Public investment supports growth

Vietnam reported 8.18% GDP growth in H1 2026 and a five-year high of $13.03 billion in realized FDI, while prioritizing transport, energy, logistics, and digital infrastructure. Faster public investment disbursement should improve operating conditions, although execution discipline remains critical.

Balochistan insecurity hits CPEC

Escalating militant attacks in Balochistan are directly threatening Chinese projects, logistics corridors and mining assets. More than 100 attacks in the first half of 2026 and repeated assaults on Chinese personnel raise insurance, security and execution risks for infrastructure investors.

US tariff and transshipment risk

US customs inspections of Chinese-linked factories in Vietnam and stalled bilateral talks over transshipment, IP, and non-tariff barriers have raised the risk of additional Section 301 tariffs, threatening exporters, compliance costs, and sourcing strategies for Vietnam-based manufacturing.

Government Safeguards Critical Inputs

New Delhi is actively managing risks to petroleum, gas, fertiliser, and seafarer safety through repeated cabinet-level reviews. With India importing over 88% of energy needs and relying heavily on fertiliser imports, business continuity planning remains a national operational priority.

Alternative pipeline diplomacy

Saudi Arabia is evaluating complex bypass options using the Suez Canal, Egypt’s Sumed pipeline, and potentially other regional infrastructure. These workarounds could preserve exports but add transshipment complexity, capacity constraints, and politically sensitive cross-border dependencies for traders and investors.

AfCFTA agenda supports trade expansion

Ramaphosa’s push to operationalise AfCFTA highlights priorities directly affecting cross-border business: removing non-tariff barriers, modernising customs, harmonising regulations and improving payment systems. Progress on these fronts would lower trade friction and expand South Africa’s access to continental markets.

US-China trade retaliation escalates

Fresh tit-for-tat measures are widening operational risk: Washington blacklisted more than 40 Chinese firms and restricted robots, inverters and shipping operators, while Beijing sanctioned seven US entities and tightened drone exports, complicating market access, compliance and cross-border planning.

Softening labor market complicates outlook

July payrolls fell by 23,000, while May and June were revised down by a combined 103,000, signaling weaker demand conditions. Although unemployment dipped to 4.1%, slowing hiring may temper consumption, alter expansion assumptions and affect sector-specific operating forecasts.

India-UK trade deal implementation

The India-UK CETA has entered into force, with nearly 99% duty-free access for Indian exports and expectations of stronger bilateral investment. For UK firms, the agreement creates openings in procurement, trade and services, while requiring close attention to regulatory alignment, competition and sector-specific market access.

Growth slowdown and cost pressures

UK GDP growth slowed to 0.4% in the second quarter from 0.6% previously, while business groups warn that persistent cost pressures are choking expansion. Elevated energy prices, weak productivity and calls for trade-boosting measures create a more cautious environment for hiring, capital expenditure and market entry.

North Sea energy policy reversal

The government may approve Rosebank and Jackdaw field development despite prior opposition to new licences, signalling a pragmatic but politically sensitive shift in energy policy with implications for offshore investment, energy security, transition planning, and regulatory predictability.

Climate exposure along trade corridors

Climate risks are increasingly material for transport and industrial assets linked to CPEC, including glacial hazards, drought and flood exposure. Research cooperation is expanding, yet risk screening remains uneven, raising long-term concerns for infrastructure resilience, insurance costs and supply continuity.

Fiscal strain and policy uncertainty

Recent reporting highlights acute pressure on UK public finances, with debt near £3 trillion, June interest payments at £11.8 billion, and debate over extra borrowing, tax rises or spending cuts complicating investment planning, sterling sentiment, and domestic demand forecasts.

Migration reforms reshape labour access

Government migration reforms, including a Business Licensing Bill reserving some activities for citizens, could materially alter hiring models in hospitality, agriculture and tourism. At the same time, expanded visa fast-tracking and possible seasonal-worker schemes may selectively ease skills shortages.

US Tariffs Hit Exports

Washington imposed new 10% Section 301 tariffs on Indonesian goods, while a parallel excess-capacity probe remains pending. Exporters in textiles, footwear, furniture and other labor-intensive sectors face margin pressure, weaker orders, and stronger incentives to diversify markets and strengthen labor-compliance systems.

Russia sanctions bill spillovers

A Senate sanctions bill would expand U.S. powers over Russia and Iran while enabling tariffs of up to 100% on major buyers of Russian energy and up to 500% on Russian goods, raising risks of secondary trade disruptions for allies and global commodity flows.

US tariffs on UK exports

The US has renewed a 10% tariff on British goods, preserving existing UK exposure despite exemptions under the bilateral Economic Prosperity Deal. With £66 billion of UK exports sent to the US in 2024, exporters must manage margin pressure, compliance demands, and possible product-specific disruptions.

Shipping and insurance risk surges

Major operators including Maersk and Hapag-Lloyd suspended calls to Chornomorsk, while war-risk premiums and security concerns escalated sharply. Higher freight, insurance and compliance costs are making routine trade uneconomic and complicating procurement, inventory planning and customer delivery schedules.

Energy security tied to Middle East

Middle East conflict and shipping disruption remain central business risks because Japan depends heavily on imported fuel, with reports citing 80-93% of crude linked to Hormuz exposure. Oil near $100 raises logistics, manufacturing, utilities, and import bills across Japan-based supply chains.

Business confidence faces erosion

Canadian and market commentary warned that weakening CUSMA protections could seriously damage business confidence just as Canada’s economy shows recovery signs. For international firms, policy volatility may delay capital deployment, contract commitments, and long-term location planning.

Negotiation uncertainty over transit

Disputes over future management of the Strait of Hormuz, including permits, insurance approval, and possible tolling arrangements, remain unresolved despite mediation. This legal and regulatory uncertainty complicates voyage planning, contract pricing, and long-term investment decisions for shipping and energy market participants.

Water infrastructure cooperation grows

Turkey and Iraq are moving to implement a water cooperation framework from September 2026, including shared infrastructure projects and possible Turkish corporate participation. This creates openings in engineering and utilities, while highlighting climate-related resource stress affecting agriculture and industry.

Tariffs after court setbacks

After Supreme Court and trade-court defeats on earlier tariff authorities, Washington shifted to Section 301 to sustain broad import duties. For multinationals, the policy direction points to continued trade intervention, but with elevated legal volatility and possible future reversals or refunds.

Red Sea chokepoint disruption

Houthi attacks and blockade threats around Bab el-Mandeb are disrupting Saudi-linked shipping, with tankers reversing course and insurers repricing risk. As roughly 15% of global seaborne trade transits the Red Sea, exporters face delays, higher freight costs, and operational uncertainty.

Tariffs Reshape China Sourcing Decisions

Some U.S. firms are shifting portions of manufacturing back to China because tariff gaps with Southeast Asia have narrowed while China retains lower costs and dense supplier networks. This reverses earlier diversification plans and underscores continued concentration risk in critical supply chains.

Eskom restructuring tests energy reform

Ramaphosa’s backing for Eskom unbundling and an independent transmission operator is a major electricity-market reform with long-term upside for reliability and competition. However, NUM’s threat of legal action and labour resistance could delay implementation, affecting energy-intensive investment planning.

Export proceeds controls tighten liquidity

The new DHE SDA regime requires natural-resource exporters to repatriate 100% of proceeds into Indonesia’s financial system, with holding periods of three to 12 months. This supports reserves and rupiah stability, but may tighten treasury flexibility and working-capital management.

Exporter support reshapes financing

Brasília responded with an R$18.5 billion emergency credit package under Brasil Soberano III, combining R$13.5 billion from the Treasury and R$5 billion from BNDES, cushioning cash flow, working capital and market diversification for exposed manufacturers and strategic sectors.

Imported Inflation Hits Consumer Demand

Imported inflation from yen weakness and energy prices is eroding household purchasing power, while household spending has already fallen for six consecutive months. Businesses face a tougher operating environment in which demand softness coexists with rising input and wage costs.

Security cooperation shapes operations

Ankara and Baghdad are deepening counterterrorism coordination against the PKK, backed by prior security agreements and a joint coordination center. For companies, stronger cooperation may support transport security in northern corridors, though regional military activity still raises operational and insurance risk.

Iran Conflict Disrupts Shipping

U.S. strikes on Iran continued for nearly two weeks as Washington sought to restore shipping through the Strait of Hormuz. Reported increases in crude, jet fuel, and fertilizer costs raise freight, input, and insurance expenses for globally exposed U.S. businesses.

Black Sea Shipping Disruption

Russia’s intensified strikes on civilian cargo ships and Odesa-region ports halted vessel entries for the first time since 2023, prompting Maersk to suspend Chornomorsk operations and redirect cargo to Constanța, sharply increasing freight risk, insurance costs, and export uncertainty for shippers.

Black Sea truce diplomacy matters

Kyiv has reportedly proposed a moratorium on attacks against civilian targets in the Black Sea, with Türkiye also advocating restraint. Any progress could materially improve shipping confidence, while failure would prolong blockade conditions, food-price volatility, and operating uncertainty for regional trade networks.

China Demand Weakens Oil Flows

China remains the principal destination for Iranian crude, yet weak refinery economics are reducing demand. Shandong independent refiners were running at just above 48% capacity versus a five-year seasonal average near 60%, contributing to 135 million barrels in floating storage.

Rhine drought disrupts inland freight

Exceptionally low Rhine water levels are sharply reducing barge loads and driving freight costs near €150 per tonne versus a typical €20. Chemical, steel and fuel supply chains face disruption, while rail alternatives are constrained by parallel line refurbishments and limited capacity.

Automotive market share pressure

Chinese brands captured 47.2% of new EU plug-in hybrid registrations in the second quarter, while German carmakers face falling competitiveness. The resulting pressure is accelerating calls for protection, restructuring, and supplier adaptation across Europe’s most important manufacturing ecosystem.