Trade Policy and Free Trade Agreements

Japan's active engagement in regional trade agreements like the CPTPP and RCEP shapes its trade environment, offering expanded market access but also increasing competition. Businesses must navigate these frameworks to optimize supply chains and investment decisions in the Asia-Pacific region.

Labour-Intensive Sector Tax Incentives

The government will cover personal income taxes for workers in labour-intensive industries until 2026, supporting household income and economic stability. This stimulus benefits sectors like textiles, footwear, and tourism, enhancing resilience and competitiveness for international investors.

Regulatory and Legal Risks

The evolving regulatory landscape in Russia, including tightened controls on foreign businesses and increased scrutiny, poses compliance challenges. Legal uncertainties can deter foreign direct investment and complicate contract enforcement.

Infrastructure Investment and Modernization

Federal infrastructure spending initiatives aim to upgrade transportation, digital networks, and logistics capabilities. Improved infrastructure enhances supply chain efficiency and attracts foreign direct investment.

Political Fragmentation and Stability Risks

Germany’s political landscape is increasingly polarized, with rising influence of the far-right AfD and collapsing regional coalitions. Policy uncertainty and social tensions threaten stability, complicating long-term investment strategies and risk assessments for international businesses.

Major Infrastructure Investments Underway

Significant public funding is being directed toward infrastructure, notably the £3 billion Lower Thames Crossing and expanded broadband rollout. These projects aim to boost productivity, alleviate supply chain bottlenecks, and attract investment, but execution risks remain.

Climate Change Policies and Regulations

Stringent climate policies aimed at reducing carbon emissions influence operational costs and compliance requirements for businesses. These regulations drive innovation in green technologies but may increase costs in traditional sectors, affecting investment decisions and international trade dynamics.

Trade Diversification and Market Access

Brazil opened over 200 new markets for agribusiness in 2025, reducing dependence on traditional partners. Expansion into Southeast Asia, India, and Canada is underway, but success depends on regulatory adaptation and competitive positioning.

Sustainability and ESG Integration

Growing emphasis on environmental, social, and governance criteria drives corporate strategy changes, affecting supply chain sourcing, product development, and investor relations. ESG compliance is becoming a prerequisite for international partnerships.

Volatile Raw Materials Impact Logistics

Rapid shifts in metal prices and unpredictable demand have made logistics a critical business function for Swedish mining and manufacturing. Companies are adapting supply chain strategies to manage risk and maintain operational resilience in a volatile market.

Political Instability and Coalition Uncertainty

2026 local elections test South Africa’s fragile coalition government, with the ANC’s support declining and opposition parties gaining ground. Political fragmentation risks policy inconsistency, complicating long-term investment decisions and raising concerns over governance and service delivery.

Massive International Reconstruction Funding

A €682 billion support package over ten years is agreed for Ukraine’s recovery, including grants and loans. This funding will transform infrastructure, energy, and industry, presenting major opportunities and risks for global investors and supply chain operators.

USMCA Uncertainty and Trade Tensions

The upcoming review of the USMCA agreement injects significant uncertainty into North American trade. Potential renegotiations or expiration could disrupt tariff-free access, supply chains, and investment planning, with heightened risks from ongoing US protectionist rhetoric and tariff threats.

Labor Market and Demographic Challenges

An aging population and labor shortages impact productivity and wage dynamics in South Korea. Businesses must adapt through automation, upskilling, and flexible labor policies to sustain competitiveness in manufacturing and services.

Trade Diversification Efforts

Iran is actively seeking to diversify its trade partners beyond traditional Western markets, focusing on Asia and regional neighbors. This strategy affects global trade patterns and offers alternative opportunities and risks for international businesses.

Technological Innovation and Digitalization

Adoption of advanced technologies like AI, automation, and blockchain is transforming Australian industries. This digitalization enhances productivity and supply chain transparency but requires investment in skills and cybersecurity measures.

China's Economic Recovery Post-COVID

China's gradual economic reopening post-pandemic is boosting domestic consumption and manufacturing output. However, uneven recovery rates and localized lockdowns pose challenges for international firms relying on stable demand and supply conditions.

Sanctions Expand Geopolitical Risks

The US has broadened sanctions against entities in China, Iran, and Venezuela, targeting defense, technology, and energy sectors. These measures heighten compliance risks, restrict market access, and increase uncertainty for multinational firms operating in or trading with sanctioned jurisdictions.

Reshoring and Supply Chain Realignment

Driven by national security and tariff policy, the US is incentivizing reshoring and ‘friend-shoring’ of manufacturing. This has triggered global supply chain restructuring, with Southeast Asia and Mexico gaining, but also increased operational complexity and costs for multinational firms.

Energy Sector Reforms

Mexico's energy policies, including reforms favoring state-owned enterprises like Pemex and CFE, affect foreign investment and energy supply stability. Regulatory changes impact renewable energy projects and international partnerships, influencing operational costs and sustainability strategies for businesses.

Financial Services Sector Transformation

The UK’s financial services sector is adapting to loss of EU passporting rights by expanding global partnerships and innovating fintech solutions. This transformation impacts London's role as a global financial hub and influences capital flows and investment strategies.

USMCA Trade Dynamics

The United States-Mexico-Canada Agreement (USMCA) continues to shape Mexico's trade landscape, influencing tariffs, labor standards, and cross-border supply chains. Its enforcement affects manufacturing sectors, particularly automotive and agriculture, impacting foreign investment decisions and regional trade flows.

Environmental and Sustainability Regulations

Increasing environmental standards and sustainability initiatives in Taiwan impact manufacturing practices and compliance costs. Businesses must adapt to these regulations, influencing operational strategies and international trade compliance.

Currency Fluctuations and Monetary Policy

The Thai baht's volatility and monetary policy decisions influence trade competitiveness and investment returns. Currency risks must be managed strategically by businesses engaged in import-export and foreign investment activities.

Political Instability And Coalition Risks

South Africa faces heightened political uncertainty as local elections approach, with coalition governments struggling for stability. Persistent factionalism and service delivery failures threaten policy continuity, impacting investor confidence and business operations across key urban centers.

Political Stability and Governance

Thailand's political environment remains a critical factor for investors, with ongoing concerns about governance and policy consistency. Political stability influences regulatory frameworks, foreign investment confidence, and operational continuity for multinational corporations, impacting long-term strategic planning and risk assessments.

Rapid Export Growth And Surplus

Vietnam achieved an 18% year-on-year trade growth in 2025, with exports reaching $475 billion and a trade surplus over $20 billion. This robust export performance, led by processed goods, strengthens macroeconomic stability and investor confidence, supporting supply chain resilience.

Infrastructure and Supply Chain Modernization

Record export volumes highlight Brazil’s need for continued investment in logistics, ports, and supply chain resilience. Upgrades are crucial to sustain growth, reduce bottlenecks, and meet rising international standards, especially as trade volumes approach US$700 billion in 2026.

Ongoing Conflict and Security Risks

The persistent conflict in Eastern Ukraine and tensions with Russia continue to pose significant security risks. This instability disrupts supply chains, deters foreign investment, and increases operational costs for businesses, impacting international trade and investor confidence in the region.

Infrastructure Development and Logistics

Massive investments in infrastructure, including ports, airports, and transport networks, enhance Saudi Arabia's logistics capabilities. Improved connectivity facilitates smoother supply chains and trade flows, benefiting multinational corporations and regional commerce.

Geopolitical Tensions and Security Risks

North Korea’s military provocations, nuclear submarine development, and evolving US-South Korea alliance dynamics heighten regional security risks. Businesses must assess exposure to geopolitical disruptions, supply chain vulnerabilities, and shifting defense priorities in Northeast Asia.

Security and Crime Risks

Persistent security challenges, including organized crime and drug-related violence, increase operational risks for businesses. These issues affect logistics, supply chain security, and investor confidence, particularly in northern border regions critical for trade.

Energy Transition and Policy Uncertainty

Despite federal efforts to revive fossil fuels, market forces and state policies have driven record renewable energy growth. However, abrupt regulatory changes, project cancellations, and legal disputes have created a volatile investment climate, especially in wind, solar, and EV supply chains.

High Unemployment And Tariff Pressures

Unemployment remains above 31%, with major retrenchments in manufacturing and automotive sectors. US tariffs on exports, especially vehicles, are expected to worsen job losses and erode industrial competitiveness, posing significant risks for supply chains and foreign direct investment.

Energy Supply Instability

South Africa faces ongoing energy supply challenges due to frequent power outages and load shedding by Eskom. This instability disrupts manufacturing and mining operations, increasing operational costs and deterring foreign investment. Businesses must factor in energy risks when planning supply chains and capital expenditures.

Infrastructure and Logistics Enhancements

Investments in port facilities, transportation networks, and digital infrastructure improve Israel's logistics capabilities. Enhanced infrastructure supports efficient supply chains, reducing costs and transit times for international trade.