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Reactive supply chain strategies could stop the wheels from turning

[ May 19, 2026   //   ]

Wes Yardley, UK and IE operations director at Customs Support Group explains why reactive customs strategies risk undercutting automakers’ response to Iran war supply chain challenges.

Worsening geopolitical pressures and increased complexity at the border have made customs and compliance centre-stage for many companies in the automotive supply chain. Now, with the US-Israeli attack on Iran creating delays and driving up the price of everything from plastic to energy, the margins for error in the customs process have become narrower than the blockaded Strait of Hormuz.

Making matters worse, our research has found that at the outset of the year, customs and compliance workarounds to account for trade uncertainty were being addressed much more reactively than strategically. This approach is already harming automakers as vital materials and energy supplies are shaken by the blossoming conflict. The ‘wait-and-see’ approach will not be viable in the long term, as geopolitical conflict, shifting demand patterns and regulatory bottlenecks continue to rattle the foundations of global supply chains.

What we’re seeing is a fundamental reset in the global trade landscape. Yet fewer than one in five manufacturers are taking the necessary proactive steps required to thrive in this new reality: a world in which customs and trade expertise, strengthened by strategic external partnerships, will play an increasingly decisive strategic role.

A crisis-rich environment

Entering 2026, automotive supply chains found themselves facing meaningful, but not insurmountable, pressures.

Backlogs stemming from stricter customs restrictions and regulations are raising the risk and cost of moving goods and materials through the global supply chain. Analysis of automakers’ financials has placed the cost of the Trump administration’s tariffs in the region of $35 billion since 2025. As of this month, the US levies a 15% tax on vehicles from the EU, Japan, and South Korea. Despite falling under the North American free-trade framework, vehicles from Canada and Mexico must contend with a 25% tariff on the value of any parts not sourced in the US. And a 50% tariff on steel and aluminium, exacerbated by rising costs as a result of the war in Iran, is also hitting auto-makers.

The war in Ukraine, US tariffs, and mounting regulatory complexity at national borders are all serious issues, but our data points to the majority of European auto industry manufacturers being content to see their approach to cross-border logistics manage crises on a case-by-case basis.

The Strategic Radar Customer Survey 2026 — which evaluated the responses of around 200 European manufacturers and retailers — found that, while concern about long-term trade and regulatory volatility is a growing concern among strategic decision-makers, preparedness remains limited. Most organisations were content to adopt a ‘wait-and-see’ approach, postponing action despite growing trade barriers, regulatory pressure and geopolitical disruptions.

The US and Israel’s assault on Iran throws the inadequacy of that approach into sharp relief – a war which is already being called the “largest supply disruption in history.”

Despite the IEA’s efforts to ease oil market shocks by coordinating the release of more than 400 million barrels of crude from strategic reserves around the world – more than double the number of barrels released in the wake of Russia’s invasion of Ukraine – the price of oil has continued to climb.

Knock-on effects

The disruption of trade throughout the Middle East is affecting not just the price of oil, but also aluminium, semiconductor parts and plastics. All of which are crucial to the automaker supply chain.

The Middle East produces about 10% of the world’s aluminium, and petrochemical derivatives are used to make plastics, causing the price of automotive plastics and chemicals to jump by 15-25%. Vital semiconductor manufacturing component supply chains — including helium, often supplied from Qatar — are creaking under the pressure.

The war in Iran isn’t just driving up costs and creating delays; industry experts are also seeing it accelerate trends around the adoption of EVs. In Australia, for example, there was already a strong shift to electrified vehicles before the war on Iran disrupted energy markets, with new battery vehicles selling at nearly double the rate from a year ago, according to February automotive data. It’s expected that, with prices at the petrol pump rising steadily, automakers may need to pivot to accommodate a bump in demand for electric vehicles.

Despite multifaceted forms of exposure, risk mitigation and resilience response measures remain both limited and reactive in organisations’ customs processes. Navigating geopolitical disruption remains a persistent reality for European auto industry manufacturers, but the majority aren’t taking the necessary steps to get ahead of this crisis, let alone the next one.

Proactive partnering

Despite the exposure, most organisations have yet to implement meaningful risk mitigation or resilience measures, with responses largely limited to operational supply chain adjustments rather than structured trade or customs strategies. Trade and tariff risks are predominantly managed reactively and only a minority of automakers and manufacturers are adopting proactive, forward-looking approaches, according to our findings.

Our report also indicates a continued reliance on external customs partners for reactive response strategies. Driven by expertise gaps, capacity constraints and increasing regulatory complexity, this reliance is increasingly positioning external customs experts as long-term strategic enablers.

With a reactive approach unlikely to remain viable, regulatory pressure, enforcement intensity and geopolitical volatility are expected to force more proactive and structured responses. Organisations that delay preparedness may face higher compliance risk, cost exposure and operational disruption when reactive options narrow.

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