France’s Opposition to EU-Mercosur Deal

France’s rejection of the EU-Mercosur trade agreement, driven by agricultural sector protests and concerns over unfair competition, highlights deep domestic resistance to further market opening. This stance risks isolating France within the EU and complicates supply chain diversification for international businesses.

Electric Vehicle Supply Chain Opportunities

The USMCA review is expected to expand Mexico’s role in electric vehicle (EV) supply chains. Mexico already supplies key EV components and seeks further investment in battery and charging infrastructure, positioning itself as a critical North American hub for electromobility.

Aerospace Industry: Growth and Supply Chain Risks

The aerospace sector remains France’s top trade surplus contributor, with €77.7 billion revenue in 2024. However, industry leaders warn that excessive taxation and global supply chain dependencies, especially for critical materials, threaten competitiveness and future investment.

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.

Russia-China Trade Faces Headwinds

Bilateral trade between Russia and China fell 6.5% in 2025, ending five years of growth. Declines in energy and automotive trade, new tariffs, and falling commodity prices have contributed, challenging long-term investment strategies and exposing vulnerabilities in Russia’s pivot to Asian markets.

IMF-Driven Privatisation and Reforms

Pakistan is selling state assets and implementing governance reforms to meet IMF bailout conditions. These measures aim to reduce fiscal deficits and attract investment, but also raise concerns about job losses, social impact, and national control over strategic sectors, affecting investment strategies and market entry.

Accelerating Trade Surplus and Export Growth

Vietnam’s trade surplus exceeded $20 billion in 2025, with exports reaching $475 billion and targeting 8% growth in 2026. Foreign-invested sectors drive this performance, while the US and China remain key partners. Trade policy reforms and FTAs underpin expansion, but rising global barriers and origin fraud risks require vigilance.

Green Growth and Infrastructure Modernization

China’s 15th Five-Year Plan emphasizes sustainable development, green manufacturing, and infrastructure upgrades. Major investments in renewable energy, digital infrastructure, and smart logistics offer opportunities for international partners, but also raise competitive and regulatory challenges.

Severe US Sanctions and Secondary Tariffs

The US has imposed a 25% tariff on any country trading with Iran, intensifying economic isolation. This measure disrupts global supply chains, increases compliance risks for multinationals, and pressures Iran’s key trading partners, notably China, India, Turkey, and the UAE.

Strategic Diversification Away from U.S. Dependence

Canada is actively seeking to double non-U.S. exports by 2035, driven by repeated U.S. tariffs and trade unpredictability. This diversification strategy is reshaping investment priorities, market access, and supply chain decisions for Canadian and international firms operating in the country.

Regional Integration and Infrastructure Investment

South Africa’s strategic position in Africa is enhanced by regional trade initiatives and infrastructure reforms, including public-private partnerships in energy and logistics. These efforts support supply chain diversification and position the country as a gateway to the continent’s growing markets.

Infrastructure and Housing Investment Surge

The federal government is investing billions in housing, transit, and green infrastructure, particularly in Quebec and major urban centers. These investments aim to address supply shortages, stimulate economic growth, and enhance Canada’s competitiveness as a destination for international capital.

Labor Market and Immigration Policy Uncertainty

US labor market tightness and evolving immigration policies continue to affect talent mobility and operational planning. Businesses face challenges in workforce recruitment, retention, and compliance, with implications for productivity and international assignments.

Infrastructure Modernization and Logistics

Egypt inaugurated its first semi-automated container terminal at Sokhna Port, a $1.8 billion project enhancing trade connectivity and logistics. Continued investment in ports and industrial zones, especially around the Suez Canal, is central to Egypt’s trade strategy.

US Tariffs and Trade Tensions

The imposition of US tariffs, particularly on automotive and manufactured goods, is straining South Africa’s export sectors. These measures threaten jobs, especially in manufacturing, and create uncertainty for investors reliant on US market access, complicating trade and investment strategies.

Rapid Expansion of Renewable Energy

Egypt signed $1.8 billion in renewable energy deals, inaugurated Africa’s largest solar project, and aims for 42% renewables by 2030. International partnerships and concessional financing are driving this transformation, positioning Egypt as a regional clean energy leader.

IMF Program Constraints and Policy Flexibility

Pakistan is negotiating with the IMF for greater fiscal flexibility in the 2026–27 budget, seeking to relax primary balance and deficit targets. Strict IMF conditions have constrained growth, prompting calls for lower taxes and tariffs to stimulate investment and exports.

US Tariffs Threaten Finnish Exports

The US announced 10% tariffs on Finnish goods, rising to 25% by June 2026 if the Greenland dispute persists. This escalation directly threatens Finnish exports, disrupts supply chains, and injects significant uncertainty into transatlantic trade relations.

Agricultural and Resource Export Diversification

Australia continues to diversify export markets and products, leveraging new trade agreements and investments in minerals, agriculture, and technology. However, exposure to external shocks—such as Chinese trade actions or global commodity price swings—remains a significant risk for international investors and supply chains.

Green Energy Transition and Overcapacity

China leads in renewable energy, installing over half the world’s new wind and solar capacity. Policy shifts, including cuts to export tax rebates for batteries and solar, aim to curb overcapacity and align with global climate goals, but also reshape trade dynamics and supply chains.

Infrastructure Investment and Northern Growth

The UK government’s commitment to £1.1bn in Northern Powerhouse Rail and broader regional development aims to boost productivity, connectivity, and economic growth. However, delivery timelines and funding gaps remain, with business impact contingent on execution and regional coordination.

Resilience Amid US Tariff Pressures

Despite 50% tariffs imposed by the US in 2024, Brazil’s exports reached a record US$348.7 billion in 2025. Diversification toward China, Argentina, and new markets offset US losses, but ongoing negotiations and potential tariff reimpositions remain a risk for exporters.

Export Diversification and Market Shifts

Korean authorities are intensifying efforts to diversify exports beyond semiconductors and autos, targeting new markets in Latin America, Africa, and advanced industries. This aims to mitigate risks from overreliance on a few sectors and address declining competitiveness in steel and machinery.

Surge in Foreign Direct Investment

India attracted $51 billion in FDI over six months and $748 billion over the past 11 years, reflecting strong global investor confidence. Government reforms, manufacturing incentives, and startup support are driving this surge, positioning India as a premier global investment destination.

Double-Digit Growth Ambitions and Risks

Vietnam targets over 10% annual GDP growth for 2026–2030, emphasizing industrial upgrading, high-tech sectors, and private sector expansion. These ambitious targets attract investment but heighten pressure on infrastructure, regulatory efficiency, and macroeconomic management.

US-South Korea Trade Tensions Escalate

The US has raised tariffs on South Korean autos, pharmaceuticals, and other goods from 15% to 25%, reversing previous concessions and straining bilateral relations. This move directly impacts South Korea’s export competitiveness, especially in autos, and adds volatility to global supply chains.

Critical Minerals Access and Infrastructure Gaps

Greenland’s mineral wealth offers major supply chain opportunities, but extraction is hindered by lack of infrastructure and skilled labor. International investors face high entry barriers, regulatory uncertainty, and potential political disruption, impacting resource strategies and industrial planning.

Energy Policy and Decarbonisation Challenges

Western Australia’s bureaucratic hurdles and integration issues threaten the state’s coal phase-out and decarbonisation goals. Organizational reform is critical to ensure policy coherence and attract investment in clean energy and industrial transformation.

Currency Volatility and Economic Disconnect

The South African rand has shown strength against the US dollar, driven by global liquidity rather than domestic fundamentals. This disconnect, coupled with weak manufacturing and low GDP growth, creates uncertainty for investors and complicates hedging and pricing strategies for international trade.

Energy Sector Under Strain

Iran’s oil exports, once above 2 million barrels per day, remain below pre-2018 levels due to sanctions and trade restrictions. The Strait of Hormuz, a critical chokepoint for global oil, faces heightened risk of disruption, threatening energy markets and shipping security.

Digital Governance Accelerates Project Delivery

India’s PRAGATI platform has resolved over 2,950 governance and infrastructure issues, expediting large-scale projects and reducing bureaucratic delays. This digital governance model improves inter-agency coordination, enhancing the ease of doing business and project execution timelines.

Regional Geopolitical Risks and Mediation Role

Egypt’s active mediation in the Gaza ceasefire and regional conflicts underscores its strategic diplomatic position. While this enhances stability prospects, ongoing tensions in neighboring countries pose risks to investor confidence, supply chain continuity, and cross-border operations.

Inflation Moderation and Currency Stability

Annual inflation fell to 10.3% in December 2025 from 23.4% a year earlier, mainly due to lower food prices. However, non-food inflation remains high, and the Egyptian pound is under pressure from debt and import needs, affecting consumer demand and business costs.

Japan’s Military Buildup Spurs Controls

Japan’s increased defense spending and security policy reforms have prompted China’s export restrictions, raising business risks in sectors linked to defense and advanced manufacturing, and signaling a more volatile regulatory environment for foreign investors.

Suez Canal Revenue Growth and Supply Chain Role

The Suez Canal Economic Zone reported a 55% revenue increase and attracted $14.2 billion in new investments. Despite past disruptions, canal operations are recovering, reaffirming Egypt’s strategic role in global supply chains and logistics, crucial for trade and multinational operations.

Societal Strains: Water, Energy, and Labor

Chronic water shortages, energy mismanagement, and rising unemployment compound Iran’s economic crisis. These systemic issues undermine productivity, increase social risk, and pose long-term challenges for sustainable business operations.