Extreme precipitation events have become increasingly frequent and intense due to climate change, posing significant but still poorly understood risks to firms, particularly within the context of global supply chains. This study investigates how downstream shocks propagate upstream. Using a global panel of firm-level supply-chain links, we find that extreme precipitation affecting customers reduces suppliers’ accounts receivable, consistent with a demand-driven contraction. The decline in trade credit is smaller for suppliers with weaker bargaining power, shorter-tenure relationships, or lower leverage, indicating that these firms absorb part of their customers’ liquidity risk. Our evidence uncovers a previously overlooked demand channel for climate risk, enriching the supply-chain finance literature and offering concrete guidance for firms and regulators seeking to fortify global production networks against environmental risks.