The United States is likely to experience an increase in product recalls across several major industries, including food, consumer goods, and automotive. This surge is driven by changes in global supply chains due to tariffs and new regulations.
Companies are feeling the pressure from tariffs, which may force them to seek cheaper materials or switch to new suppliers. This can happen quickly, often without enough time to thoroughly check these new sources. In industries where safety is crucial, like food and cars, this can lead to serious risks, according to Chris Harvey, a senior vice president at Sedgwick.
"Tariffs are affecting almost every industry, from automotive to electronics and even food," Harvey explained. He noted that when enforcement of regulations is relaxed, the risks increase even more.
Sedgwick’s latest Product Recall Index shows that manufacturers are facing a challenging environment. Rising costs, changes in ingredients, and less oversight are creating a situation where product safety failures are more likely.
Harvey warned that when companies rush to find alternative suppliers, they may end up with lower-quality components. This can introduce different chemicals and processes, leading to inconsistent quality and increased risk.
The situation is made worse by a shift in regulatory enforcement. Proposed budget cuts at the U.S. Food and Drug Administration (FDA) and changes at the Consumer Product Safety Commission (CPSC) suggest a softer approach to regulation, at least for now. This inconsistency in inspections can lead to mistakes or negligence, as some companies might cut corners on recalls by offering repairs instead of replacements or delaying action altogether.
Delays in sourcing replacement parts due to tariffs and supply chain issues can complicate product recalls. Companies that don’t respond properly to recalls may face severe consequences, including legal action. Harvey pointed out that there have been instances where a recalled product ended up being defective again, leading to a second recall, which can severely damage a brand’s reputation.
While there may be concerns about a decline in product safety reporting, Harvey believes that many companies will continue to act responsibly. "Most companies will still do the right thing when it comes to hazardous products," he said. However, he acknowledged that some might take advantage of the reduced enforcement environment.
The consumer goods and automotive sectors are particularly vulnerable. Sedgwick’s data shows that recalls in consumer products reached a 14-year high in the first quarter of 2025, with a 91% increase from the previous quarter. Interestingly, the number of units affected dropped by 44%, indicating a trend towards smaller, more focused recalls.
"This is a positive trend," Harvey noted, as it suggests that companies are identifying issues earlier and producing goods in smaller batches. However, the consumer goods sector faces challenges, especially with new initiatives aimed at banning certain additives in food products, which could lead to compliance issues and more recalls.
In the automotive industry, tariffs on imported parts can delay repairs and push manufacturers to source from unfamiliar suppliers. While software updates can simplify some fixes, many still require physical parts and dealer visits. Harvey emphasized the need for automakers to identify and vet backup suppliers proactively to avoid these risks.
To prepare for potential product recalls, businesses can take several steps. Sedgwick recommends that companies study industry trends, prepare recall management plans, communicate quickly and transparently, conduct mock recalls, and prioritize customer empathy during recalls.
Even with lower enforcement, the risks remain high. Harvey cautioned that retailers, consumers, and international regulators will continue to hold companies accountable. "No shortcuts," he advised. "Companies need to stay disciplined to maintain trust and avoid legal issues."