Tech exports: recovery with churn

Tech remains a core export engine (about 57% of exports; 17% of GDP), with 2025 funding rising to roughly $15.6bn. Yet job seekers doubled to 16,300 and talent outflows persist, affecting hiring, delivery risk, and investment underwriting for R&D-heavy operations.

Exchange rate and import management

Although inflation has moderated, Pakistan’s external position remains sensitive. Any shock could trigger rupee volatility and administrative import management. This impacts sourcing lead times, inventory planning, and the ability to access inputs, especially for export manufacturers.

Trade controls and dual-use scrutiny

EU anti-circumvention measures increasingly target third-country re-export routes (e.g., machinery, communications equipment) and add more Russian banks and entities. Firms exporting industrial equipment, electronics, or software face stricter end‑use checks, documentation burdens, and elevated penalties for diversion.

Electricity tariff overhaul and costs

Proposed power tariff restructuring aims to cut cross-subsidies (~Rs102bn) and contain circular debt, potentially lifting inflation by ~1.1pp while reducing industrial tariffs 13–15%. Higher fixed charges and net-metering changes create cost volatility for factories, data centers, and retailers.

Rare earths and critical minerals

China’s dominance (~70% mining, ~90% processing) and tighter export licensing keep rare earths a geopolitical lever. Buyers in EVs, wind, defense face supply disruption and price volatility, accelerating diversification, stockpiling, and alternative pricing benchmarks outside China.

Remittances resilience and fragility

Remittances rose to $3.46bn in Jan 2026 (+15.4% YoY) and $23.2bn in 7MFY26 (+11.3%). However, Middle East conflict scenarios could cut inflows 10–15% (≈$3bn), pressuring the rupee, consumption and import demand forecasting.

Hybrid threats and cyber spillovers

Russian-linked sabotage, cyber operations and GPS jamming across Europe are intensifying, affecting transport, ports, aviation and critical infrastructure. Companies face higher operational resilience costs, stricter security expectations, and greater business interruption risk, including via SME supply-chain entry points.

Anti-smuggling and steel enforcement

Authorities are canceling and suspending hundreds of firms tied to irregular steel import/maquila programs under “Operación Limpieza,” alongside broader anti-contraband actions. Greater scrutiny of origin and valuation can disrupt supply for metals users and heighten due-diligence requirements for importers.

Defense buildup and dual-use compliance

Faster defense spending toward ~2% of GDP and deeper aerospace/space programs increase procurement opportunities but tighten export-control, ITAR-style and dual-use compliance across primes and suppliers, especially those with China-linked inputs or sales.

U.S. tariffs and legal whiplash

U.S. courts curtailed emergency-power tariffs, but Washington is rebuilding tariff tools (Section 122/232/301) while keeping steel, aluminum, autos and lumber duties. Canadian firms must model rapid duty changes, refunds, pricing resets, and cross-border compliance costs.

Fiscal deadlock and tax volatility

France’s 2026 budget passed via Article 49.3 after ~25,000 amendments, with a projected 5.4% GDP deficit. Corporate surtaxes and production-tax uncertainty raise planning risk for multinationals, affecting pricing, capex timing, and location decisions amid 2027 election volatility.

Semiconductor reshoring pressure and geopolitics

Washington is pushing Taiwan to expand U.S. chip capacity (discussions of shifting 40% were rejected as ‘impossible’), while Taiwan pledges up to US$250B investment. This drives multi‑site manufacturing strategies, tech‑transfer sensitivities, and customer qualification across fabs, packaging, and equipment.

IMF program, refinancing pressure

Pakistan’s near-term macro path hinges on the IMF EFF/RSF reviews and continued rollovers from China, Saudi and UAE. Falling reserves (about $15.5bn) and a $1.3bn Eurobond due April 2026 elevate convertibility, payment and counterparty risk.

Middle East conflict energy shock

Escalating regional conflict increases Turkey’s inflation and current-account risk via energy imports. Analysts estimate a 10% oil-price rise could add ~1.1–1.2pp to inflation and widen the external gap, pressuring transport, chemicals, plastics, and other energy‑intensive supply chains.

Defense Exports and Tech Partnerships

Korea is deepening defense industrial ties with partners like Poland and Saudi Arabia, including R&D MOUs and localization ambitions. Defense exports support manufacturing and services, but bring compliance obligations, technology-transfer controls, and geopolitical sensitivity tied to Russia and regional conflicts.

Mining export capacity and critical minerals

South Africa’s dominance in manganese and other minerals is colliding with logistics constraints; planned Ngqura terminal capacity expansion to 16mt/year and corridor upgrades could unlock export growth. Investors should track permitting, environmental commitments, and rail reliability improvements.

Immigration reform and talent availability

Government proposals to extend settlement (ILR) from 5 to 10 years—and longer for benefit use—are triggering legal challenges and employer concern, while a parallel review targets talent routes. Uncertainty may raise sponsorship costs and complicate hiring for health, tech and logistics firms.

De minimis and import enforcement

Washington is reshaping import enforcement, including curbs or suspension of duty‑free de minimis treatment and tighter screening for forced‑labor and evasion. Cross‑border e‑commerce and consumer goods supply chains should expect longer clearance times, higher landed costs, and expanded documentation demands.

China Exposure and Derisking

Germany’s trade with China rebounded to ~€251bn in 2025, but with a large deficit and rising policy risk. Firms face tighter scrutiny, rare-earth export curbs, and tougher EU trade defenses, reshaping sourcing, market access, and investment decisions.

Expanded defense exports, rearmament

Japan is doubling defense spending to 2% of GDP and moving to relax limits on defense equipment exports, including potentially lethal items and third-country sales of jointly developed systems. This opens opportunities in aerospace, components, cyber, and dual-use—but raises regulatory and reputational considerations.

BoE rate path uncertainty

A knife-edge Bank of England hold and markets pricing near-term cuts create volatility for sterling, funding costs and credit conditions. Sticky services inflation alongside weak growth raises risks of sudden repricing, affecting investment timing, hedging and demand forecasts.

Nuclear power expansion funding squeeze

France’s nuclear strategy faces financing stress as renewable oversupply forces reactor modulation (33 TWh in 2025) and depresses prices, hitting EDF revenues. Higher maintenance and €1.4bn turbine upgrades complicate funding for new reactors, affecting energy-intensive industries’ price outlook.

Sanctions escalation and compliance burden

Fresh Iran measures target shadow-fleet vessels and UAE/Türkiye-linked networks, expanding secondary-sanctions exposure for shippers, traders, banks, and insurers. Expect heightened screening on maritime AIS anomalies, beneficial ownership, and petrochemical trade flows, raising transaction friction and delays.

Labour shortages and mobilisation pressure

Mobilisation and displacement continue to tighten labour markets, raising wage pressure and reducing skilled workforce availability in manufacturing, construction, and logistics. Companies face productivity constraints, higher training costs, and execution risk for reconstruction projects and long-duration contracts.

Ports and maritime security exposure

Strategic gateways such as Haifa face heightened missile/drone risk and operational contingency measures. Even when terminals remain open, security protocols, rerouting, and insurer requirements can slow throughput, complicate just‑in‑time inventory, and raise demurrage and storage costs.

Technology dependence and supply shortages

Despite import-substitution rhetoric, Russia remains dependent on imported high-tech inputs; reports cite China supplying ~90% of microchips, and low self-sufficiency in sectors like high-speed rail (15%) and shipbuilding/energy (30%). This raises operational fragility for industrial projects and suppliers.

AUKUS industrial build-out

AUKUS commitments are translating into massive domestic defense infrastructure and procurement, including an estimated A$30bn submarine yard at Osborne. This reshapes industrial capacity, workforce demand, and supply chains for steel, specialized components, cyber, and sovereign capability requirements.

Oil exports to China dependence

Iran’s oil revenue increasingly relies on China, which buys over 80% of Iran’s shipped crude, often via opaque logistics. Crackdowns or shipping disruption at Kharg Island/Hormuz can abruptly reduce supply, shift price discounts, and create volatility for Asian refiners and freight markets.

Inflation, FX and financing conditions

Inflation accelerated to about 3.35% y/y in February, with oil-price shocks raising downside risks for the dong and interest rates. Vietnam’s central bank signals flexible management. Importers and leveraged investors should tighten FX hedging, working-capital planning, and pricing clauses.

Yaptırım uyumu ve ikincil riskler

ABD’nin İran ‘gölge filo’ ve tedarik ağlarına yönelik son yaptırımlarında Türkiye bağlantılı kişi/şirketler de anıldı. Bu, bankacılık, denizcilik, kimya ve makine ticaretinde KYC, ödeme kanalları ve yeniden ihracat kontrollerini sıkılaştırma ihtiyacını büyütüyor.

Internet shutdowns and cyber risk

Iran’s periodic internet restrictions and heightened cyber activity during crises disrupt communications, cloud access, payments, and remote operations. Firms reliant on digital workflows face downtime, data-security exposure, and continuity planning needs, including alternative connectivity and localization measures.

US tariffs reshape export outlook

US tariff policy has shifted to a temporary 10% global import surcharge (150 days from Feb 24, 2026), while sectoral tariffs persist (e.g., metals 50%). This creates near-term pricing relief but high uncertainty for exporters and supply contracts.

Domestic demand rebalancing push

Beijing’s 2026 agenda prioritizes stimulating consumption and services, citing retail sales growth of 3.7% in 2025 and targeting final consumption near 60% of GDP over 2026–30. Opportunities rise in tourism, entertainment and services, but policy-driven competition intensifies.

Labor shortages and mobilization pressures

Mobilization, displacement, and emigration shrink labor supply, pushing wage inflation and raising execution risk for labor-intensive projects. Companies rely more on women, veterans, reskilling programs, and automation; staffing volatility affects timelines, safety, and project pricing.

Expanding Section 232 industrial tariffs

Sector tariffs imposed on national-security grounds—steel, aluminum, autos, copper, lumber and more—remain intact and may broaden. This raises landed costs for manufacturers, affects supplier choice, and can trigger retaliatory measures and localization pressures across allied markets.

Dual-use export controls expansion

Beijing is widening dual-use controls, including blacklisting foreign defense-linked entities (e.g., Japanese aerospace and heavy industry). International firms must map China-origin inputs and re-export exposure, as licensing delays and end-use verification can disrupt aerospace, electronics and machinery supply chains.