Could the global industrial automation market face another supply chain crunch?

Blake Griffin, Interact Analysis Research Manager.

© Interact Analysis

Industrial automation OEMs and their customers have been faced with a year of uncertainty in 2025. A dramatic shift in US trade policy has seen the market adopt a stance of ‘wait and ‘see’. Even now [end of 2025], the US and China remain locked in talks over the details of sales of rare earth material, weeks after US President Donald Trump and his Chinese counterpart, Xi Jinping, reached an agreement that was expected to increase exports. While the US has rolled back tariffs since those initial talks, China has yet to confirm full details of the truce. Reports suggest both sides have until the end of November to agree to ‘general licenses’ for exports of rare earth materials from China to the United States. 

For automation OEMs, uncertainty has led to delayed orders from customers rather than outright cancellations. However, these delays could lead to a ‘pop’ in orders during 2026, particularly if a predicted reduction in interest rates creates the right conditions for a strong rebound in the first half of 2026. While this is good news for the industrial automation industry, questions over the supply of industry-critical raw materials are a cause for concern, as it could place significant strain on supply chains at a crucial time.