Yemen’s Iran-aligned Houthi rebels have launched a new, intense campaign against commercial shipping in the Red Sea, sinking two vessels — Eternity C and Magic Seas — and killing or abducting crew members in early July. These coordinated attacks, using drones, missiles, gunboats, and sea-borne explosives, have shattered a brief lull following a U.S.-brokered May ceasefire. The chaos has triggered soaring maritime insurance costs and disrupted a vital shipping artery, forcing rerouting and escalating global trade volatility. With Iranian backing, the Houthis appear emboldened, and international military involvement might re-escalate.
Our take: The chaotic week it’s been for tariff news (more on that to come) only reinforces how impactful geopolitical issues such as the Red Sea Crisis and Ukraine war are to global supply chains. Resilience and flexibility need to remain a priority for all companies. Transmodal can help model any changes in cost or service that may come with shifts to your sourcing strategies as you navigate the current market environment.
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According to WTW’s latest Global Supply Chain Risk Survey, in the face of growing geopolitical, cybersecurity, and supplier-related challenges, companies are revamping their supply chain risk strategies in 2025. While many have advanced their risk frameworks through tech tools like supply chain mapping and stronger cross-functional collaboration, only 8% feel fully in control. Respondents point to rising risks such as geopolitical instability (19%), inflation (18%), and a sharp increase in cybersecurity concerns (16%). Having said that, companies are leaning into digital transformation, executive oversight, and internal risk tools as a way to shift from pandemic-era priorities and budget concerns to long-term capability building. However, these aren’t big overhauls. Companies are making incremental changes, with their efforts rooted in leadership alignment and smarter collaboration with suppliers and customers.
Our take: The effect of the prolonged uncertainty of the tariff situation is compounding the many geopolitical risks impacting shipping as well. The Red Sea is flaring up again as are broader tensions in the Middle East and Ukraine. Supply chain flexibility remains the name of the game right now.
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President Trump has sent tariff warning letters to over two dozen countries, setting August 1 as the deadline to strike trade deals or face steep U.S. import taxes. Notably, Trump is being the most aggressive with Canada and Brazil, stating that new duties of 35% and 50% respectively, are on the way. While most of the new tariffs are lower than those announced in April, a few increased slightly. Countries like Myanmar, Cambodia, and Bangladesh saw reduced rates and signaled readiness to negotiate. Thailand and South Africa emphasized diplomatic engagement, while Japan and South Korea expressed disappointment but left the door open for talks. Trump also warned against retaliation, threatening further tariff hikes. The overall message: cut a deal or pay more… and do it quickly.
Our take: Looking for some optimism, it is hopeful that the announced new tariff amounts are a ceiling to what is to come. So, at the very least, importers can calculate the worst-case duty they’ll be paying moving forward. It’s probably not ideal for anyone, but at least it offers some clarity.
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