Digital Blackouts and Technology Restrictions

Iran’s government has imposed repeated internet blackouts and tightened technology controls to suppress dissent, disrupting business operations, cross-border communications, and digital commerce. These restrictions have also driven a black market for smuggled technology and hindered foreign investment in Iran’s digital sector.

EU partnership deepens market access

Vietnam–EU ties were upgraded to a comprehensive strategic partnership, reinforcing the EVFTA-driven trade surge (two-way trade about US$73.8bn in 2025) and opening new cooperation on infrastructure, cybersecurity, and supply-chain security—supporting diversification away from US/China shocks.

Critical Minerals Supply Chain Realignment

Australia is rapidly expanding its critical minerals sector, including rare earths, lithium, gallium, and scandium, to reduce reliance on China and support allied supply chains. Strategic stockpiles and new mining projects are reshaping global supply chains, attracting major international investment and government backing.

Ports and freight connectivity upgrades

Karachi logistics is improving via DP World–Pakistan Railways Pipri freight corridor and new automated bulk-handling equipment, aiming to shift containers from road to rail and reduce turnaround times. Execution risk persists, but successful delivery lowers inland logistics costs and delays.

Critical Minerals Investment Surge

Brazil is attracting substantial foreign investment in critical minerals, including rare earths, graphite, and nickel. Strategic partnerships with the US and EU are developing, positioning Brazil as a key supplier for clean energy and technology supply chains, and diversifying away from China.

Semiconductor controls and AI choke points

Tighter export controls, selective approvals, and new tariffs on advanced chips are reshaping global tech supply chains. Firms face compliance burdens, China retaliation risk, and higher hardware costs; U.S.-based capacity and trusted suppliers gain strategic priority.

Currency Shift Reduces Dollar Exposure

Russia now conducts nearly all trade with China and India in national currencies, minimizing reliance on the dollar and euro. This currency shift alters payment risk profiles, complicates cross-border transactions for global firms, and signals a long-term pivot away from Western financial systems.

Regulatory Environment Grows More Complex

The US is implementing significant regulatory changes, including expanded compliance requirements and sector-specific rules. Businesses face increased costs and operational complexity, particularly in finance, technology, and manufacturing, affecting market entry and ongoing operations.

Sluggish Growth and Structural Reform

Thailand’s GDP growth is projected at just 1.5–2.0% for 2026, the lowest in three years, driven by weak exports, currency appreciation, and political uncertainty. This stagnation is prompting urgent calls for structural reforms, impacting investment strategies and business confidence.

Escalating Australia-China Trade Tensions

Recent moves by Australia to impose tariffs and quotas on Chinese steel, and disputes over the Port of Darwin, have reignited trade tensions. These developments risk retaliatory Chinese actions, impacting Australia’s exports, investment flows, and overall business climate.

Tax enforcement, digitisation, disputes

IMF-mandated tax reforms expand enforcement, digital payments and FBR capability, while high taxes are cited in multinational exits. Contractual tax disputes (e.g., “super tax” in petroleum) add legal uncertainty, affecting project finance, arbitration risk, and long-term investment appetite.

Rising cyber risk and compliance

La stratégie nationale cybersécurité 2026-2030 répond à un record de 348 000 atteintes en 2025 (+75% en cinq ans). Priorités: formation, sécurisation technologique, préparation de crise, mobilisation du privé et réduction des dépendances, renforçant obligations fournisseurs et audits.

Critical Minerals and Mining Ambitions

With $2.5 trillion in mineral reserves, Saudi Arabia is investing $110 billion to become a regional mining and processing hub. Strategic partnerships, especially with the US, aim to reduce supply chain dependence on China and position the Kingdom as a key player in global mineral supply chains.

Tighter inbound investment screening

CFIUS scrutiny is broadening beyond defense into data-rich and “infrastructure-like” assets, raising execution risk for cross-border M&A and minority stakes. Investors should expect longer timelines, mitigation demands, and valuation discounts for sensitive data, education, and tech targets.

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.

Semiconductor Reshoring and Taiwan Deal

A landmark US-Taiwan trade agreement lowers tariffs to 15% and secures $250 billion in Taiwanese semiconductor investment, with TSMC expanding US operations. This accelerates domestic chip manufacturing, reshapes supply chains, and heightens strategic rivalry with China, affecting global tech sector dynamics.

Auto sector disruption and China competition

Chinese vehicle imports are surging, widening the China trade gap and intensifying pressure on local manufacturing. Government is courting Chinese investment (e.g., potential plant transfers) while considering trade defenses and new-energy-vehicle policy. Suppliers face localisation shifts, pricing pressure and policy uncertainty.

Global Supply Chain Diversification Trend

Amid US-led tariff wars, UK businesses are accelerating efforts to diversify suppliers and markets, particularly towards India and Asia-Pacific. This shift aims to mitigate risks from geopolitical shocks and ensure resilience in critical sectors such as automotive and technology.

Supply Chain Disruptions and Humanitarian Restrictions

Israeli restrictions on aid organizations and border crossings, especially at Rafah, have disrupted humanitarian flows and supply chains. New registration requirements and ongoing security measures complicate logistics for international businesses and NGOs, raising operational and reputational risks.

Sanctions Enforcement Targets Russian Oil

France’s aggressive enforcement of sanctions against Russia’s shadow oil fleet, including high-profile tanker seizures, heightens geopolitical risk in maritime trade. This robust stance, coordinated with allies, may provoke Russian retaliation and impact global energy supply chains.

Digital, AI, and Talent Integration

Mexico is emerging as a strategic AI and digital infrastructure hub for North America, with major investments in data centers, advanced manufacturing, and tech talent. Integration with US firms and regulatory alignment under USMCA enhance regional competitiveness, resilience, and innovation in technology-driven sectors.

Infrastructure Expansion and Logistics

Major investments in logistics, such as the BR-163 highway extension (R$10.6 billion), are improving connectivity for agribusiness and exports. Persistent delays in rail projects highlight ongoing challenges, but road upgrades support supply chain efficiency and export competitiveness.

Industrial policy and subsidy conditions

CHIPS Act and IRA-era incentives keep steering investment toward U.S. manufacturing and clean energy, often with domestic-content, labor, and sourcing requirements. This reshapes site selection and supplier qualification, while creating tax-credit transfer opportunities and compliance burdens for global operators.

Carbon Market Regulation and Opportunities

Brazil is preparing to launch a regulated carbon credit market by 2030, unlocking significant investment in forest conservation, renewable energy, and agriculture. This regulatory shift will drive demand for carbon credits, impacting polluting industries and boosting international climate finance flows.

AI, Misinformation, and Public Trust Challenges

The US government and major corporations are increasingly using AI for both operational efficiency and public communication. The proliferation of AI-generated content, including official government imagery, is raising concerns about misinformation and eroding public trust. This trend is prompting regulatory scrutiny and reputational risk for businesses, especially those in technology, media, and consumer-facing sectors.

Renewable Energy Transition Partnerships

Indonesia is accelerating its energy transition through partnerships with global firms, notably China’s GCL, to develop renewable and waste-to-energy projects. These initiatives support emissions reduction targets and open new opportunities for clean energy investment.

EU Customs Union modernization momentum

Turkey and the EU agreed to keep working toward modernizing the 1995 Customs Union, with business pushing to expand it to services, digital and procurement. Progress could reduce friction for integrated value chains, but talks remain conditional on rule-of-law and climate alignment.

USMCA renegotiation and North America risk

Rising tariff threats toward Canada and tighter USMCA compliance debates are increasing uncertainty for autos, agriculture, and cross-border manufacturing. Firms should map rules-of-origin exposure, diversify routing, and prepare for disruptive bargaining ahead of formal review timelines.

Tech Sector Expansion Amid Global Demand

Israel’s technology sector, including AI and semiconductor equipment, is experiencing robust growth, attracting major investments like Nvidia’s new campus. This expansion strengthens Israel’s global tech leadership but also strains local infrastructure and raises competition for talent.

Automotive Sector Policy Shifts

The automotive industry is navigating trade tensions, policy uncertainty, and a flood of cheap imports, particularly from China. The government is considering tariff adjustments and new energy vehicle policies, with the sector’s future hinging on reform momentum and global market access.

Supply Chain Disruptions from Conflict

Ukrainian drone and missile strikes on Russian refineries and logistics hubs in 2025 led to the lowest pipeline deliveries since 2010 and a 25% drop in energy income. Such disruptions threaten supply reliability for global partners and heighten operational risks.

Defence exports and geopolitical positioning

Turkey’s defence industry is expanding exports and co-production, exemplified by a reported $350m arms agreement with Egypt and large-scale drone manufacturing capacity growth. This supports industrial upgrading and regional influence, but can elevate sanctions, licensing and reputational due-diligence requirements.

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.

Tariff Volatility and Legal Risk

U.S. tariff policy is highly fluid, with threatened hikes on key partners and the Supreme Court reviewing authority for broad “reciprocal” duties. This uncertainty raises landed-cost volatility, complicates contract pricing, and increases incentive for regionalizing production and sourcing.

Critical Mineral Diversification Strategy

Japanese firms are rapidly diversifying supply chains for minerals like gallium and rare earths, securing new sources in Kazakhstan and Australia. These efforts aim to reduce strategic vulnerabilities, ensure manufacturing continuity, and stabilize high-tech sectors amid global supply shocks.

Critical Minerals Strategy and Supply Chain Security

Australia is rapidly expanding its critical minerals sector, prioritizing rare earths, gallium, and scandium. Strategic reserves and Western partnerships aim to reduce dependence on China, shaping investment, supply chain resilience, and global competitiveness in clean energy and technology.