India-UK Free Trade Agreement Impact

The recently signed UK-India trade deal grants Indian exporters duty-free access for 99% of products and is projected to boost UK-India trade by £25.5 billion annually. This agreement diversifies UK supply chains and reduces reliance on US and EU markets.

Accelerated EU Accession and Market Integration

Ukraine aims for EU membership by 2027, viewing integration as a key security and economic guarantee. Many EU states support this timeline, but accession depends on reforms and consensus. Rapid integration could reshape trade, regulatory, and investment landscapes for international businesses.

Critical Minerals Supply Chain Resilience

Japan is aggressively diversifying its critical minerals and rare earths supply, launching deep-sea mining projects and forging new partnerships with the EU, Italy, and India. These efforts aim to reduce dependency on China, which controls about 60-70% of global rare earth supply, safeguarding manufacturing and technology sectors.

US Trade Deficit and Competitiveness Concerns

The US trade deficit widened to $973.5 billion in 2024, reflecting structural challenges such as a strong dollar, underinvestment in manufacturing, and declining export competitiveness. Persistent deficits threaten economic growth and complicate efforts to reshore production.

Sanctions Enforcement and Maritime Security

France has intensified enforcement of sanctions against Russia’s shadow oil fleet, including high-profile naval seizures. This escalates geopolitical risks in maritime trade, raises insurance costs, and could provoke Russian retaliation, affecting global shipping and energy supply chains.

Critical Minerals and Resource Security

The US government’s $2.5 billion push for domestic critical mineral production is reshaping investment in mining and advanced manufacturing. New contracts and legislation aim to reduce import dependency, enhance national security, and support resilient supply chains.

Persistent Supply Chain Disruptions

US supply chains continue to experience disruptions from geopolitical tensions, natural disasters, and infrastructure bottlenecks. Companies must invest in resilience, diversify suppliers, and adopt new technologies to mitigate risks and maintain operational continuity.

Manufacturing Competitiveness and PLI Schemes

Production-Linked Incentive (PLI) schemes have attracted $22.2 billion in investments across 14 sectors, generating $207.9 billion in new production and 1.26 million jobs. These policies are boosting electronics, pharmaceuticals, and specialty chemicals, enhancing India’s role in global value chains.

Foreign Direct Investment and National Security Scrutiny

Canada is welcoming FDI in strategic sectors but maintains restrictions on foreign ownership in sensitive industries. Enhanced transparency and regulatory oversight reflect a balancing act between attracting capital and safeguarding national interests, especially in technology and critical minerals.

Currency Volatility and Capital Outflow Risks

The Korean won’s depreciation to levels not seen since the 2008 crisis, combined with a $350 billion US investment commitment, heightens capital outflow risks. These currency pressures complicate cross-border investments, impact foreign exchange costs, and add uncertainty to multinational business planning.

Investment Uncertainty and Supply Chain Realignment

Rising trade tensions and unpredictable US policy have slowed German investment flows into the US and prompted companies to reconsider supply chain locations. Prolonged uncertainty could accelerate regionalization, delay capital projects, and weaken Germany’s manufacturing base, with long-term implications for competitiveness and global market access.

Shrinking but Persistent EU-Iran Trade

Despite sanctions, EU-Iran trade persists at low levels—€4.6bn in 2024, mainly machinery, chemicals, and food. However, ongoing sanctions and the IRGC’s terrorist designation by the EU further constrain business, with compliance burdens and reputational risks for European firms.

US–Taiwan tariff deal reshapes trade

A pending reciprocal tariff arrangement would reduce US tariffs on many Taiwanese goods (reported 20% to 15%) and grant semiconductors MFN treatment under Section 232. In exchange, large Taiwan investment pledges could shift sourcing and pricing dynamics for exporters.

Visa Incentives And Talent Mobility

New government decrees grant time-limited visa exemptions for foreign experts, streamlining entry and enhancing Vietnam’s attractiveness for international talent. This policy supports research, innovation, and high-value investment, facilitating knowledge transfer and business expansion.

‘Made in Europe’ Strategy Debated

France champions the EU’s ‘Made in Europe’ industrial strategy to counter Chinese imports and strengthen supply chains. Internal EU divisions over protectionism versus openness create uncertainty for multinational firms, affecting procurement, investment, and market access decisions.

CUSMA’s Uncertain Future and Renegotiation

The Canada-US-Mexico Agreement faces an uncertain future, with President Trump calling it ‘irrelevant’ and considering separate bilateral deals. The upcoming review could disrupt established trade flows, regulatory certainty, and investment strategies for firms operating in North America.

Immigration Policy and Labor Market Volatility

Australia's high immigration rate—31.5% foreign-born—fuels economic growth but also political debate amid cost-of-living and housing crises. Rising populist rhetoric and calls for policy reform create uncertainty for workforce planning, talent mobility, and social stability, affecting business operations and investment climate.

Energy Transition Drives Policy Shifts

Germany’s energy transition, including the nuclear phase-out and coal exit by 2038, has led to high energy costs and reliance on state intervention. EU approval for subsidized gas plants and industrial power price relief aims to support energy-intensive industries, but the transition remains costly and controversial, impacting competitiveness.

Post-Brexit Trade Policy Evolution

The UK's trade policy continues to evolve post-Brexit, with new trade agreements and ongoing negotiations with the EU and other partners. Shifting tariffs, regulatory divergence, and customs changes are impacting international trade flows and business planning.

Strategic Contest Over Port of Darwin

Australia’s push to reclaim the Chinese-leased Port of Darwin has provoked threats of economic retaliation from Beijing. The dispute highlights the intersection of national security and trade, with potential sanctions and investment restrictions affecting broader Australia-China commercial relations.

Investment Climate and SME Funding Gap

Renewed investor confidence is evident, with FDI pipelines growing, especially in renewables and tech. However, a R350 billion SME funding gap persists, as stricter governance and financial controls limit access to capital for smaller, informal businesses.

Semiconductor Industry Resilience and Expansion

Japan is rapidly expanding its semiconductor sector, attracting major investments such as TSMC’s Kumamoto plant and boosting domestic equipment and materials suppliers. This is part of a broader strategy to strengthen supply chain resilience, reduce China dependence, and capitalize on global AI and automotive demand.

Macroeconomic Stabilization and Growth Momentum

Pakistan has shifted from crisis management to strategic repositioning, achieving GDP growth above 3.7%, a fiscal surplus, and declining inflation. These improvements have boosted investor confidence, but sustained policy continuity and private sector participation are critical for long-term business stability and growth.

Escalating Geopolitical and Security Risks

Ongoing conflict in Ukraine, US-Russia tensions, and new US actions against Russian assets have heightened geopolitical risks. These developments threaten supply chain stability, raise compliance costs, and increase the risk of asset seizures or operational disruptions for international businesses in Russia and its partner states.

Labor Market Weakness Amid Economic Growth

While US GDP growth remains strong, job creation has slowed, with unemployment rising to 4.4%. AI-driven productivity gains and reduced immigration contribute to a decoupling of growth from employment, raising social and political risks for businesses dependent on domestic demand.

Upgraded EU-Vietnam Strategic Partnership

Vietnam and the EU have elevated ties to a comprehensive strategic partnership, deepening cooperation in trade, critical minerals, semiconductors, and technology. This move supports supply chain security, market access, and investment, especially as US tariffs reshape global trade dynamics.

Disrupted Export Logistics and Supply Chains

Russian attacks on ports and logistics hubs have cut Ukraine’s export earnings by $1 billion in Q1 2026, forcing rerouting via rail and reducing agricultural and industrial exports by up to 47%. Ongoing risks threaten the stability of global supply chains reliant on Ukrainian goods.

Fragmented Export Strategy Hinders Growth

France’s export support system remains fragmented, with exports lagging behind Germany and Italy. Calls for a unified ‘France brand’ and streamlined export promotion highlight the need for reform to boost competitiveness and international market share.

Infrastructure Expansion and Logistics Modernization

India’s 2026-27 budget prioritizes accelerated investment in highways, ports, and digital infrastructure. Initiatives like Gati Shakti have reduced logistics costs below 10% of GDP, improving supply chain efficiency and global competitiveness, and supporting the goal of becoming a $5 trillion economy.

Currency Collapse Fuels Economic Instability

The Iranian rial’s collapse—losing over 50% of its value in 2025—has triggered hyperinflation, supply chain breakdowns, and widespread business closures. Volatile exchange rates and dollar scarcity undermine contract reliability, price stability, and the viability of trade and investment.

Foreign Capital Inflows Remain Resilient

Despite global volatility, Indonesia attracted Rp1.44 trillion (US$93 million) in foreign capital inflows in early 2026, mainly into equities and securities. Steady inflows reflect investor confidence in Indonesia’s macroeconomic fundamentals and growth prospects.

SME Funding Gap and Investment Selectivity

Despite renewed investor confidence, South Africa’s SME sector faces a R350 billion funding gap due to strict financial controls and governance requirements. Only well-structured businesses attract capital, limiting broad-based economic growth and job creation.

Sovereign Wealth Fund and State Enterprise Reform

The Danantara sovereign wealth fund, managing $1 trillion in assets, is positioned to finance future industries and co-invest with global partners. Plans to rationalize state-owned enterprises from 1,044 to 300 aim to enhance efficiency and governance, signaling a more modern and open investment environment.

Fiscal Policy and Debt Volatility

Japan's snap election and expansionary fiscal policies have triggered sharp volatility in government bonds and the yen, raising global market risks. Debt servicing costs could rise to 20-25% of expenditure, impacting fiscal sustainability and investor confidence.

EU Accession Negotiations Accelerate Reforms

Ukraine’s EU accession talks are driving economic and regulatory reforms, aiming to align with European standards. While this process opens long-term market access, it also imposes transitional compliance burdens and sectoral adjustments for international investors and exporters.

Renewable Energy and Digital Economy Push

Egypt is leveraging its geographic advantages to become a regional leader in renewable energy and digital infrastructure. Major investments in solar, green hydrogen, and digital trade platforms are attracting international partnerships and supporting the country’s green transition and export competitiveness.