Upstream Investment and Arrears Clearance

Cairo plans to eliminate $1.3 billion in arrears to foreign energy partners by end-June, down from $6.1 billion in mid-2024. This is reviving exploration by BP, Eni, Shell, Chevron, and Apache, improving investor sentiment and supporting medium-term supply security and industrial reliability.

US Metal Tariffs Escalate

New U.S. rules now apply 25% tariffs to the full value of many steel, aluminum, and copper-based products, sharply increasing costs for Canadian manufacturers. Companies report cancelled orders, suspended forecasts, and potential production shifts, undermining cross-border supply chains and investment decisions.

B50 Biodiesel Reshapes Palm Oil

Indonesia will launch B50 in July 2026, diverting millions of tons of palm oil toward domestic fuel. The policy may save about Rp48 trillion and cut diesel imports, but it could tighten export availability and alter pricing for food, chemicals, and biofuel users.

War-Driven Security Disruptions

Israel’s conflict environment remains the dominant business risk, with missile threats extending to Haifa and other logistics hubs. Persistent hostilities raise insurance, security, and contingency costs, while threatening trade flows, asset protection, workforce mobility, and investor confidence across sectors.

Labor Regulation Cost Pressure

Brazil’s policy debate on working-time and labor protections is raising concern over future operating costs, especially in services, retail, and platform-based sectors. Even before reform, wage pressures and labor-market tightness are contributing to sticky services inflation and compliance risk.

Logistics Corridor Expansion Accelerates

Saudi Arabia Railways launched five new freight corridors linking Gulf ports, Red Sea gateways, and inland hubs, while Red Sea ports can handle over 17 million containers annually. This improves rerouting capacity, shortens transit times, and strengthens supply-chain resilience.

Trade Remedies Pressure Broadens

Vietnamese exporters face expanding anti-dumping and trade-remedy exposure beyond the US, including Australia’s possible steel case. As Western markets intensify enforcement, companies in metals and other sensitive sectors must strengthen documentation, diversify markets and tighten origin compliance to protect market access.

Energy Shock Margin Squeeze

March producer prices rose 0.5% year on year after more than three years of factory deflation, driven mainly by higher oil and commodity costs. With consumer demand still weak, manufacturers struggle to pass through inputs, squeezing margins and complicating procurement and pricing strategies.

Foreign investment screening intensifies

Strategic sectors, especially critical minerals, face tighter national-interest scrutiny and more complex approval pathways, including FIRB review. While Australia remains investable, cross-border deals increasingly require careful structuring, longer lead times, and sensitivity to security, ownership, and technology-transfer concerns.

Rupiah Pressure and Inflation Risks

Bank Indonesia is expected to hold rates at 4.75% as inflation reached 3.48% in March and the rupiah weakened about 3% this year, briefly breaching 17,000 per dollar. Higher imported energy costs raise hedging, financing, and pricing risks for foreign businesses.

China-Driven Export Dependence

Brazil’s exports to China reached a record US$23.9 billion in Q1 2026, with crude oil exports to China surging 122% and accounting for 57% of Brazil’s oil shipments. Strong demand supports exporters, but concentration raises vulnerability to Chinese policy shifts.

Investment Reform Versus Delivery

The government is marketing an improved investment climate, citing R1.56-R1.57 trillion in pledges since 2018, but only about R600 billion has flowed into the economy. For investors, the central issue is execution, approvals, service delivery and project conversion.

Semiconductor Controls Tighten Further

Washington is advancing tougher semiconductor export controls and legislation targeting China’s access to DUV tools, parts and servicing. The measures strengthen technology decoupling, affect equipment makers and chip supply chains, and raise strategic importance of allied manufacturing and compliance screening.

Selective but Slower Investment Momentum

First-quarter 2026 investment is forecast at Rp497 trillion, up 6.9% year on year, with downstream sectors still attracting capital from China, Japan, and South Korea. Yet weaker business expectations and geopolitical risk point to more selective, slower foreign direct investment decisions.

Trade Diversification Toward China

Zero-tariff access to China from 1 May 2026 could materially expand exports and attract manufacturing investment, including automotive projects. However, benefits depend on regulatory compliance, localisation, logistics performance and firms’ ability to build distribution and market access.

Regulatory and Data Compliance Tightens

Foreign firms face a persistently demanding operating environment shaped by market-access frictions, regulatory scrutiny and data-security controls. Even without dramatic new crackdowns, rising compliance burdens, licensing uncertainty and policy opacity are increasing operational risk, especially in technology, consulting, industrial and cross-border data activities.

Critical Minerals Equipment Upswing

Finland’s mining expansion and updated mineral strategy are strengthening demand for mobile machinery across extraction, processing, and support services. With Finland positioned in Europe’s battery and critical raw materials chain, foreign suppliers can benefit, though permitting timelines remain commercially important.

Currency Stability Versus Hot Money

Recent inflows of $1.78 billion into government debt helped stabilize the pound, but much support still appears short term. Companies face ongoing exchange-rate risk, profit repatriation uncertainty, and exposure to sudden portfolio reversals if regional or global sentiment deteriorates.

War-Economy Production Model Emerging

Government and industry are shifting toward a ‘war economy’ approach, with co-financing for priority capacity and faster output scaling. MBDA plans a 40% production increase this year, while firms like Renault, Safran, and Airbus expand defense-related manufacturing and innovation programs.

Growth Slows Amid Inflation

South Korea faces a tougher macro mix as growth forecasts fell to around 1.92% while inflation expectations rose to 2.63%. The Bank of Korea held rates at 2.5%, leaving businesses exposed to weaker domestic demand, financing uncertainty and stagflation concerns.

Industrial Policy Turns More Active

Ottawa is moving toward a more interventionist industrial strategy centered on value-added production, local-content procurement, strategic sectors, and supply-chain resilience. This may create incentives in clean technology, aerospace, defense, and processing, but also introduces policy complexity and procurement-related trade frictions.

Cyber Threats Hit Operating Environment

Taiwan’s government network faced more than 170 million intrusion attempts in the first quarter, alongside warnings of data theft and election interference. Companies should expect stricter cybersecurity expectations, higher resilience spending, and elevated operational disruption risks for critical sectors.

Policy Activism Raises Execution Risk

The government is increasingly using quotas, export duties, subsidy adjustments, and interventionist industrial measures to manage fiscal and strategic pressures. For international businesses, frequent policy recalibration raises compliance burdens, contract uncertainty, and the need for stronger scenario planning and local stakeholder management.

US Trade Pact Recalibration

India-US trade negotiations are nearing a first tranche, but US tariff changes and Section 301 probes have forced redrafting. The outcome will shape tariff competitiveness, agricultural access, export growth and supply-chain decisions for firms using India as a US-facing production base.

Tourism Weakness Hits Demand

Tourism, worth roughly 12% of GDP, faces softer arrivals, flight-capacity constraints, and higher travel costs. Authorities now see 2026 arrivals at 30-34 million, with losses potentially reaching 150 billion baht, weakening consumption, hospitality cash flow, and service-sector employment.

Inflation Pressures Delay Easing

March inflation accelerated to 4.14% year on year, while 2026 expectations rose to 4.71%, above the target ceiling. Fuel and food costs are pressuring households and raising uncertainty over interest-rate cuts, credit conditions and consumer-demand assumptions.

Symbolic OPEC+ output policy

OPEC+ approved a symbolic May quota rise of 206,000 barrels per day, but actual export gains remain limited by maritime disruption. For international firms, this means continued oil price volatility, uncertain feedstock costs, and unstable planning assumptions for energy-intensive operations.

Non-Oil Export Base Deepens

Non-oil exports reached a record SR624 billion in 2025, up 15%, lifting their share of total exports to 44%. Growth in services, re-exports, machinery, fertilizers, and food signals broader trade diversification and stronger opportunities for manufacturing and logistics firms.

Export Market Access Pressure

Thailand faces US tariff investigation risks and potential trade diversion in Europe as the EU-India FTA advances. With exports to the EU worth US$26.4 billion and bilateral EU trade at US$45.03 billion, pressure is rising to accelerate Thailand’s own trade agreements.

Energy Security Drives Regional Diplomacy

Australia is using regional diplomacy to secure fuel, fertiliser and energy flows, including arrangements with Singapore, Brunei, Indonesia and China. This reduces near-term disruption risk, but also signals a more interventionist trade posture shaped by geopolitical instability and strategic supply concerns.

War-Risk Insurance Market Deepens

New insurance mechanisms are slowly reducing barriers to operating in Ukraine. A PZU-KUKE scheme now covers war, terrorism, sabotage, and confiscation risks, potentially reviving cross-border transport capacity after Polish carriers’ market share on Poland-Ukraine routes fell from 38% in 2021 to 8% in 2023.

AI Data Rules Turn Pro-Growth

Japan is easing personal-data rules to support AI development while increasing penalties for misuse. The APPI amendment expands consent exemptions for statistical and AI processing, which should improve innovation conditions, but raises compliance demands around transparency, biometrics and minors’ data.

China Dependence Limits Bargaining Power

Russia’s trade redirection has increased reliance on China for energy purchases, payments channels and intermediary trade flows. This concentration reduces Moscow’s bargaining power, compresses export margins through discounts, and raises strategic exposure for firms tied to Russia-linked regional supply networks.

Semiconductor Ecosystem Expansion

Vietnam is moving up the electronics value chain as Samsung advances discussions on chip testing and packaging and local authorities expand workforce programs. This strengthens diversification beyond China, but execution still depends on power supply, skilled labor, incentives, and policy predictability.

Trade Diversification Becomes Imperative

Canada is accelerating efforts to reduce overdependence on the U.S. market, which still absorbed roughly 72% of goods exports in 2025. This is pushing firms to diversify toward Europe and Asia-Pacific, reshaping logistics, partner selection, investment priorities, and market-entry strategies.

Labor localization compliance tightening

Saudi Arabia expanded 100% Saudization to 69 administrative roles and is raising Qiwa contract-documentation compliance to 85% in April and 90% by June. International firms face rising workforce localization, HR compliance, recruitment, training, and operating-cost pressures across private-sector activities.