Blanket Tariffs Could Trigger Global Trade War, Peterson Institute Warns

The Peterson Institute for International Economics has issued a critical assessment of proposed blanket tariff policies, cautioning that such measures would carry substantial risks of triggering a global trade war. This analysis highlights the systemic nature of the threat—a policy affecting virtually all traded goods and multiple trading partners simultaneously, creating unprecedented exposure across supply chains worldwide. For supply chain professionals, this represents a structural inflection point requiring urgent scenario planning.

Blanket tariffs differ fundamentally from targeted sectoral measures; they eliminate geographical and commodity diversification strategies, forcing supply chain teams to rethink sourcing, routing, and inventory positioning almost simultaneously. The prospect of retaliatory measures compounds the challenge, as trading partners would likely impose counter-tariffs, creating bidirectional cost pressures and extended lead times. The timing and scope amplify the risk.

Unlike gradual policy transitions that allow phased adaptation, a blanket approach would shock the system immediately, disrupting established supplier relationships, transportation contracts, and global manufacturing footprints. Supply chain leaders must begin stress-testing their networks against multiple tariff scenarios now, establishing contingencies for cost absorption, price pass-through feasibility, and alternative sourcing.