A new analysis from JPMorganChase reveals that midsize firms could face up to $187.7 billion in direct import costs under 2025’s full universal tariffs. With deep reliance on high-tariff countries and thin-margin sectors, these firms now represent a blind spot in enterprise supply chain resilience models.
Over Reliance on China Leaves Midsize Networks Exposed
The tariff architecture now taking shape in 2025 is unearthing a structural vulnerability: midsize firms are far more exposed to high-tariff countries than the U.S. corporate average. According to the JPMorganChase Institute, 21% of imports by midsize businesses come from China, now subject to a 55% tariff. That share is materially higher than the national import profile, and the cost implications are severe.
Many of these firms operate as Tier 2 or Tier 3 suppliers within larger industrial networks. They provide auto components, chemicals, electronics, and other intermediate goods that feed into enterprise-level manufacturing. A spike in input costs, or a delay in sourcing reconfiguration, could compromise production schedules upstream. These aren’t fringe cases; they are embedded links in critical supply flows.
At the same time, midsize wholesalers and retailers, sectors with the highest direct tariff exposure, are built to move volume, not absorb shocks. Operating on tight margins, they lack the pricing power and global flexibility of larger firms. For global firms, the immediate implication is clear: if cost pass-through accelerates at the mid-tier level, disruption will cascade across both sourcing and customer fulfillment.
Universal Tariffs Redraw the Risk Map
The full universal tariffs introduced in April could raise midsize firms’ import costs more than sixfold compared to the beginning of 2025. Even after some reductions, JPMorgan estimates that current policy still carries $82.3 billion in direct exposure. What complicates planning further is the volatility of implementation: temporary pauses, sudden escalations, and differentiated rates by country are making it difficult to model long-term landed costs.
Geographically, the concentration risk is mirrored in domestic logistics. Regions like Southern California, Texas, and the Northeast are expected to feel the sharpest impact, given their dense clustering of midsize importers. For firms managing regional distribution or dependent on these nodes for final assembly, the disruption risk is spatial as well as financial.
Critically, many of these midsize suppliers are not highly digitized. Their ability to respond to shifting tariff regimes—through nearshoring, order rerouting, or supplier diversification, is limited. Companies that assume continuity at the lower tiers may be underestimating both the pace and magnitude of tariff-induced failure points.
Rethinking Resilience Beyond the Top Tier
The focus on Tier 1 visibility has long dominated supply chain risk planning, but the tariff exposure now facing midsize firms underscores a more uncomfortable truth: the real fragility may lie in the layers supply chain leaders have deprioritized. As tariff regimes shift from exception to norm, the assumption that scale equates to stability no longer holds. What matters more is elasticity, of margin, of sourcing pathways, of response time. It’s not just the biggest suppliers that require strategic attention, but the ones least equipped to adapt.
