Grounded in a dataset from more than 30,000 onsite audits per year, key findings from EiQ reveal persistent vulnerabilities in key sourcing markets —including forced labour and exploitative practices, as well as critical health and safety violations—which continue to undermine supply chain integrity and challenge responsible sourcing.

As firms increasingly diversify their sourcing strategies to navigate the turbulent geopolitical climate, understanding the tradeoffs of shifting to new markets becomes critical for mitigating risks while maintaining operational efficiency.

2025 global supply chain risk outlook – key findings

The latest EiQ Supply Chain Risk Outlook 2025 highlights emerging vulnerabilities and shifts in sourcing markets. As global trade undergoes restructuring, businesses face new challenges in labour conditions, transparency and regulatory compliance. Key insights from this report include:

• Increasing high-risk geographies – while global risk averages showed slight improvements, more sourcing markets assessed by EiQ are classified as high or extreme risk over previous years.
• US risk escalation – the United States moved from medium to high risk, driven by issues such as migrant worker vulnerabilities, wage issues and humane treatment concerns.
• Labour intermediary challenges – many markets rely heavily on labour agencies, exposing workers to unlawful recruitment fees, salary deductions and exploitative hiring practices.
• Transparency risks – 42 geographies in EiQ are high or extreme risk for transparency issues, often related to situations such as limited access for auditors and inconsistent records.
• Human rights concerns – 55 geographies show high or extreme risk for humane treatment violations, relating to issues such as harassment, discrimination and abusive disciplinary practices.

Labour intermediaries are increasingly used for facilitating worker recruitment and efficient hiring for companies in the global supply chain. However, "Unethical recruitment practices directly contribute to forced labour and other human rights abuses," the United Nations’ International Organisation for Migration (IOM) says. 

Data from EiQ reveals that labour agents are widely used across key markets such as the United States, India, and the Philippines, and many others which are already vulnerable to labour risks. A heavy reliance on labour agents often results in a lack of oversight that can obscure unethical practices, ranging from unlawful recruitment fees and wage deductions to exploitative hiring practices. Audit data collected by EiQ revealed more than 850 findings related to labour intermediary issues in the past year alone, with a significant number of these classified as major or critical. 

Trade shifts: the impact of diversification

While supply chain diversification is not new, the recent tariff developments may spark an acceleration of this trend, as data shows an increase in manufacturer diversification.  

Companies worldwide are exploring new markets to avoid significant tariffs, with regions such as India, Mexico, Turkey and the US emerging as new opportunities for production. Chinese investors are increasingly establishing production facilities in alternative markets—including Southeast Asia, Mexico, Central and Eastern Europe—which not only alleviates some of the tariff-induced cost pressures but also introduces new layers of complexity into supply chain risk management. 

This diversification drives new challenges. Shifting sourcing and production to regions such as India or the United States may not necessarily mean lower risks. The United States shifted from overall medium risk to high risk in the past year, EiQ shows, and India poses significant challenges in critical areas such as forced labour and health and safety. The integration of Chinese management teams into local operations, especially in countries like Cambodia, Vietnam, and the Philippines, sometimes leads to cultural friction and lapses in transparency.

Businesses must remain exceptionally vigilant, employing a holistic approach that not only focuses on immediate cost efficiencies but also rigorously evaluates long-term supplier transparency and audit integrity.

What this means for supply chain professionals

As trade tensions intensify and long standing climate impacts, regulatory challenges, human rights risks and transformative AI advancements develop, it’s not a question of whether your supply chain will face new complexities, but when and in what form they will occur. Businesses that adopt a proactive approach and empower informed decision making with the insights from this report can better navigate these challenges to achieve total supply chain confidence.

The insights drawn from EiQ’s report make one thing abundantly clear: traditional supply chain management strategies are no longer sufficient in today’s volatile global environment. Companies must integrate advanced monitoring systems, embrace data-driven decision making and adopt a holistic approach to risk management. As businesses continue to grapple with these complex challenges, the need for a forward-thinking, agile approach has never been more critical. 

EiQ’s comprehensive supply chain risk ratings enable companies to identify emerging vulnerabilities and adjust strategies accordingly. By doing so, they can not only safeguard their supply chains from emerging threats but also drive business transformation and achieve total supply chain confidence.

For a deeper dive into regional risk trends, explore the full EiQ Supply Chain Risk Outlook 2025 report.