Energy Independence and Downstreaming Push

Indonesia is accelerating its drive for energy independence, targeting a five-year timeline to reduce fuel imports through new refineries, solar energy, and downstream projects. This policy shift will reshape energy supply chains, investment flows, and local sourcing requirements.

Investment Screening And Competition

Reforms in UK merger control and national security investment screening are intensifying, with stricter scrutiny of foreign investments and competition policy. This creates new compliance demands and could slow cross-border deals, affecting strategic investment planning.

Energy Sector and Industrial Policy Dynamics

Petrobras-led initiatives are revitalizing Brazil’s naval and energy industries, while the government balances oil exploration with climate commitments. The sector’s performance, regulatory changes, and global commodity trends will influence Brazil’s industrial output, export capacity, and investment climate.

Vision 2030 Economic Reforms Advance

Saudi Arabia continues to implement Vision 2030 reforms, focusing on economic diversification, infrastructure megaprojects, and attracting foreign investment. These initiatives offer new opportunities but require careful navigation of evolving regulations and local partnership requirements.

Internationalization Amid Domestic Uncertainty

Facing political and economic uncertainties, 56% of French business leaders plan to expand internationally by 2026, up from 36% last year. Europe and Southeast Asia are favored destinations, reflecting a strategic shift to diversify risks and sustain growth.

Black Sea Grain Export Disruptions

Ongoing Russian attacks on Odesa and other Black Sea ports target civilian ships and port infrastructure, aiming to disrupt Ukraine’s agricultural exports. These disruptions threaten global food security and complicate logistics for international trade partners.

Nusantara Capital City Development

The government allocated Rp6 trillion for the new capital, Nusantara, focusing on transparent governance and strategic infrastructure. This project attracts global investors, reshapes regional logistics, and creates new opportunities for construction, services, and technology firms.

Structural Reform and Competitiveness

Thailand faces deep structural challenges, including declining competitiveness, high household debt, and outdated regulations. Without accelerated reforms, GDP growth risks falling below 2%, threatening Thailand’s position in regional supply chains and global investment strategies.

US Dollar Decline Reshapes Investment

The US dollar fell 10–12% against major currencies in 2025, driven by policy uncertainty and global capital flows. This depreciation raised import costs and inflation, but boosted US exports and international investment returns, compelling companies to adapt currency risk strategies and portfolio allocations.

Tourism and Foreign Investment Surge

Tourism arrivals grew 13.6% in 2025, with foreign investment in the sector up 40.3%. Infrastructure upgrades for the 2026 FIFA World Cup and strong demand from the US, Canada, and Europe support growth, but security and regulatory stability remain key for sustained investment.

Sanctions Severely Disrupt Energy Revenues

Western and Ukrainian sanctions have driven Russian oil and gas revenues down by 35%, forcing deep discounts and rerouting through opaque channels. This undermines Russia’s fiscal stability and creates volatility for global energy markets and supply chains.

National Security Strategy and Economic Unilateralism

The 2025 US National Security Strategy prioritizes reindustrialization, energy independence, and technological supremacy. Its mercantilist, interventionist stance increases regulatory barriers, marginalizes allies, and risks global market fragmentation, directly affecting international trade and investment planning.

Growing Dependence on China

As Western markets close, Russia’s trade dependence on China has deepened, with China accounting for 27% of exports and 45% of imports. However, bilateral trade is also weakening, with a 7.6% decline in oil exports and 11% in coal, creating structural vulnerabilities.

Energy Security and Diversification Drive

Egypt is stabilizing its energy sector through increased domestic production, major LNG import deals with Qatar and Israel, and regional infrastructure projects. These efforts enhance supply reliability and position Egypt as a regional energy hub, impacting industrial competitiveness and investment planning.

Renewable Energy Investment Acceleration

Egypt signed $1.8 billion in renewable energy deals with Norway’s Scatec and China’s Sungrow, including Africa’s largest solar project. With a target of 42% renewables by 2030, international financing and technology partnerships are critical for energy security, industrial growth, and climate commitments.

Sector-Specific Tariff and Regulatory Changes

The new US-Taiwan framework includes sectoral tariff caps and exemptions, notably for semiconductors, auto parts, and pharmaceuticals. These changes alter cost structures, market access, and compliance requirements for multinational firms operating in and with Taiwan.

EU Trade Policy and Global Realignment

Germany is actively pursuing new trade agreements, notably the India-EU Free Trade Agreement and Mercosur deal, to counterbalance challenges from US protectionism and EU fragmentation. These efforts are critical for maintaining export markets and supply chain resilience amid shifting global alliances.

Executive Recruitment and Skills Shortages

Intense competition for executive and specialized talent is driving up demand for recruitment consulting. Skill gaps, especially in AI and technology, are reshaping hiring strategies and affecting international business expansion and supply chain resilience.

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.

Slow Progress on Energy Transition

Despite ambitious targets, France’s decarbonization rate slowed to 1.6% in 2025, far below the 4.6% annual reduction needed for 2030 goals. Dependence on fossil fuels and policy delays increase regulatory and reputational risks for energy-intensive industries.

Energy Infrastructure Under Persistent Attack

Russian missile strikes continue to target Ukraine’s energy grid, causing widespread power outages and threatening industrial operations. The instability in energy supply poses significant risks for manufacturing, logistics, and foreign investment in affected regions.

AI Industry Expansion and Investment

Driven by government plans to triple AI spending and strong private sector momentum, South Korea aims to become a global AI leader by 2026. This accelerates foreign direct investment, especially in advanced manufacturing and data centers, reshaping supply chains and business priorities.

Trade Barriers and Tariff Pressures

Rising U.S. tariffs and the EU’s Carbon Border Adjustment Mechanism are challenging South Korean exporters, especially in steel, auto parts, and electronics. These barriers threaten price competitiveness and require strategic adaptation to evolving global regulatory landscapes.

Mandatory Ethanol-Blended Fuel Rollout

Indonesia will mandate 10% ethanol-blended fuel by 2028, offering incentives for ethanol plant investments and tax relief. This policy supports bioethanol production, reduces fuel imports, and creates new opportunities for international investors in renewable energy and agribusiness.

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.

Transport and Infrastructure Modernization

Major upgrades in ports, roads, and public transport—including the Red Sea Container Terminal and high-speed rail—align with Egypt Vision 2030. These projects enhance Egypt’s logistics capabilities, regional connectivity, and competitiveness, supporting trade, tourism, and investment flows.

Export Diversification and Market Shift

China has offset declining US trade by expanding exports to Africa (up 26.5%), Southeast Asia (up 14%), and Latin America (up 8%). This diversification strategy reduces reliance on Western markets, strengthens ties with the Global South, and reshapes global trade flows.

Fragmentation Of Global Governance

US disengagement from multilateral institutions fosters a shift toward regional and bilateral diplomacy. This fragmentation undermines global standards, increases regulatory uncertainty, and forces international businesses to navigate diverging climate, trade, and digital frameworks.

Monetary Policy Shifts and Dollar Volatility

The Federal Reserve’s cautious approach to rate cuts, persistent inflation concerns, and political pressure are driving market uncertainty. Dollar weakness and financial repression are impacting global investment strategies, cross-border financing, and commodity pricing, with ripple effects across emerging markets.

Political Stability and Policy Continuity

Brazil’s trade performance benefited from government efforts to maintain stability and promote international agreements. However, political developments, such as investigations into former leaders and ongoing US negotiations, could affect investor confidence and regulatory predictability.

Real Estate and Infrastructure Investment Dynamics

Security tensions and labor shortages have slowed new construction, causing housing prices to rise. Government incentives and strategic planning in border regions, especially the Gaza Envelope, offer opportunities for foreign investors, but market volatility and regional risks remain high.

Supply Chain Resilience and Infrastructure

Border instability, logistics costs at 15–16% of GDP, and reliance on imported components expose Thailand’s supply chains to disruption. Calls for infrastructure upgrades, automation, and regional energy cooperation are central to enhancing resilience and lowering operational risks.

Record Foreign Direct Investment Inflows

Turkey attracted $12.4 billion in FDI in the first 11 months of 2025, a 28% year-on-year increase. The EU accounts for 75% of FDI, with key sectors including wholesale, retail, ICT, and food manufacturing, signaling robust investor confidence and sectoral opportunities.

Canada-China Trade Normalization and Tariff Reset

Canada and China have reached a landmark agreement to reduce tariffs on electric vehicles and canola, unlocking nearly $3 billion in Canadian exports. This deal signals a thaw in bilateral relations, but risks U.S. retaliation and supply chain realignment, especially in autos and agriculture.

EU Accession Reforms Accelerate

Ukraine’s economic support package is tied to EU accession reforms, including governance, anti-corruption, and regulatory alignment. Progress on these reforms will enhance market access, legal predictability, and integration into European supply chains, benefiting international investors.

Energy Transition and Cost Pressures

Germany’s energy transition has led to high electricity and gas prices, reduced supply reliability, and increased vulnerability following the loss of Russian imports. The government is subsidizing new gas plants and industrial power, but energy costs remain a major drag on competitiveness and investment.