When systems strain: Climate uncertainty and the pass-through of global shocks

This study examines how global supply chain disruptions and climate policy uncertainty shape import price inflation in the United States, and how these forces interact during periods of heightened stress. Using monthly data from November 2002 to June 2025, the analysis shows that supply chain pressure steadily drives import prices upward. Climate policy uncertainty also increases costs, yet it reduces the immediate transmission of supply shocks. This moderating effect becomes stronger during major disruptions such as the Covid-19 pandemic and the Russia–Ukraine conflict, indicating that regulatory ambiguity reshapes pricing behavior when operational risks intensify. Robustness tests based on peak detection confirm the stability of this pattern. The results further suggest that this moderation operates through multiple channels, including inventory management, sourcing adjustments, and delayed investment, which help firms absorb shocks. In addition, sector-level analysis reveals heterogeneity in these dynamics, with energy and manufacturing imports responding differently to overlapping supply and policy pressures. The findings demonstrate that clear climate policy direction can ease inflationary pressure and highlight the need for resilient supply chain systems and credible regulatory planning.