**Introduction** Countries should assess tariff risk by looking beyond the share of exports directly targeted by tariffs. True exposure depends on how reliant industries are on foreign markets, imported inputs, concentrated supply chains, and strategically sensitive sectors. In highly integrated production networks, tariffs imposed on one country or production stage can generate indirect costs across regional and global value chains. As trade policy increasingly serves geopolitical and industrial objectives, tariff risk is now closely linked to supply chain resilience, economic concentration, and strategic dependence[1][2]. **Contextual background** Traditional assessments of tariff exposure focused mainly on bilateral export dependence and average tariff rates. However, trade tensions increasingly involve export controls, subsidies, local content requirements, investment restrictions, and security-related trade measures alongside tariffs[3]. At the same time, global production has become highly fragmented across borders. Many economies export indirectly through third-country assembly hubs or depend heavily on imported intermediate goods. This means countries with relatively low direct exposure to tariffs may still face substantial indirect disruption through supply chain effects, reduced investment, or weaker external demand[4]. **How countries should assess true tariff exposure** **1. Measure exposure across entire supply chains, not only direct exports** Countries should assess both direct and indirect trade dependencies. Many industries rely heavily on imported intermediate inputs that cross borders multiple times before reaching final consumers. Tariffs imposed at one production stage can therefore increase costs and disrupt production across supply chains[4]. Governments should evaluate: * Dependence on imported intermediate goods * Reliance on single-country suppliers * Exposure of major export sectors to downstream tariffs * Indirect export dependence through third-country production hubs This is particularly important in industries such as electric vehicles, electronics, semiconductors, and clean energy equipment, where production networks rely heavily on cross-border value chains spanning multiple economies[5]. **2. Assess concentration risks in markets, suppliers, and strategic sectors** Tariff vulnerability is significantly higher when exports or imports are concentrated in a small number of markets or suppliers. Economies that depend heavily on a single export destination are more exposed to abrupt tariff escalation or changes in trade policy[2]. Countries should evaluate: * Export concentration by destination market * Import concentration for critical inputs * Dependence on tariff-sensitive sectors * Geographic concentration in strategic supply chains These risks are especially significant in sectors increasingly shaped by industrial policy and national security considerations, including semiconductors, batteries, rare earths, and advanced manufacturing[6]. **3. Incorporate non-tariff and policy-related trade risks** Modern trade fragmentation increasingly operates through non-tariff measures rather than tariffs alone. Governments now use subsidies, local content requirements, procurement rules, export controls, and investment restrictions to reshape production and supply chains[3]. Countries should assess: * Exposure to local content requirements * Vulnerability to export controls and licensing restrictions * Dependence on subsidized foreign markets * Regulatory divergence across major trading blocs These measures can alter competitiveness and investment incentives even without formal tariff increases, creating longer-term uncertainty for firms and governments[1]. **4. Evaluate resilience and adjustment capacity** Exposure depends not only on the size of the tariff shock, but also on how effectively economies can adapt. Countries with diversified export structures, broader supplier networks, and stronger logistics systems are generally more resilient to trade disruptions[2]. Governments should assess: * Availability of alternative export markets * Industrial diversification * Capacity to substitute suppliers * Fiscal and financial capacity to support adjustment * Trade facilitation and infrastructure quality This shifts tariff-risk analysis away from narrow trade metrics toward a broader assessment of economic resilience and adaptive capacity[4]. **5. Analyze geopolitical alignment and strategic dependence** Tariff risks increasingly reflect geopolitical competition and strategic rivalry rather than purely commercial disputes. Trade restrictions are now frequently linked to national security, technological leadership, and economic resilience objectives[1]. Countries should examine: * Dependence on politically sensitive supply chains * Exposure to competing geopolitical blocs * Participation in supply chain arrangements with aligned partners * Vulnerability to sanctions or retaliatory measures Economies positioned between competing major powers may face elevated uncertainty if they depend heavily on both sides for trade, technology, or investment[6]. **Conclusion** Assessing true exposure to tariff risk requires a multidimensional approach that goes well beyond measuring direct exports affected by tariffs. Countries must evaluate supply chain integration, concentration risks, industrial structure, adjustment capacity, and geopolitical dependence at the same time. In a more fragmented global economy, the greatest vulnerabilities may come not from tariffs alone, but from excessive dependence on concentrated and strategically exposed trade relationships
