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#20 – Tariffs 2.0, Floods, and McLaren’s Circular Supply Chain
Jul 10, 2025
Edoardo Arbizzi
🌎 Global Outlook
🎯 USA 2.0: The Tariff War Enters Phase 2
July 31, 2025, marks a pivotal date: the Federal Court of Appeals will decide whether to uphold or overturn Trump’s IEEPA tariffs, which were declared illegal by the U.S. Court of International Trade on May 28. But Trump isn't waiting: by August 1, any country that hasn’t finalized a trade agreement will see the reinstatement of the April tariffs.
A 10% base tariff will apply to all countries, with an additional 20% "fentanyl" tariff and 10% "reciprocal" tariff on China, and 25% on Canada and Mexico. So far, only two frameworks have been signed (with the UK and Vietnam), while dozens of promised agreements remain pending.
Consumer spending dropped in May for the first time since January, inflation is on the rise again, and retail sales are falling. As Michel Nies of Citi puts it: “Retaliation by trade partners could have a lasting impact on U.S. manufacturing—and, by extension, on public finances.”
For European procurement managers, August is shaping up to be a critical month: be ready to revisit contracts, trigger force majeure clauses, and urgently diversify supply sources.
🔗 Sources:
https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/
https://www.axios.com/2025/07/06/trump-tariffs-letters-trade-war
https://www.cnn.com/2025/06/28/economy/trade-deals-tariffs-trump
🌊 Extreme Weather 2025: When Floods and Heatwaves Crash Supply Chains
2025 is the year of extreme weather. Floods (123 events in the U.S. alone in 2024) account for 70% of climate-related disruptions—but now a new and equally dangerous threat is emerging: heatwaves that cripple global power grids.
While floods are causing delivery delays of 26–32% (based on 2021 data from Belgium and Germany), heatwaves are overloading power infrastructure in China, the U.S., Canada, France, and the UK. In Switzerland, the Beznau nuclear plant has halved production due to critical water temperatures in the Aare River. Heatwaves increase electrical line resistance, overheat transformers, and put entire energy systems at risk.
Climate-driven supply chain disruptions could lead to losses of up to $25 trillion by 2060 (King’s College London). Environmental costs in supply chains are expected to reach $120 billion by 2026. As Kostantsa Rangelova from Ember warns: “The crisis is accelerating—so must our response.”
What does this mean for procurement? It's no longer enough to assess flood risk. A full evaluation of suppliers' energy exposure is needed, taking into account both flood vulnerability and dependence on fragile power grids.
🔗 Sources:
🖼️ Meme of the Day
🏎️ Fun Fact
McLaren: How F1 Turned Its Supply Chain into a Circular Powerhouse
Who would have thought that Formula 1—the ultimate arena for speed and extreme performance—could become a testbed for circular supply chains? McLaren Racing is rewriting the rulebook, proving that it’s possible to win the Constructors’ Championship (as they did in 2024) while simultaneously revolutionizing supply practices.
Kim Wilson, McLaren’s Director of Sustainability, puts it simply: “Many think you must choose between sustainability and performance. We’ve shown you can have both.” In their championship year, McLaren achieved 37% circularity in F1 car construction and reduced per-race emissions by 23%.
Supply Chain as a Lab for Innovation: In collaboration with Deloitte UK, McLaren developed the first F1 Constructors’ Circularity Handbook, commissioned by the FIA. It’s a guide for all teams on how to rethink their supply chains: minimize resource use, cut production waste, and maximize material and supplier value.
Suppliers as Strategic Partners: McLaren is fundamentally redefining supplier relationships. Its partnership with Bcomp to develop more circular chassis parts, its use of recycled carbon fiber and bio-based materials—all show how suppliers become co-innovators. In 2023, McLaren was the first to race with a chassis featuring recycled components at the U.S. Grand Prix.
The procurement takeaway? Even in high-performance, high-pressure industries, rethinking the supply chain through a circular lens is not only possible—it’s a competitive edge. As Wilson puts it: “If we can get every team to measure their circularity, we can collectively influence regulations to improve sustainability without compromising performance.”
🔗 Sources:
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