Since Liberation Day on April 2, 2025, the tariff situation has been nothing short of volatile. In February 2026, the Supreme Court ruled that tariffs enacted under IEEPA were invalid, leading some to predict that tariffs would fade in the second half of 2026. That didn’t happen.
After the ruling, the Trump Administration quickly introduced new tariffs under Section 122, which included a temporary 10% blanket tariff, with plans to increase it to 15%; the maximum allowed under Section 122. While the surcharge expired on July 24, 2026, several tariff programs remain in force.
Today’s tariff landscape includes active Section 301 rates of 10–12.5% applied to 60 countries, a 25% tariff on imports from Brazil, a 25% tariff on all non-USMCA automobiles, and a 25%–50% tariff on steel, aluminum, and copper from all countries.
All the while, countries including China and Canada have imposed retaliatory tariffs on the United States. On September 8, 2026, Canada introduced dollar-for-dollar countermeasures on up to 3,000 products and a 50% tariff on critical industries, including aluminum, steel, and dairy.
Even before Canada’s response, industries were already feeling the strain of tariffs. By March 2026, U.S. automotive companies had incurred up to $35 billion in tariff-related costs, and that figure continues to grow.
So, what will these new enactments mean for supply chains?
Although the trade war may be politically driven, the largest victims of tariffs are middle-tier suppliers and consumers. Many suppliers are locked into customer contracts and operate on thin margins, while consumers ultimately face higher prices passed through the supply chain.
These middle-tier suppliers, often smaller private companies, are already absorbing a wave of price increases. Additional costs may force them to compromise on quality, efficiency, or security, creating a ripple effect for their customers and, ultimately, consumers.
To help clients understand how tariffs could affect their operations, RapidRatings conducted stress tests based on global supply chain structures and country-specific tariff rates. The analysis assumed companies offset half of their tariff costs through price increases. Here is what we found:
As shown in the stress test, a doubling of risk among private companies could create serious supply chain challenges. Specifically, high-risk and very-high-risk designations climbed 108% among private companies; nearly double the 56% increase among public companies. On average, private companies make up 75% of supply chains. They are the backbone of manufacturing and supply networks, and current tariff measures could push critical suppliers over the edge.
As tariff policy continues to shift and impact every industry, companies cannot afford limited visibility into supplier financial health. A supplier already approaching high risk could be further impacted by tariff-related pressure, making it critical to understand how that exposure affects your business.
The FHR provides a 12-month outlook on default risk with 90% accuracy, while also offering indicators of disruption and quality risk. Through the RapidRatings FHR Network, suppliers can benchmark against peers and access prescriptive actions to improve financial health.
