The Uneven Distribution of Tariff Impacts: Uncovering Hidden Vulnerabilities and Improving Supply Chain Resilience

As businesses await the results of pending court decisions and government negotiations on new U.S. tariffs, they don’t need to wait to begin strategic planning. First, they must consider the potential impacts beyond headline rate changes to craft an effective response plan. Beneath the surface, trade policy outcomes ripple unevenly across U.S. industries and businesses — shaped by companies’ dependency on imports, how steep the tariff increases are, and how much financial cushion they have to absorb the shock. 

Dun & Bradstreet’s latest analysis, available in a new white paper titled “The New Trade Order”, reveals that even identical tariff rates can have vastly different consequences, depending on a company’s starting point. From textiles to auto parts, and from small manufacturers to multinational giants, the effects of trade shifts are anything but uniform. Assessing these nuances is critical for businesses looking to protect margins, maintain supply chain continuity, and stay competitive in a rapidly evolving global market.

Analyzing Disparate Impacts Across Sectors

To understand how the same tariff rate can impact industries disproportionately, consider wool and raw hide imports. Both are facing a 10% tariff in 2025; however, wool importers previously faced an 8% duty, while raw hides were previously subject to a 1% duty.  

“Despite identical headline tariffs in 2025, wool-based imports are anticipated to experience a far more significant escalation in landed costs. It’s a subtle but critical distinction,” said Dr. Arun Singh, Global Chief Economist at Dun & Bradstreet.  

To understand the depth of a sector’s reliance on imports and the resulting cost exposure, a business’s share of imported production inputs must be evaluated alongside the rate of potential tariff increases on those imports. For example, the apparel and automotive sectors each import 39% of their production inputs; however, due to sharper tariff increases, the cost to import apparel could rise by 38%, while the cost of auto imports could rise by just 13%.

Recent news headlines suggest businesses’ strategies to address the impacts of higher import costs vary, from announcements of broad price hikes to no substantial price changes, to a product-dependent combination of both. 

Of course, a sector’s capacity to absorb cost shocks depends on its existing margin cushion.  

“Even with identical cost exposure, a high-margin sector is far more resilient,” Singh said. “For instance, textile mill products and machinery have comparable levels of cost exposure, but the textile sector operates at a 7% margin versus 17% for machinery – rendering the former far more susceptible to erosion of profitability.”

Businesses’ resilience in the face of shifting trade policy is also tied to their bargaining power. Large multinational enterprises with diversified supply chains and deep vendor relationships can leverage their economies of scale to negotiate price concessions to offset a portion of the tariff impact.

However, U.S. Census data shows nearly 97% of U.S. businesses involved in importing are small or medium-sized. 

“These firms – often characterized by limited purchasing volumes, narrower supplier networks, and thinner margins – lack the bargaining leverage to compel foreign vendors to absorb tariff costs,” Singh said. “Consequently, much of this tariff burden is expected to cascade downstream through supply chains, ultimately materializing as higher prices for end users and margin compression for U.S. businesses. This pressure is likely to be specifically acute for small and medium-sized enterprises operating in price-sensitive markets or lacking the scale to rapidly reconfigure supplier networks.”

Looking Beyond Direct Suppliers

To accurately analyze potential tariff impacts, businesses must track not only the rapidly changing overall trends of international trade and industry-level impacts, but also the deep, multitiered supply chain connections among U.S. businesses and foreign suppliers. 

Dun & Bradstreet’s data reveals these connections go well beyond the obvious links demonstrated in direct supplier relationships. Out of an estimated 4.1 million companies supplying U.S. businesses, 1.1 million are based in other countries. More than 176,000 of those foreign suppliers are based in the Chinese Mainland, and approximately 112,000 are based in India — these include not only direct suppliers, but also their suppliers’ suppliers (Tier 2 Suppliers) and the companies supplying the Tier 2 Suppliers (Tier 3 Suppliers).

But what transforms such interconnectedness from structural to strategically critical is the concentration of key suppliers within these tiers. According to Dun & Bradstreet’s analysis:

• 37% of Tier 1 China-based suppliers meet criticality thresholds, based on both spend volume and dependency levels.

• 18% of Tier 2 and 15% of Tier 3 suppliers also qualify as critical—despite being far less visible in traditional procurement oversight.

“The deeper layers of the supply chain represent hidden chokepoints, particularly in complex sectors such as auto parts and electronics,” Singh said. 

Evaluating Supply Chain Vulnerabilities

To identify sectors’ susceptibility to tariff-related disruption, Dun & Bradstreet utilizes its Sector Vulnerability Matrix, a diagnostic framework developed to integrate the potential impacts of tariff rate increases, import rates, and operating margins across industries.

D&B Shipping Insights data reveals that the sectors identified as highly vulnerable to tariffs in the Sector Vulnerability Matrix experienced decreased U.S. import volumes in key product categories during the first part of 2025. A Dun & Bradstreet analysis comparing D&B Shipping Insights data on U.S.-bound maritime container bookings year-over-year shows the following changes across sectors facing high tariff cost exposures and low margins:

Dun & Bradstreet data also shows vulnerable industries’ reactivity to trade policy changes, as well as their comparative import levels over time using historic booking data. D&B Shipping Insights data reveals the 90-day tariff pause on China-U.S. imports on May 12 was followed by an immediate jump in apparel imports, bringing apparel imports to one of the highest points over the past two years, and bringing the overall rate of apparel imports in 2025 in line with 2024 levels.

D&B Shipping Insights also reveals the shifting trade relationships among sectors and countries. For example, vulnerable industries identified in the Dun & Bradstreet Sector Vulnerability Matrix have reduced their imports from China this year — with the exception of electronics, which were exempted from U.S. country-based tariffs in April. Maritime container bookings for imports of electronics from the U.S. to China increased 9.2% through May 28 this year vs. the same time period in 2024. However, overall bookings in the sector remained down 8.8% year-over-year.  

What This Means for Business Leaders

Tariffs don’t impact all businesses equally — and the most vulnerable aren’t always the most obvious. As our data shows, the real risk lies in the details: the size of the tariff increase, the depth of import reliance, and the resilience built into a company’s margins and supplier networks.

To stay competitive amid looming trade cost pressures, U.S. businesses must move from reactive cost absorption to proactive supply chain strategy and effective risk management. 

Now is the time to act. 

By leveraging tools like Dun & Bradstreet’s Supply Chain Evaluation, D&B Shipping Insights, D&B Risk Analytics –  Supplier Intelligence, and D&B Risk Analytics – Compliance Intelligence, businesses can uncover hidden risks, identify critical chokepoints, and make informed decisions to strengthen their supply chains.

Trade policy can be unpredictable — but your response doesn’t have to be.

Four Steps to Navigating Tariff Turbulence with Confidence

1. Quantify Exposure. Model the Impact. 

Understanding risk is the critical first step to effective mitigation. Businesses must quantify how proposed or actual tariff changes could ripple through supply chains and impact input costs, margins, and cash flow.  

But here’s the challenge: businesses’ limited visibility beyond their direct suppliers creates blind spots when it comes to understanding where cost pressures might emerge deeper in the supply chain and how severely they could cut into margins. That’s where Dun & Bradstreet’s complimentary Supply Chain Evaluation comes in.

Utilizing proprietary data and powered by the Dun & Bradstreet D-U-N-S® Number, this evaluation helps businesses visualize how tariffs could impact their supply chain costs. With insights into 21 billion business relationships across Tier 1, 2, and 3 suppliers, a Dun & Bradstreet supply chain evaluation brings clarity to complexity — so you can act before disruptions hit.

2. Diversify Suppliers. Build Resilience. 

Diversifying your supplier base is no longer just a good idea; it’s a strategic necessity. But finding the right alternative isn’t easy. You need to weigh cost, compliance, technical capabilities, and regulatory familiarity. Without reliable data, the process can be slow, costly, and misaligned with your long-term goals.

Dun & Bradstreet connects businesses to a vast network of over 600 million global entities, providing unparalleled access to comprehensive supplier data. With D&B Risk Analytics – Supplier Intelligence, businesses can quickly shortlist viable partners, validate their credentials, and begin building resilient supply networks grounded in data-driven confidence.

3. Onboard Suppliers with Urgency. Reduce Risk Early.

Speed matters when onboarding new suppliers — but so does diligence. Acting with urgency is essential to avoiding supply chain disruption and staying ahead of competitors in securing reliable supply, but bypassing due diligence exposes a business to compliance breaches, regulatory fines, and reputational damage. 

D&B Risk Analytics – Compliance Intelligence empowers businesses to move fast without compromising standards. By screening potential suppliers against 400+ watch lists and uncovering ultimate beneficial ownership, Dun & Bradstreet delivers a comprehensive compliance risk assessment across every tier of the supplier base, helping companies engage suppliers faster, remain compliant, avoid regulatory risk, and build resilient supply chains from the get-go.

4. Monitor Continuously. Stay Ahead of Risk. 

Risk doesn’t stop once a supplier is onboarded. Ongoing monitoring is essential to catch early warning signs before they become costly supply chain disruptions.

With D&B Risk Analytics – Supplier Intelligence, businesses get real-time alerts on supplier health and risk indicators, enabling them to respond to issues before they escalate, maintain supply chain resilience, and keep operations stable long-term.