Mexico’s Strategic Role in Regional Geopolitics

Mexico’s humanitarian oil shipments to Cuba and its diplomatic stance on US interventions highlight its growing influence in Latin American geopolitics. US pressure to end fuel exports and regional instability could impact Mexico’s foreign policy, trade, and energy relations.

Geopolitical Influence and Security Alliances

Australia’s balancing act between the US and China shapes its trade, investment, and security policies. Participation in initiatives like AUKUS and Indo-Pacific partnerships, as well as G7 critical minerals talks, underscores the growing importance of geopolitical alignment for international business operations.

Supply Chain Diversification Gains

Southeast Asia, including Thailand, is capturing sourcing share as global supply chains shift away from China due to tariffs and trade tensions. Thailand’s imports to the U.S. rose 28% in 2025, positioning the country as a key alternative for international supply chain strategies.

Strategic Pivot to Asian and Global Markets

Canada is actively seeking to double non-U.S. exports by 2035, leveraging new agreements with China and expanding ties with Asia-Pacific and plurilateral blocs. This pivot aims to reduce vulnerability to U.S. trade policy shocks and foster new investment and technology partnerships, but increases exposure to geopolitical risks.

Societal Strains: Water, Energy, and Labor

Chronic water shortages, energy mismanagement, and rising unemployment compound Iran’s economic crisis. These systemic issues undermine productivity, increase social risk, and pose long-term challenges for sustainable business operations.

TSMC’s Global Expansion and AI Boom

TSMC, the world’s largest chipmaker, is expanding with new US plants and record capital expenditure, driven by surging AI chip demand. This cements Taiwan’s centrality in advanced technology supply chains but also increases exposure to geopolitical and operational risks.

Declining Foreign Direct Investment Inflows

Foreign direct investment and portfolio flows into China have slowed sharply, with investors shifting to other emerging markets due to geopolitical risks, post-COVID changes, and concerns over economic transparency. This trend raises questions about China’s long-term attractiveness for international capital.

Global Supply Chain Vulnerabilities

China’s tightening of export controls on critical minerals and dual-use goods, especially to Japan, highlights the fragility of global supply chains. These actions, which impact sectors from semiconductors to EVs, force multinationals to reassess sourcing and resilience strategies amid rising geopolitical risk.

EU-Mercosur Trade Deal Turmoil

France’s staunch opposition to the EU-Mercosur free trade agreement, driven by agricultural and environmental concerns, has isolated it within the EU. The deal’s likely ratification despite French protests signals rising trade policy uncertainty and supply chain risks for agri-food and related sectors.

Foreign Exchange and Debt Crisis

Egypt’s external debt reached $161.2 billion in mid-2025, straining reserves and prompting asset sales and IMF negotiations. Currency volatility and high interest rates challenge business planning, while debt restructuring and fiscal reforms remain critical for stability.

Financial Sector and FDI Liberalization

India’s financial sector reforms, including 100% FDI in insurance, improved regulatory oversight, and new securities market codes, deepen capital markets and attract global investors. These changes enhance competition, lower costs, and strengthen India’s role as a preferred destination for foreign capital.

Startup Ecosystem and Venture Investment Surge

South Korea’s government-led support for startups, highlighted at CES 2026, is fostering innovation in AI, deep-tech, and mobility. Seoul’s global ranking and record FDI inflows signal robust opportunities for venture capital, partnerships, and technology-driven business models.

Foreign Direct Investment Fluctuations

UK outbound investment, particularly in Europe, has sharply declined—UK investment in Spain fell 83% in 2025. While the UK promotes itself as an attractive investment destination, these fluctuations signal caution for international investors assessing long-term commitments.

Currency Collapse And Hyperinflation

Iran’s rial has lost over half its value in six months, trading at 1.4 million per US dollar, driving inflation above 42%. This has severely eroded purchasing power, destabilized markets, and triggered nationwide protests, directly impacting trade and investment decisions.

Foreign Investment Policy Tightens

Saudi Arabia is refining its foreign investment regulations, balancing openness with strategic national interests. Enhanced compliance, local content requirements, and sectoral restrictions may affect market entry, ownership structures, and profit repatriation for international investors.

Ruble Volatility and Financial Strain

The Russian ruble faces renewed pressure due to falling export revenues and reduced central bank interventions. Currency instability heightens risks for foreign investors and complicates cross-border transactions and financial planning.

Unprecedented US Climate Policy Retreat

The US withdrawal from the UNFCCC and 65 other global treaties marks a historic retreat from climate leadership. This move isolates the US from global climate frameworks, risks trade retaliation, and may disadvantage US businesses as other economies accelerate clean energy investment and regulatory standards.

Sectoral Overdependence on Semiconductors

Despite headline export growth, non-semiconductor exports declined 1% in 2025. Korea’s heavy reliance on chips masks underlying vulnerabilities in other sectors, underscoring the need for diversification and innovation in manufacturing and services.

Regulatory Reforms and Private Sector Incentives

The government is implementing new tax incentives, customs reforms, and digitalization to attract investment and support local industry. IMF reviews and international partnerships are driving structural changes, but bureaucratic hurdles and military influence still challenge private sector growth.

Labour Market Tensions and Wage Pressures

Persistent high unemployment, wage negotiations, and potential for labour unrest present ongoing risks. While recent data shows slight improvements in employment, structural barriers and the threat of strikes in key sectors like mining and manufacturing remain a concern for supply chain continuity.

Severe Economic Collapse and Hyperinflation

Iran’s economy is in free fall, with the rial trading above 1.4 million to the US dollar and inflation exceeding 40%. This collapse undermines purchasing power, disrupts supply chains, and raises the risk of non-payment or contract frustration for foreign firms.

Japan’s Strategic Rare Earth Mining Push

Japan has launched the world’s first deep-sea rare earth mining trial near Minamitori Island, aiming to reduce dependence on China. Success could transform Japan into a key supplier, but technical, environmental, and cost hurdles remain, with full-scale operations targeted for 2027.

Mining and Industrial Diversification Push

Strategic partnerships and investments are transforming Saudi Arabia into a regional mining and industrial hub. New aluminum complexes and mining service giants are being established, supporting Vision 2030’s goal to reduce oil dependency and localize high-value supply chains, with substantial workforce development initiatives.

Strained Canada–U.S. Trade Relations

Canada’s relationship with the U.S. is under pressure due to repeated U.S. tariff threats, especially in autos, steel, and aluminum. The new Canada–China deal risks U.S. retaliation, particularly as CUSMA renegotiations loom, raising uncertainty for cross-border supply chains and North American manufacturing integration.

Youth-Led Political Mobilisation

Generation Z activism and opposition rallies are reshaping the political landscape, challenging established power structures and demanding reforms. This trend increases volatility and may influence policy direction, regulatory enforcement, and the overall business environment.

Deepening Turkey–UK and EU Trade Relations

Turkey’s trade with the UK hit $24 billion, with ambitions for $40 billion. EU trade reached $233 billion. Ongoing negotiations to expand free trade agreements into services and investment are set to further integrate Turkey into European supply chains.

Shifting Alliances and Defense Pacts

Turkey’s potential entry into a Saudi Arabia-Pakistan mutual defense pact and its balancing act between NATO, Russia, and regional actors reflect a fluid security environment. These shifts may affect foreign investment, technology partnerships, and supply chain security, especially in sensitive sectors.

US-Taiwan Semiconductor Trade Pact

The landmark 2026 US-Taiwan trade agreement reduces US tariffs on Taiwanese goods to 15% in exchange for at least $250 billion in Taiwanese semiconductor investment in the US, reshaping global supply chains and boosting US-Taiwan economic integration.

Greenland’s Push for Self-Determination

Greenland’s government and population strongly favor autonomy and reject external interference, including US financial incentives. Unresolved status and independence aspirations complicate regulatory certainty, resource licensing, and long-term investment planning for international businesses.

Geopolitical Tensions Drive Market Volatility

Escalating US-China rivalry, sanctions on Russia, and US military actions in Venezuela have heightened global risk aversion. These developments have triggered capital flight from emerging markets, increased currency volatility, and led to sharp corrections in equity markets, particularly in India, affecting global investment strategies.

Infrastructure Investment Drives Construction Boom

US infrastructure spending, supported by federal and state initiatives, is fueling robust growth in construction and heavy equipment markets. This trend supports supply chain modernization and creates opportunities for global suppliers, though regulatory and environmental uncertainties persist.

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.

Critical Minerals Geopolitics Intensifies

Australia’s dominance in lithium, nickel, and rare earths positions it at the heart of global supply chain security for green technologies. Strategic partnerships and resource nationalism are rising, with ethical and environmental governance under scrutiny for international investors.

State Intervention and Subsidy Expansion

The German government, with EU approval, is expanding subsidies for new gas-fired power plants and industrial electricity costs. While aimed at supporting industry, these interventions raise concerns about long-term competitiveness, fiscal sustainability, and potential market distortions within the EU.

Semiconductor Industry Dominance

Taiwan’s TSMC holds over 70% global market share in advanced chip manufacturing, driving AI and tech supply chains. Its expansion in the US and record profits underscore Taiwan’s critical role, but also expose it to geopolitical risks and trade policy shifts.

Major Infrastructure and Capital Relocation Push

Significant investments are flowing into Indonesia’s new capital, IKN, with new projects in commercial, culinary, and office sectors. This development signals increased investor confidence and aims to establish IKN as a new economic growth hub by 2028, influencing long-term investment strategies.