Coal and Commodity Levy Recalibration

Indonesia is also reviewing coal export duties and broader windfall-style fiscal measures to capture elevated commodity prices. Even if phased cautiously, changing levies could alter export competitiveness, state revenue flows, mining investment assumptions, and procurement strategies for commodity-dependent manufacturers.

Trade-Exposed Regional Weakness

Trade uncertainty is spilling into regional business conditions, especially in manufacturing-heavy hubs such as Windsor. With about 90% of local exports crossing the U.S. border and unemployment still elevated, companies are delaying hiring, investment, housing activity, and supplier commitments across connected sectors.

China diversification reshapes supply chains

Australia is deepening trade and security partnerships to reduce concentrated dependence on China in minerals processing and strategic inputs, creating opportunities for partner-country investors while raising compliance, geopolitical, and market-access considerations for firms exposed to Sino-Australian economic frictions.

Critical Minerals Supply Chain Buildout

Canada is accelerating domestic processing for lithium, graphite and other critical minerals through brownfield industrial hubs and northern infrastructure. Projects aim to reduce dependence on foreign processing, especially China, creating new opportunities in battery materials, but execution risks remain around permitting, capital and transport links.

CPEC Assets Face Financial Strain

China-linked power and infrastructure projects remain commercially significant, but rising arrears to Chinese independent power producers highlight payment and contract risks. With CPEC liabilities embedded in the energy crisis, investors face heightened concerns over sovereign guarantees, renegotiation exposure and project bankability.

Nusantara Capital Investment Momentum

The new capital project continues attracting private commitments, with Rp1.27 trillion in fresh deals and Rp72 trillion from 57 companies by early 2026. This creates openings in construction, logistics, property, and services, though execution timing and policy continuity remain important variables.

Security and Water Stress Risks

Operational risk is elevated by insecurity and resource stress. The OECD estimates insecurity reduces potential growth by 1–2 percentage points annually, while worsening water scarcity and leakage losses of up to 46% threaten manufacturing continuity, site selection and logistics reliability in key industrial regions.

China Decoupling Trade Pressures

Mexico’s new 5% to 50% tariffs on 1,463 non-FTA product lines, widely aimed at Chinese inputs, are reshaping sourcing decisions. Beijing says measures affect over $30 billion in exports and may retaliate, raising costs for manufacturers reliant on Asian components.

Persistent Energy Infrastructure Disruption

Russian missile and drone strikes continue to damage power and gas networks, triggering household blackouts and industrial power restrictions across multiple regions. Recurrent outages raise operating costs, disrupt manufacturing schedules, complicate logistics, and increase demand for backup generation and energy security investments.

Defence Industry Internationalisation Accelerates

Ukraine’s defence sector is integrating into European and regional supply chains through a €1.5 billion EU programme, Gulf agreements and new joint-production deals. This expands opportunities in drones, electronics, components and advanced manufacturing, while increasing strategic export potential.

Semiconductor Supply Chain Vulnerability

South Korea’s chip sector faces multiple shocks at once: US export controls affecting Samsung and SK hynix demand, AI-driven bottlenecks, and dependence on critical inputs such as helium, bromine and tungsten, raising supply, cost and customer-delivery risks.

IMF-Driven Fiscal Tightening

Pakistan’s IMF staff-level agreement unlocks about $1.2 billion but binds Islamabad to a 1.6% of GDP primary surplus, stricter tax collection, and continued reforms. Businesses should expect tighter demand, budget discipline, and periodic policy adjustments affecting investment planning.

Electoral Integrity and Protest Risk

Fresh allegations of vote-buying, coercion and intimidation affecting up to 500,000 votes have intensified concerns over electoral integrity. A disputed result could trigger protests, delayed transition or administrative disruption, creating short-term operational, security and transport risks, especially in Budapest and contested regions.

Industrial Competitiveness Erosion Deepens

Germany’s export-led model is under heavy strain as industrial output weakens, firms lose over 10,000 jobs monthly, and competitiveness deteriorates under high energy, labor, tax, and regulatory costs, reducing Germany’s ability to capture global demand and complicating investment planning.

Defence Spending Reshapes Industry

Canada has reached NATO’s 2% spending target with more than $63 billion in defence outlays, triggering major procurement and industrial expansion. New contracts in munitions, rifles, naval infrastructure and aerospace should lift manufacturing demand, domestic sourcing and allied supply-chain integration.

Fuel Subsidy Reforms Raise Costs

Egypt raised domestic fuel prices by 14% to 30% in March, including diesel, gasoline, and cooking gas. These reforms support fiscal consolidation but materially increase freight, manufacturing, and distribution expenses, with likely second-round inflation effects across supply chains and retail markets.

Monetary Tightening and Yen

The Bank of Japan’s 0.75% policy rate and hawkish guidance point to further tightening, while markets price another hike soon. A weak yen near politically sensitive levels is raising import costs, reshaping hedging, financing, and cross-border investment decisions.

Market Diversification Toward Asia

Ottawa is exploring broader commercial options beyond the U.S., including energy exports to Asia and selective re-engagement with China-linked sectors. Diversification could reduce concentration risk, but it also brings geopolitical friction, regulatory scrutiny, and exposure to politically sensitive counterparties.

Shadow Trade And Payment Networks

Iran’s external trade increasingly relies on shadow fleets, ship-to-ship transfers, shell companies and parallel banking channels, often routed through China and Hong Kong. This raises sanctions-screening, counterparty, AML and reputational risks for firms exposed to regional shipping, commodities or finance.

Industrial Shortages and Power Strain

Factories and producers are facing raw-material shortages, internet disruptions, and broader wartime administrative strain, impairing production continuity. Businesses operating in or sourcing from Iran face greater risks of delays, lower output, contract nonperformance, and volatile input availability.

Import Costs Hit US Buyers

Recent analyses show foreign exporters absorb only about 5% of US tariff costs, leaving American firms and consumers to bear most of the burden. Higher landed costs, margin compression, and selective price increases will continue shaping procurement, pricing, and contract strategies.

Hormuz Chokepoint and Shipping Controls

Iran’s effective control of the Strait of Hormuz has slashed transits by roughly 90-95%, raised war-risk insurance, and introduced IRGC clearance and toll demands, disrupting oil, LNG, container flows, delivery schedules, and compliance planning for firms reliant on Gulf shipping.

Trade Policy Volatility Intensifies

U.S. trade policy remains highly unstable after the Supreme Court voided earlier emergency tariffs, leaving a temporary 10% blanket tariff in place until July. Fast-tracked Section 301 probes across roughly 60 economies raise renewed risks for import costs, sourcing decisions, and cross-border investment planning.

AI Chip Controls Tighten

US enforcement against advanced chip diversion to China is intensifying, highlighted by a US$2.5 billion server-smuggling case and scrutiny of Chinese end-users. Businesses face higher compliance, licensing and transshipment risks across semiconductors, cloud infrastructure, electronics and Southeast Asia distribution networks.

High Interest Rates, Volatile Rand

The Reserve Bank is expected to hold rates at 6.75% as oil-driven inflation and rand weakness cloud the outlook. Markets have shifted from pricing cuts to possible hikes, raising hedging costs, financing uncertainty and currency risk for importers, investors and multinationals.

EU Trade Alignment Pressures

Turkey is advancing customs-union updating efforts with the EU while adapting to green transformation rules. For manufacturers, especially automotive suppliers, compliance with carbon regulations, digital standards and sustainability reporting is becoming central to market access and competitiveness.

External Financing Vulnerabilities Persist

Egypt has faced renewed capital outflows, including about EGP 210 billion in early March and roughly $4 billion from treasury markets. Although reserves remain improved, dependence on IMF support, volatile portfolio flows, and weaker external revenues heighten financing and payment risks.

US Trade Frictions Escalate

Washington has flagged South Africa in a Section 301 probe and already imposed 30% tariffs on steel, aluminium and automotive exports. The fluid dispute raises market-access risk, complicates export planning, and may alter investment decisions for manufacturers serving the US.

Tax Reform Implementation Transition

Brazil’s tax overhaul is entering operational testing in 2026, with CBS beginning in 2027 and IBS transition from 2029. Companies must adapt invoicing, pricing, supplier structures, and credit recovery processes as cumulative taxes are replaced by a VAT-style system.

Industrial Operations Face Power Curbs

Authorities continue imposing hourly outage schedules and industrial electricity limits, with some restrictions lasting through peak evening demand. Energy-intensive manufacturers, processors, and cold-chain operators face production losses, equipment strain, and rising contingency costs, reinforcing the need for flexible operating models.

US-Taiwan Trade Pact Reset

Taiwan’s new U.S. trade architecture could cut tariffs on up to 99% of goods, deepen digital and investment rules, and widen market access. For exporters and investors, benefits are material, but compliance, political approval, and follow-on U.S. trade probes remain important variables.

Electricity Reform Unlocks Private Investment

Power-sector reform is improving the operating environment, but execution remains crucial. Government says over 220GW of renewable projects are in development, 36GW are in grid-connection processes, and R29 billion of investment is confirmed, supporting lower energy risk for industry.

Foreign investment remains resilient

Costa Rica attracted $5.12 billion in FDI in 2025, above $5 billion for a second year, with manufacturing receiving $3.9 billion. Reinvestment rose 26%, but new capital fell 18%, signaling confidence in incumbents yet more selective greenfield expansion.

Labour Supply and Skills Gaps

Persistent labour shortages, especially in construction, IT, healthcare, and advanced industry, continue to constrain output and raise operating costs. Skills mismatches and post-Brexit supply tightening are increasing wage pressure, delaying delivery timelines, and complicating expansion strategies for employers.

Tourism and Hospitality Investment Surge

Tourism is becoming a major non-oil growth engine, with SAR452 billion in committed investment, 122 million tourists in 2025, and SAR301 billion in spending. Full foreign ownership and incentives are expanding opportunities across hotels, services, logistics, and consumer-facing operations.

Trade Defenses Reshape Sourcing

Vietnam is tightening trade-remedy enforcement, including temporary anti-circumvention measures on selected Chinese hot-rolled steel at 27.83%. This signals tougher compliance for importers, higher sourcing complexity for industrial buyers, and greater pressure to diversify suppliers, documentation systems, and product specifications.