Australia–China Trade Tensions Escalate

Rising trade friction with China, including potential tariffs on steel and ongoing disputes over agricultural exports, threatens key sectors. Policy responses risk retaliation, supply chain disruptions, and market volatility, underscoring the need for diversification and robust risk management for international businesses.

Infrastructure Expansion and Social Conflict

Major infrastructure projects, such as the Santos-Guarujá tunnel and Amazon waterways, are advancing, attracting foreign investment and improving logistics. However, these projects face social resistance, especially from Indigenous groups, due to environmental and land rights concerns.

EU-US Trade Deal at Risk

The tariff dispute jeopardizes the recently negotiated EU-US trade agreement. Suspension or collapse of the deal would undermine market access, investment flows, and regulatory cooperation, with broad negative implications for Finnish and European businesses.

Retaliatory Tariffs and Regulatory Risks

The EU is considering €93 billion in retaliatory tariffs and regulatory measures targeting US goods and services. Finnish firms operating in or exporting to the US could face new barriers, compliance costs, and restricted market opportunities.

Trade Performance and Export Growth

Egypt’s non-oil exports rose 17% in 2025, narrowing the trade deficit and boosting foreign exchange. The government targets $145 billion in annual exports, leveraging trade agreements with the EU, US, Africa, and Arab states to diversify markets and support industrial growth.

Energy Geopolitics and Trade Deals

U.S. trade negotiations increasingly bundle energy commitments and geopolitical conditions, as seen in tariff relief tied to partners’ changes in Russian oil purchases. This links market access to energy sourcing, complicating procurement strategies and increasing political risk in long-term offtake contracts.

Tech Sector Investment Amid Uncertainty

Despite geopolitical turmoil, Israel’s government and private sector continue to invest heavily in technology, with initiatives like the Yozma Fund and major projects such as Nvidia’s new campus. These investments sustain Israel’s global tech leadership but are vulnerable to regional instability and global capital flow shifts.

Supply Chain Dominance and China’s Role

China’s deep integration in Indonesia’s nickel mining and processing sectors has entrenched its dominance in the EV battery supply chain. This reliance on Chinese capital and technology exposes Indonesia to external shocks, environmental concerns, and limited leverage in global value chains.

Strategic Trade Diversification Amid US Tariffs

India has rapidly signed FTAs with the UK, New Zealand, Oman, and the EU, reducing dependence on the US market amid high American tariffs. This diversification hedges against global trade fragmentation and enhances India’s leverage in global economic negotiations.

Critical Minerals Supply Chain Security

Japan is urgently strengthening critical mineral supply chains through alliances with the UK and other partners, responding to China's export controls and global supply shocks. These efforts are vital for sustaining advanced manufacturing, energy, and defense sectors, directly impacting supply chain resilience and investment strategies.

Massive Public Investment Program 2026

Turkey’s 2026 Investment Program allocates 1.92 trillion TRY to 13,887 projects, prioritizing infrastructure, earthquake resilience, energy, and logistics. This large-scale public spending aims to boost economic growth and supply chain capacity, but also tests fiscal discipline.

US-China Economic Competition Intensifies

US-China relations remain a dominant force in global economics, with ongoing tensions over technology, trade, and security. These dynamics influence market access, regulatory risk, and supply chain resilience for international businesses operating in or sourcing from both countries.

Stagnation in Russian Oil and LNG Output

Despite sanctions and attacks, Russia’s oil production only fell 0.8% in 2024, but LNG output missed targets and long-term expansion plans are delayed. Sanctions on technology and finance hinder energy sector growth, affecting future export capacity and investment opportunities.

Shadow Economy and Sanctions Evasion

Iran’s reliance on shadow fleets, barter trade, and crypto channels to bypass sanctions has grown. US Treasury actions against crypto exchanges and shipping networks highlight enforcement risks for counterparties and the need for enhanced due diligence in all Iran-linked transactions.

Regulatory Uncertainty and Investment Delays

Ongoing legal challenges to US tariffs and Korea’s legislative process for outbound investment funds delay the execution of major bilateral trade and investment agreements. This regulatory uncertainty complicates strategic planning for multinational firms operating in or with South Korea.

Russia-China Trade Faces Headwinds

Bilateral trade between Russia and China dropped 6.5% in 2025, ending a five-year growth streak. Lower oil prices, reduced Chinese demand, and Russian import tariffs on cars contributed. This signals increased vulnerability to commodity price swings and policy shifts for cross-border ventures.

Energy Transition and Power Security

Eskom’s reforms and renewable energy expansion have reduced load shedding, but high electricity costs and grid vulnerabilities persist. Recent tariff relief for energy-intensive industries aims to prevent deindustrialization, yet long-term competitiveness depends on sustainable pricing and infrastructure modernization.

Critical Minerals and Re-shoring Push

The U.S. is strengthening industrial policy around strategic inputs, including initiatives to secure critical minerals and expand domestic capacity. This supports investment in upstream and processing projects but raises permitting, local-content, and ESG scrutiny that can delay timelines and alter supplier selection.

Sweeping US Sanctions and Oil Restrictions

The US has intensified sanctions on Iran, targeting oil exports and shipping, with new measures including a 25% tariff on countries trading with Iran. These actions have severely restricted Iran's access to global markets, undermined its fiscal stability, and forced key partners like India to reconsider strategic investments such as the Chabahar port.

Rising Regional Geopolitical Influence

Saudi Arabia is recalibrating its foreign policy, forming new defense alliances with Egypt, Turkey, and Pakistan, and asserting itself in Yemen and the Horn of Africa. This shift increases regional autonomy but also introduces new risks and uncertainties for international business operations.

Green Energy and Ammonia Investments Accelerate

South Korea is investing heavily in green ammonia and renewable energy, aiming to retrofit 24 coal plants for ammonia co-firing and expand clean energy exports. These initiatives support decarbonization goals and position Korea as a leader in Asia’s green transition.

Dollar, Rates, and Financing Conditions

Shifts in U.S. monetary expectations and risk-off episodes tied to trade actions can strengthen the dollar and tighten financing. This affects import costs, commodity pricing, emerging-market demand, and the viability of capex-heavy supply-chain relocations, especially for leveraged manufacturers and traders.

Massive Reconstruction and Investment Plans

Western allies, led by the EU and US, are finalizing a 10-year, $800 billion recovery plan for Ukraine, focusing on infrastructure, energy, and technology. The plan’s success depends on achieving peace and security guarantees, with private sector involvement critical for long-term economic recovery.

Infrastructure and Resource Constraints

Taiwan faces challenges in scaling advanced manufacturing due to land, water, and power limitations. These constraints affect expansion plans for high-tech industries and may drive further overseas investment, influencing long-term industrial competitiveness.

Infrastructure Safety and Operational Risks

Recent fatal crane accidents in major infrastructure projects highlight persistent safety and regulatory enforcement issues. Such incidents can delay project delivery, raise insurance and compliance costs, and affect Thailand’s reputation as a reliable investment destination.

Geopolitical Shifts and Regional Integration

Turkey's strategic location is increasingly pivotal amid shifting global alliances, conflicts in Ukraine and the Middle East, and EU enlargement debates. Ankara's foreign policy emphasizes regional cooperation, energy corridors, and mediation roles, affecting supply chains and cross-border investments.

Strategic Autonomy in Defense and Technology

France is accelerating defense spending and urging local industry to modernize, but also warns of shifting procurement to European suppliers if domestic firms lag. This push for strategic autonomy impacts supply chains, procurement strategies, and cross-border industrial cooperation.

Western Sanctions Erode Oil Revenues

Western sanctions and price caps have driven Russia's oil and gas revenues to a five-year low, with a 24% annual decline in 2025. This has severely impacted Russia’s fiscal stability, increasing budget deficits and forcing tax hikes, with direct implications for global energy markets and business operations.

Critical Minerals And Semiconductor Supply Chains

Vietnam is deepening partnerships with the EU and other global actors to develop its rare earths, tungsten, and semiconductor sectors. These efforts aim to diversify supply chains, reduce dependence on China, and position Vietnam as a key node in global technology manufacturing.

Major Infrastructure and Logistics Expansion

Record infrastructure investment, especially in transport and logistics, is transforming states like Uttar Pradesh and Madhya Pradesh into key hubs. Platforms like PRAGATI enable efficient project execution, reducing bottlenecks and enhancing India’s competitiveness as a manufacturing and export base.

Export-Led Growth and Trade Policy Shifts

Ambitious targets to double exports to $60 billion hinge on tax reforms, trade facilitation, and sectoral diversification. However, high energy costs, regulatory bottlenecks, and financial system distortions still hinder export competitiveness, making sustained reform execution critical for international trade expansion.

Domestic Industry Concerns and Political Debate

The scale of outbound investment and supply chain relocation has sparked debate in Taiwan over potential ‘hollowing out’ of its chip industry and strategic assets. Political opposition and public scrutiny focus on balancing national interests with global integration.

National Privatization Strategy Expands PPPs

The new National Privatization Strategy aims to sign over 220 public-private partnership contracts and mobilize $64 billion in private investment by 2030. This initiative opens infrastructure, health, education, and logistics to foreign investors, enhancing competitiveness and operational efficiency.

Renewable Energy Policy Uncertainty

Despite record renewable capacity additions, delays in France’s energy roadmap and stalled projects undermine investor confidence and threaten jobs. Continued dependence on imported fossil fuels (70% of energy needs) exposes France to geopolitical shocks and energy price volatility.

Strategic Role in Global Supply Chains

Indonesia’s position as a top beneficiary of global supply chain shifts—especially as U.S.-China trade tensions persist—has led to a 34% increase in U.S. imports from Indonesia in 2025. This strengthens Indonesia’s role as a preferred sourcing hub, but also exposes it to external demand and regulatory volatility.

German Investment Shift: US to China

German direct investment in the US fell by 45% in 2025, while investment in China surged to over €7 billion. Uncertainty from US trade policy and pressure from Chinese authorities are prompting German firms to localize production and supply chains in China, affecting global business operations.