weeks, how VAT tweaks and materials constraints push up solar costs, and where strategic decoupling is already reshaping bills of materials. Alongside policy, we track the human and operational fallout of a major cyber event at Jaguar Land Rover—production halted, suppliers strained, and governments stepping in with guarantees—drawing out practical steps for resilience: aggressive network segmentation, immutable backups, tabletop drills that include supplier payments, and early‑payment schemes to keep small vendors alive.

Not everything is contraction. The India–UK trade pact signals new lanes for diversification, and Southeast Asia continues to rise as an alternative—though often still tethered to Chinese inputs. We close with a clear playbook: map exposure to Chinese-origin materials and processes, fund rapid qualification for alternates, expand magnet recycling and domestic processing, and bring cyber risk into S&OP. If you’re navigating semiconductors, automotive, renewables, or retail sourcing, this is your field guide to the week’s biggest moves and what they mean for lead times, costs, and strategy.

If this breakdown helped you see around the corner, follow the show, share it with a colleague, and leave a quick review—your support helps more supply chain pros find us.

Chapters

• 0:00 Welcome and Subscribe
• 1:11 Tariffs vs. China’s Rare Earth Leverage
• 4:27 Market Fallout and Currency Moves
• 7:10 Strategic Decoupling Takes Shape
• 8:33 India–UK Trade Pact Momentum
• 10:11 Import Slowdowns and Retail Ripples
• 13:11 Cyber Threats and FCC Crackdown
• 14:01 Tech Bunkers and Risk Perception
• 15:20 Inside the JLR Cyber Shutdown
• 19:20 Supplier Strain and Government Support
• 19:40 Wider Cyber Lessons and Resilience
• 19:48 Nobel Peace Prize

Transcript

Tony Hines: 0:13

All the news that's happening this week in supply chains around the world. So stick around, stay tuned, stay informed, and stay ahead with Chain Reaction. Subscribe to Chain Reaction, you'll be first to know when new episodes are out, and you'll never miss an episode. As we close out the week this week, President Trump wants to slap new high tariffs on China. President Trump has said he's going to put a hundred percent tariff on Chinese imports. And you might realise he's doing this because of the restrictions that China's placing on rare earth metals. Those are all the seventeen critical metals needed for defence infrastructure and for the making of EVs. So the automobile industry will be hit hard if that happens. China controls over 90% of global rare earth processing, and it's now tightening its export rules to assert geopolitical leverage, especially over technologies critical to defense, semiconductors and clean energy. China mines 70% of the world's rare earth elements, and it controls over 90% of global processing capacity. It's the undisputed leader in rare earth supply chains. These seventeen elements are essential for electric vehicles, wind turbines, smartphones, military radars, and advanced semiconductors. China also produces 93% of the world's rare earth magnets, which are vital to defense systems like the F 35 jets, submarines, and smart munitions. In October 2025, China introduced sweeping export restrictions. It requires licenses for any product containing trace amounts of Chinese sourced rare earths, technologies related to mining, smelting, recycling, and magnet making. The rules even apply to foreign made goods using Chinese rare earths or processing tech, effectively extending China's jurisdiction across global supply chains. The stated goal? Safeguarding national security, to prevent use in sensitive military applications. Semiconductor firms are scrambling to audit their products for Chinese rare earths fearing delays and license denial. Companies like ASML, which make advanced chipmaking machines, face weeks in delay for shipments due to magnet dependencies. The solar industry is also hit. China produces 80% of global solar modules, and recent VAT changes plus rare earth curves are driving up cost. The US responded with 100% tariffs on Chinese goods, and new export controls on critical software. A United Nations IDO report projected China will account for 45% of global manufacturing value added by 2030, up from 29% in 2023, so it's becoming more and more dominant. Western nations are now racing to diversify supply chains, build domestic processing capacity, and reduce dependence on Chinese materials. Over the past year there's been a slowdown of decarbonisation, and there's been new demand from artificial intelligence and defence for all these critical minerals. But there's increasing resource protectionism. At the close of business on Friday, the Dow Jones plunged eight hundred and seventy-nine points. It's about one point nine per cent of the total. Nearly two percent. Down. It closed at 45479.6. The NASDAQ composite dropped 3.58%, with tech stocks leading the sell-off. And the standard in pools fell 500, 2.71%, making it the worst day since April. These declines happened because President Trump announced a 100% tariff increase on Chinese imports, citing China's new export controls on rare earth minerals. The dollar lost 5.9% against the Euro, and it lost 2.26% against the British pound. But it went slightly up against the Chinese one, 0.78%. So it's a fairly mixed outlook. There's still consumer problems that may lie ahead in terms of inflation and of course the job market. It's likely to ignite into a full blown trade war. So here we go again. Now every economist in the world would probably tell you that tariffs often get that equal and opposite reaction from the nation that's hit by tariffs. And so that's what's happening here. It's a fierce battle. China said on Thursday it would add several new rare earth elements to its export control list in a further tightening of the screw over those critical minerals. Holmium, erbium, thulium, Europeum, and eterbium all added to the list, the Ministry of Commerce said in a statement. They've also added lots of processing equipment to the control list. So even if you couldn't get it from China you might be thinking of setting yourself up, doing processing, but you can't get the kit to do it, because the Chinese hold quite a monopoly over these elements and also over the equipment that processes them because they do the processing. Exporters have to apply for licenses before exporting any items from China. So it's quite restrictive. And this is why President Trump has taken the action that he has. After President Trump doubled the tariffs on China to one hundred percent, China has targeted US tech and defence sectors reliant on rare earths, critical for semiconductors, EVs and military hardware. The markets tanked, Dow Jones down eight seven nine points, NASDAQ down three point six, and rare earth mines have surged as the US scrambles for domestic supply. The dollars wobbled. It's volatile, down against the euro and the pound, slightly up against China. The strategic fallout from this, the Apex Summit is in doubt, that's Trump's meeting with Z, US budget gridlock, and the looming shutdown is adding fuel to the fire, and analysts are warning of earning hits and supply chain disruptions across tech, auto and consumer goods. This isn't just tariffs, it's a strategic decoupling with rare earths, the new battleground, and markets are pricing in long term disruption. They expect volatility and they're taking defensive plays and a scramble for alternative supply chains. Prime Minister of India Narendra Modi and the British Prime Minister Keir Starmer said that their trade deal was transformational. Kiers Dama has been in Mumbai on a two day visit, where he joined one hundred leaders of British businesses, culture and university sectors. He's trying to get the benefits from the trade deals signed back in July, and he wants to publicize those, so he's been quite vocal about it. The deal envisages cuts in tariffs on goods from textiles to whiskey and cars, and it allows more market access for business in the world's fifth and sixth largest economies. They want to boost trade by a further twenty five and a half billion pounds, that's about thirty four billion dollars by twenty forty. And the relationship matters more than ever, Prime Minister Starmer told reporters before flying home. We're opening up opportunities for British businesses in India that other countries simply don't have. It's a unique edge. Earlier, Prime Minister Modi told the business forum that the two countries would double their trade from the current fifty six billion to about one hundred and twelve billion by twenty thirty or before. India's dynamism and the UK's expertise will create a synergy which is unique. That's what Modi said, speaking in Hindi. September US cargo imports drop by 8.4% year on year. China's September shipments drop by 23% nearly amid the tariff threats in the US, and contract shipping rates have fallen by 3% in 12 months to September, and it's the first time that that year on year decline has happened since July 2024. There's been a lot of disruption caused by the tariffs that President Trump has imposed on China and other countries too. I think Switzerland still have tariffs of 39%. Originally, the Trump administration had put 31% on Switzerland, but then they put it up when they had the various meetings later on. So it's 39% which is extremely high. And there's some kind of misunderstanding, I think, about just because a country has a trade deficit, you slap a tariff on. Obviously, some countries are going to have trade deficits for all kinds of reasons, and trade deficits are measured at points in time. It doesn't mean they will always have a trade deficit, it means they now have a trade deficit. But the flows and the ebbs in global trade move around. But there are countries, and President Trump and his administration should know this, that will never have a trade surplus from the United States. The goods that the US produces will be just too expensive for them to buy. And it's strange also because the materials that come from many of those countries are requirements as inputs to the production processes and production systems that are carried out in the United States. So it all seems very illogical. Interesting to watch, but certainly illogical, not very irrational. China's origin imports tumbled to seven sixty two thousand seven hundred and seventy two twenty equivalent units in September, with aluminium, footwear and electric machinery having the steepest drops, toys and sporting goods too, and footwear and apparel all down, and the overall result means that there's a reversal of the rebound that took place in July. So I think there might be some shortages in goods on the shelves as we approach Christmas from some of those items that have been expected by consumers and by businesses to be in the flow of goods coming into the US. Maybe they're not going to happen. There were also imports from South Korea, Taiwan, Hong Kong, Germany and Italy that also declined, again due to tariffs, while imports from Indonesia, Thailand, Vietnam and India all increased. But the month on month data showed across the board a slowdown in Asian trade, despite that healthy looking figure I've just indicated. A number of US online retailers have removed listings for millions of prohibited Chinese electronics in the United States. The chair of the Federal Communications Commission said on Friday that US online retail websites have taken down millions of listings for prohibited Chinese electronic parts. They include things like security cameras and communication equipment from companies such as Howe and ZTE. Poland reported this week that it had various cyber attacks on its infrastructure, and it blames Russia for those attacks. So cyber attacks appear to be everywhere. Now there was another piece of news that caught my eye this week, and this is a an interesting piece. It was about uh Mark Zuckerberg and the building that he's doing in Hawaii. He's got a big site out there apparently, and it's all under wraps. Built a six foot all round the place, and he's building underground well, what some people call bunkers, but he says it's just uh a basement area. He's not the only one. There are other tech billionaires who are also building bunkers in various places, and New Zealand has become an interesting site for them, I believe. They like the idea of being out in New Zealand too, so Hawaii, New Zealand, maybe in the United States. And of course some time back there was talk about various tech hierarchy who were building places up in Canada. So do they know something that we don't? Do you think they've asked AI about what the future looks like, and it looks grim? I don't know. I don't want to spread rumours about that kind of thing, but uh it's interesting that they're doing this. Obviously they want to feel safer. Now you might have heard in the news in the past few weeks and on this programme too, the Jaguar Land Rover situation, escalating cyber attacks, and the impact on the supply chain. So I'll just take you quickly through what happened. JLR halted production across UK plants. It triggered a ripple effect. The incident exposed how fragile digital infrastructure can be, and it stopped their operations. There was prompts from various supply networks asking for COVID style loans, particularly the small and medium sized suppliers around the main hubs of production in the UK. And cyber resilience, of course, is now an imperative, not just an IT concern. It's a strategic imperative. It's something everybody's got to look at. The date of the attack was august thirty first. The breach it was a sophisticated ransomware style cyber shutdown. It halted production at those sites in the West Midlands and on Merseyside in the United Kingdom. The suspect group is a cyber criminal group called Scattered Lapsus Dollar Hunters, then known as a cyber crime syndicate. And the impact was that JLR lost access to all critical systems that controlled manufacturing, logistics and most importantly, supplier payments. The recovery has required a phased restart of operations and various manual workarounds. The supplier impact was immense. The disruption affected thousands of suppliers, especially Tier two and Tier III. You'll know that suppliers in the auto industry are multi layered, and they supply critical components to the OEM, the original equipment manufacturer. Tier two supply suppliers that supply the company. And Tier three supply tier two and so on. So these multi tier supply chains are common in the industry, and we'll talk about that in a later podcast. thirty five percent of surveyed suppliers reduced staff hours or placed workers on leave. Fourteen percent made redundancies, seventeen percent looked for emergency financial support, and the financial cost was big. It cost JLR fifty million pounds a week in lost production. The total cost over a billion and lost sales, and JLR didn't have any cyber insurance. Perhaps they're wishing they did right now. They were considering insurance at the time and there are rumours that they were going through the process of becoming insured against exactly this sort of attack. But of course, it's all too late now, isn't it? The government came back with a one and a half billion pounds loan guarantee scheme in the United Kingdom. It's under the export guarantee system, and they've made these loans available. They're backed by the government, but made through traditional banking loans. And there's an early payment scheme for tier one suppliers, so they get accelerated cash flow and support with invoicing. It was reported by the BBC this week that one supplier to Jaguar Lendrover FTEC Group, which is based in Coventry, furloughed about 900 workers on eighty percent pay after the production halt back in August due to the cyber attack. Well they started to reopen some of the production operations on Wednesday this week, with sixty staff back at work, but it will be at least four to six weeks until it begins to run normally. The chairman of Evdec, David Roberts said that they'd lost about thirteen million pounds in revenue over that period because of the cyber attack. The phased restart began on the eighth of October, so full production is expected to resume gradually over the next four to six weeks. And that's how disruptive such a cyber attack can actually be in these circumstances. And there's been more and more of these types of attacks. We've reported them on chain reaction, in the case of Marks and Spencer's and the co op in the United Kingdom. And there have been attacks elsewhere in the world too. It can knock a company's operating system out for weeks, and it can actually knock some businesses out for good. Well, we can't let this week go by without mentioning the Nobel Peace Prize, which has been awarded to the Venezuelan opposition leader, Maria Carina Micado, for her work over the years in favor of democracy. Now you might recall President Trump and the administration made a big bid for the President of the United States to receive the Nobel Priest Prize even though entrance had to be made for this year's prize by January. And of course, President Trump only became president in January. So it was a bit optimistic on his part. And of course, not very ethical, is it to push yourself forward as a nominee and promote yourself for the prize? So congratulations go to Maria Corina Macado on achieving the Nobel Peace Prize. Thanks for joining us on Chain Reaction. I hope you've enjoyed the episode, hope you've learned something new, and I hope you'll come back next time. When we'll have another edition of Chain Reaction. Until then, take care. I'm Tony Hines, I'm signing off, and I'll see you next time. Bye for now.