Fuel Shock Raises Logistics Costs

Diesel prices surged 13.9% in March and gasoline rose about 4.5%, reflecting global oil disruption. For freight-dependent sectors such as agribusiness, retail and manufacturing, higher transport costs threaten margins, inventory planning and domestic distribution efficiency across Brazil’s vast geography.

Red Sea Shipping Rerouting

Houthi threats and Bab el-Mandeb disruption continue to distort Israel-linked shipping, especially through Eilat. Although first-quarter freight there rose 118% and 11,500 tonnes of vehicles moved via Jordan, businesses still face longer routes, higher freight costs and logistics uncertainty.

Geopolitical Spillovers, Trade Disruption

Regional conflict is affecting Turkey through oil prices, tanker disruption around Hormuz and broader uncertainty rather than direct spillover. Businesses face elevated contingency requirements for shipping, insurance, inventory buffers and market-demand assumptions, especially in energy-intensive and logistics-dependent industries.

China trade tensions re-emerging

Australia is widening anti-dumping measures on Chinese steel, including raising rebar tariffs to 24%, prompting warnings from Beijing. The shift signals renewed trade friction risk, potentially increasing input costs for construction and manufacturing while complicating bilateral commercial exposure and sourcing decisions.

Data governance and localization

China is tightening oversight of industrial and cross-border data, with security reviews and vague definitions of ‘important data’ complicating operations. This raises compliance burdens for automotive, finance, pharma, and technology firms that depend on integrated global R&D and data-management systems.

Offshore Wind Investment Expansion

The Crown Estate plans a new offshore wind leasing round in 2027 with around 6GW or more capacity, potentially creating up to 10,000 direct jobs and adding over £12 billion. This supports long-term energy security, infrastructure investment, and domestic clean-tech supply-chain opportunities.

Resilient tech attracting capital

Despite wartime conditions, Israel’s technology sector continues drawing foreign funding, with 28 startups raising $1.1 billion in March and first-quarter funding above $3 billion. This supports M&A, innovation partnerships and high-value services exports, but concentration risk remains.

Resilient yet shifting tech investment

Israel’s technology sector continues attracting foreign capital, with roughly $3 billion raised in the first quarter and new R&D tax credits approved. However, investors increasingly seek overseas structures, creating longer-term risks around intellectual property, tax base erosion and operational relocation.

PIF shifts to domestic focus

The Public Investment Fund’s 2026–2030 strategy prioritizes domestic ecosystems and capital efficiency, with roughly 80% of its portfolio targeted at Saudi investments. This should favor local partnerships in logistics, manufacturing, tourism, and clean energy, while tightening scrutiny on project returns and timelines.

Non-Oil Export Base Deepens

Non-oil exports reached a record SR624 billion in 2025, up 15%, lifting their share of total exports to 44%. Growth in services, re-exports, machinery, fertilizers, and food signals broader trade diversification and stronger opportunities for manufacturing and logistics firms.

Economic Security Policy Reset

Tokyo is strengthening economic security tools through updated investment screening, tighter controls on critical supply chains, and closer resilience planning with partners. Businesses in semiconductors, critical minerals, defense-linked sectors, and sensitive technologies should expect greater compliance and screening requirements.

Tax, Labour and Social Cost Reforms

A 2027 income-tax reform for lower and middle earners is planned, alongside debates over higher taxes on top earners, labour-market changes and social spending restraint. Potential shifts in payroll burdens, retirement rules and household demand will affect cost structures and consumption.

Myanmar Border Risks Persist

Thailand is seeking to restore border trade with Myanmar while reducing violence, scam networks and narcotics flows. Since roughly 80% of bilateral trade moves through border channels, security disruptions, checkpoint restrictions and pollution concerns remain material for logistics planning.

Fiscal and Government Funding Friction

The prolonged DHS shutdown, budget fights, and large fiscal deficits add operational and policy uncertainty. Businesses may face disruptions in customs-adjacent services, transport security, contracting, and permitting, while medium-term fiscal pressures could reshape taxes, spending priorities, and regulatory enforcement.

Cross-Border Payments Under Pressure

Iran’s trade settlement channels face tighter scrutiny as U.S. authorities warn banks in China, Hong Kong, the UAE and Oman over suspected illicit Iranian flows. Businesses face greater payment delays, blocked transfers, correspondent-banking risk and compliance burdens across regional trade networks.

Buy Canadian Policy Expands

Ottawa is using procurement and defense policy to build domestic industrial capacity, targeting 70% of defense contracts for Canadian firms and aiming to double non-U.S. exports. The shift may support local suppliers but could trigger trade friction and compliance complexity.

Fiscal Consolidation and Tax Reform

Brazil’s 2027 budget targets a R$73.2 billion primary surplus, with debt peaking near 87.8% of GDP in 2029. Simultaneously, consumption-tax reform and tighter tax-benefit rules will reshape compliance costs, pricing, margins, and investment planning across sectors.

Foreign Investment Confidence Erosion

American Chamber data show 64% of surveyed U.S. firms in China now rank China’s economic slowdown as their top concern, ahead of bilateral tensions. Regulatory inconsistency, uneven market access, and opaque enforcement are weakening long-term investment confidence despite China’s market scale.

Bipartisan Shift Toward Protectionism

US trade strategy has moved away from broad liberalization toward tariffs, industrial policy, and narrower security-led agreements. This bipartisan shift suggests persistent barriers and compliance burdens beyond any single administration, requiring firms to plan for structurally higher intervention in cross-border trade and investment.

Oil Revenues Defy Price Cap

Russian oil exports remain commercially significant despite Western caps. Urals crude reportedly reached $94.5 per barrel in March, far above the $44.1 EU-UK cap, while Indian purchases rose sharply, underscoring persistent enforcement gaps and ongoing volatility in global energy trade.

LNG and Nuclear Buildout

Vietnam is accelerating major LNG and nuclear-linked cooperation to secure baseload power, including US$2.23 billion Quynh Lap and US$2.2 billion Ca Na projects plus South Korean nuclear discussions. These projects improve long-term energy resilience but create execution, financing, and import-dependence risks.

Power Sector Debt and Reliability

Circular debt near Rs1.9 trillion, failed $36 billion refinancing plans, and T&D losses of 17.55% continue to undermine electricity affordability and reliability. For businesses, persistent load-shedding, tariff pressure, and weak grid performance increase operating risk and erode industrial competitiveness.

Regulatory Reform and Investment Climate

The new government is advancing an omnibus law and ‘super license’ to consolidate approvals within 180 days and reduce bureaucracy. If implemented effectively, reforms could improve foreign investor entry, shorten project lead times, and partially offset Thailand’s longstanding regulatory complexity.

China Dependence Versus Diversification

Vietnam is deepening trade, rail, energy and technology ties with China, its largest trading partner at roughly US$256 billion in 2025. While this supports inputs and infrastructure, it heightens exposure to geopolitical pressure, transshipment accusations and supply-chain concentration risk for foreign investors.

War Economy Weakens Civilian Growth

Russia’s macroeconomic backdrop is deteriorating despite wartime spending. GDP fell 1.8% in January-February, first-quarter contraction was estimated at 1.5%, oil and gas revenues dropped 45%, and the budget deficit reached 4.58 trillion rubles, constraining non-defense investment and demand.

Automotive Policy and China Pressure

Germany is pushing in Brussels for softer post-2035 vehicle rules, including greater flexibility for e-fuels and plug-in hybrids, to protect its auto base. The debate reflects mounting pressure from more competitive Chinese producers across EVs, machinery and supplier chains.

Energy Import Cost Surge

Regional conflict has sharply raised Egypt’s gas and oil import bill, with monthly gas costs reportedly jumping by $1.1 billion to $1.65 billion. Higher fuel prices, energy rationing, and cost pass-through threaten manufacturers, logistics operators, and import-dependent sectors.

Tariff Circumvention Enforcement Intensifies

US authorities are scrutinizing transshipment through Mexico and Southeast Asia more aggressively. Altana estimates roughly $300 billion in tariffed goods avoid levies annually, while suspect transactions rose 76% in the first 10 months of 2025, increasing customs, audit, and origin-verification risks.

PIF Reprioritizes Domestic Investment

The Public Investment Fund will allocate about 80% of its $925 billion portfolio domestically through 2030, prioritizing logistics, manufacturing, tourism, clean energy, and Neom. Investors should expect more local partnership opportunities, but also sharper capital-discipline and project reprioritization.

Water Infrastructure Systemic Failure

Water insecurity is becoming a material business risk, especially in Gauteng and smaller municipalities. Nearly half of treated water is lost before delivery, 64% of wastewater works are critical, and recurring outages are driving higher private backup, compliance and operating costs.

BOJ Tightening and Yen Volatility

The Bank of Japan is weighing further rate hikes as inflation stays near target, wages exceed 5% for a third year, and the yen remains weak. Uncertain timing is increasing volatility in borrowing costs, FX exposure, hedging decisions, and investment planning.

Currency Volatility and Hot Money

The pound remains vulnerable to regional shocks and portfolio flows. Egypt saw roughly $8 billion of outflows during recent turmoil, although later debt inflows of $1.78 billion offered support. Businesses face foreign-exchange uncertainty, repricing risk, and potentially volatile import costs.

Outbound Chip Investment Reshapes Base

TSMC’s overseas expansion, including reported plans for 12 Arizona fabs, is shifting part of the semiconductor ecosystem outward. This diversifies geopolitical risk for customers, but may gradually redirect capital, talent, and supplier footprints away from Taiwan’s domestic industrial base.

Coalition Politics Clouds Policy

Political frictions around budget and VAT debates within the governing coalition are adding uncertainty to fiscal policy, reform sequencing, and business planning. For investors, coalition management now matters more, because legislative delays can slow infrastructure, tax, and regulatory decisions.

IMF Reforms Stabilize Economy

IMF-backed reforms, exchange-rate flexibility, and tighter policies have improved resilience, with reserves at $52.8 billion and inflation down from 38% to 11.9% before renewed shocks. Investors benefit from stronger buffers, though implementation discipline remains critical for confidence.

Electronics Supply Chain Deepening

Bac Ninh and other northern hubs are consolidating as major electronics and semiconductor ecosystems, backed by Samsung, Foxconn, Amkor, and Korean investment. However, competition for orders, engineers, and supplier positions is intensifying, increasing labor-market tightness and capability requirements for local partners.