Gartner: How Geopolitical Disruption is Reshaping Manufacturing Supply Chains, Technology, and Project Portfolios

The 2025 spike in trade barriers and protectionist policies caught many manufacturing leaders off guard. Tariffs expanded. Export controls tightened. Data sovereignty rules changed. And supply chains designed for efficiency over resilience began breaking under pressure.

The following 2026 Gartner® report, 2026 Top Trends for Manufacturing CIOs: Challenges, identifies geopolitical disruption as one of three headwinds that will define the manufacturing sector over the next three years. Unlike technical debt and ransomware, which organizations can address internally, geopolitical risk is externally imposed and largely beyond a manufacturer's direct control. What is within their control is how they prepare for it.

For PMO leaders, operations executives, and CFOs managing complex manufacturing portfolios, geopolitical volatility is not an abstract macroeconomic concept. It is a concrete threat to project timelines, input costs, supplier availability, and access to technology. The organizations that build scenario planning, supply chain intelligence, and portfolio agility into their operating model will absorb these disruptions better than those that react to each new tariff or export restriction as a surprise.

Key takeaways for manufacturing leaders

1. Globalization is declining, and the U.S. led a major shift in 2025. The U.S. imposition of extensive tariffs across many trade partners marked a departure from the globalized system it had previously built. Manufacturing supply chains designed around global efficiency are being restructured around regional resilience.

2. Supply chains are becoming more fragile and fragmented. Manufacturers face tariffs, compliance costs, and supplier disruptions that add logistics volatility and increase input costs. Just-in-time systems are proving too vulnerable for current levels of trade volatility.

3. Access to critical materials is becoming less reliable. Nations are securing domestic supply or restricting exports of minerals, specialty metals, and semiconductors. Shortages and price swings make capacity planning harder, and supply chain diversification is now a strategic requirement.

4. Regulatory divergence across regions is increasing compliance complexity. Differences in data rules, technology standards, safety requirements, and trade regulations require market-specific compliance approaches. This raises administrative costs and slows the pace of global scaling.

5. AI adoption is being complicated by geopolitics. Geopolitical competition over AI leadership is driving export controls on chips and evolving regulatory policies. Stricter data sovereignty requirements are reshaping how manufacturers use distributed cloud systems and shared analytics platforms.

What changed in 2025

Geopolitical tension is not new. What made 2025 different was the scale and speed of policy changes, particularly in trade.

The U.S. tariff expansion

The U.S. imposed extensive tariffs on multiple trading partners in 2025, and the Gartner® report describes this as a significant departure from the globalized system the U.S. had previously promoted. For manufacturers headquartered in the U.S., this meant higher input costs for imported materials and components. For manufacturers with global supply chains, it meant rethinking sourcing strategies that had been optimized for decades.

The tariff impact was not limited to direct cost increases. It created uncertainty. When tariff rates can change based on political dynamics rather than economic fundamentals, manufacturers cannot plan procurement costs with confidence. That uncertainty ripples through every manufacturing project in the portfolio: budget estimates become unreliable, contingency reserves are consumed more quickly, and financial forecasting accuracy declines.

Conflicts and regional instability

Beyond trade policy, conflicts and regional instability disrupted access to raw materials, shipping routes, and energy resources. The Gartner® report notes that as regionalization grows and global tensions rise, such disruptions are likely to become more frequent. For manufacturers running capital projects with long lead times, each disruption creates a schedule risk that cascades across the portfolio.

Data sovereignty and technology controls

Stricter regulations on data sovereignty are reshaping how manufacturers use digital tools. Cloud-based analytics platforms, distributed manufacturing execution systems, and shared engineering collaboration tools all depend on the ability to move data across borders. When governments impose data localization requirements, manufacturers need to rethink their technology architecture for each region in which they operate.

Geopolitical competition over AI leadership adds another layer of complexity. Export controls on chips and evolving AI regulations create a moving target for CIOs who are trying to modernize manufacturing operations. The technology stack that works in the U.S. may not be legal or available in certain international markets.

How geopolitical disruption hits manufacturing projects

The macroeconomic headlines about tariffs and trade wars translate into specific, measurable impacts on manufacturing project portfolios.

Cost escalation across active projects

When tariffs increase the cost of imported steel, aluminum, electronic components, or specialty materials, every active project using those inputs sees its budget affected. For manufacturers managing capital expenditure projects and NPI programs, a 10-25% increase in material costs can shift a project from profitable to marginal in a single quarter.

The problem is compounded when project budgets were approved before the tariff change. Re-baselining every active project takes time and creates governance overhead. Without a centralized portfolio view, some cost impacts go undetected until projects are already over budget.

Schedule disruption from supply chain fragmentation

Supply chains that were built for speed and cost efficiency are being restructured for resilience. That restructuring takes time. Qualifying new suppliers, establishing logistics routes, building safety stock, and testing alternative materials all add weeks or months to project schedules.

The Gartner® report: 2026 Top Trends for Manufacturing CIOs: Challenges describes how just-in-time systems are proving too vulnerable for current levels of geopolitical and trade volatility. Companies are shifting toward larger inventory stocks, multisourcing arrangements, and regional supply chains. These strategies improve resilience but require higher investment and longer planning cycles. For PMO leaders managing manufacturing supply chain risk, this is a fundamental shift in how projects are planned and resourced.

Resource reallocation

When geopolitical disruption forces a manufacturer to qualify new suppliers, establish regional manufacturing capabilities, or redesign products to use alternative materials, these activities consume engineering, procurement, and project management resources. Those resources are typically already allocated to existing portfolio commitments.

The result is a capacity crunch. Organizations that lack visibility into portfolio-level resource management cannot easily redeploy resources without causing downstream delays on other projects. The decision to staff a supply chain remediation effort often means pulling people off an NPI or capital project, and the portfolio-level impact of that trade-off is only visible if you can see all projects together.

Compliance burden

Regulatory divergence across regions creates a growing compliance burden for global manufacturers. The Gartner® report notes that differences in regulations related to data, technology, safety, sustainability, and trade require market-specific approaches to compliance. Each compliance variation is a project-level constraint that consumes time, resources, and budget.

For manufacturers in aerospace, defense, and government contracting, compliance is already the single largest administrative overhead. Adding trade compliance, data sovereignty requirements, and evolving export control regulations to existing regulatory frameworks compounds the workload. Organizations with structured project management practices for regulated manufacturing are better positioned to absorb this burden, but only if compliance workflows are integrated into project governance rather than bolted on as a separate process.

What the Gartner report recommends

The Gartner report: 2026 Top Trends for Manufacturing CIOs: Challenges offers four concrete actions for manufacturing leaders facing geopolitical disruption.

Prepare core systems for AI adoption

This recommendation connects directly to the technical debt headwind covered in the same report. Mitigating technical debt, establishing a unified data foundation, and implementing AI governance are prerequisites for using AI to respond to geopolitical disruption. Manufacturers cannot rely on AI-powered scenario planning if the underlying data is fragmented and unreliable.

For organizations beginning to bring AI into project management, the lesson is clear: AI readiness starts with data readiness, and data readiness requires system modernization.

Plan for different geopolitical scenarios

The report recommends working with cross-functional leaders to assess the risks of government policy changes on operations, supply chain, and technology. This is not a one-time exercise. It is an ongoing planning discipline that should be built into the annual strategic planning cycle.

Scenario planning at the portfolio level means asking questions like:

• What happens to our project portfolio if tariffs on Chinese-sourced components increase by 25%?

• What if our primary European supplier loses export approval?

• What is the schedule impact if data sovereignty rules prevent us from using our current analytics platform in Asia-Pacific?

Organizations with portfolio-level visibility can model these scenarios against their current project commitments and identify the most vulnerable programs before a policy change hits.

Strengthen the technology backbone of the supply chain

The report calls for investing in supply chain intelligence and supplier management capabilities. This means more than tracking purchase orders. It means understanding supplier risk profiles, monitoring geopolitical exposure by supply chain node, and having alternatives pre-qualified before disruption occurs.

For PMO leaders, this translates to integrating supply chain risk data into the project risk register. When a project depends on a single-source supplier in a geopolitically volatile region, that dependency should be visible in the portfolio risk view, not buried in a procurement spreadsheet.

Enhance regulatory compliance through a digital thread strategy

The Gartner® report recommends adopting a digital thread strategy for product traceability. A digital thread that connects design, production, and service data provides the documentation and audit trail manufacturers need to demonstrate compliance across multiple regulatory regimes.

This is particularly relevant for manufacturers in aerospace and defense, where regulatory requirements span export controls (ITAR, EAR), government contract compliance (DCAA, DCMA), and data sovereignty obligations. A digital thread reduces the manual effort required to prove compliance and provides the traceability needed to respond quickly when regulations change.

Building portfolio resilience in a volatile geopolitical climate

Geopolitical disruption is structural, not cyclical. Manufacturers cannot wait for trade tensions to ease. They need to build resilience into their operating model now.

Diversify supply chains at the project level

Supply chain diversification cannot remain a procurement-only initiative. It needs to be visible at the project and portfolio level. PMO leaders should track supplier concentration risk for every active project and flag dependencies on single-source suppliers in volatile regions.

Build scenario planning into portfolio governance.

Portfolio review meetings should routinely include geopolitical scenario analysis.

• What are the top three policy changes most likely to affect the current portfolio?

• What is the estimated cost and schedule impact?

• What mitigation actions are available?

This kind of structured analysis turns geopolitical risk from a vague concern into a quantifiable input for portfolio decision-making.

Invest in regional manufacturing capabilities.

For global manufacturers, regionalization is not optional. It is becoming the default operating model. Building regional production capabilities, qualifying regional suppliers, and establishing regional compliance frameworks are multi-year investments that should be managed as strategic programs within the project portfolio.

Get the full Gartner analysis.

The 2026 Top Trends for Manufacturing CIOs: Challenges report provides manufacturing leaders with Gartner® analysis of how tariffs, export controls, data sovereignty, and regional instability are reshaping the industry. Download the report to access the full set of recommended actions for preparing your organization, supply chain, and technology strategy for continued geopolitical volatility.

Disclaimer

Gartner, 2026 Top Trends for Manufacturing CIOs: Challenges, By Brady Barnes, Simon Jacobson, Katell Thielemann, Chris Campbell, Bettina Tratz-Ryan, Sudip Pattanayak, Scot Kim, Jonathan Davenport, Kentaro Shikanai, Alexander Hoeppe, 18 february 2026

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