Energy Sector Expansion and Export Infrastructure

Israel’s energy sector is expanding, with new gas contracts, export pipelines to Egypt, and increased production. Long-term contracts and infrastructure investments support revenue stability, but regional geopolitical tensions pose ongoing risks to supply and capital allocation.

EU Customs Union modernization momentum

Turkey and the EU agreed to keep working toward modernizing the 1995 Customs Union, with business pushing to expand it to services, digital and procurement. Progress could reduce friction for integrated value chains, but talks remain conditional on rule-of-law and climate alignment.

Sanctions enforcement and secondary risk

Expanded sanctions and tougher enforcement related to Russia, Iran, and technology diversion raise compliance burdens and counterparty risk. Companies face greater exposure to secondary sanctions, stricter due diligence on intermediaries, and potential payment/insurance disruptions, especially in energy, shipping, and dual-use goods.

Risks of Industrial Decline Intensify

Brazil faces heightened risks of deindustrialization as the new trade deal exposes its higher-cost manufacturing sectors to European competition. Strategic industries like automotive, pharmaceuticals, and machinery may see increased imports, reduced local investment, and job losses unless robust industrial policies are enacted.

Infrastructure and Construction Safety Risks

Major infrastructure projects face delays due to safety incidents and regulatory scrutiny, as seen in the recent halting of 14 construction projects after crane accidents. Such disruptions affect supply chains, logistics, and investor confidence in Thailand’s project delivery capacity.

Critical Minerals and Mining Ambitions

With $2.5 trillion in mineral reserves, Saudi Arabia is investing $110 billion to become a regional mining and processing hub. Strategic partnerships, especially with the US, aim to reduce supply chain dependence on China and position the Kingdom as a key player in global mineral supply chains.

EU partnership deepens market access

Vietnam–EU ties were upgraded to a comprehensive strategic partnership, reinforcing the EVFTA-driven trade surge (two-way trade about US$73.8bn in 2025) and opening new cooperation on infrastructure, cybersecurity, and supply-chain security—supporting diversification away from US/China shocks.

Biodiesel policy recalibration to B40

Indonesia delayed moving to B50 and will maintain B40 in 2026 due to funding and technical constraints. This changes palm-oil and diesel demand projections, affecting agribusiness margins, shipping flows, and price volatility across global edible oils and biofuel feedstock markets.

India-EU Trade Deal Reshapes Access

The India-EU free trade agreement, finalized in January 2026, marks India's largest and most complex FTA, opening European markets for Indian goods and services while protecting sensitive sectors. This deal enhances supply-chain resilience, boosts FDI, and positions India as a key alternative to China for global investors.

Fiscal Policy Uncertainty and Election Risks

Debates over tax cuts and fiscal sustainability dominate Japan’s political agenda ahead of elections. Uncertainty around consumption tax reforms and social security funding could affect market confidence, currency stability, and the broader investment climate for international businesses.

Supply Chain Infrastructure Modernization

Major investments in logistics, freight, and facility management are underway, with the market projected to reach USD 37.8 billion by 2031. Enhanced infrastructure and integrated services improve operational efficiency and regional connectivity for global businesses.

Resilient Political and Regulatory Environment

Vietnam’s political stability, reinforced by recent leadership consolidation, underpins its appeal as a business destination. Ongoing regulatory reforms focus on transparency, anti-corruption, and legal discipline, fostering greater predictability and confidence for international investors.

Pivot to Asian and Friendly Markets

Russia has redirected over 85% of its trade to 'friendly' countries, notably China, India, and Central Asia, following Western sanctions. This shift has deepened economic ties, diversified export portfolios, and reduced Russia’s reliance on Western markets, but also increases exposure to geopolitical shifts in Asia.

Sanctions enforcement intensifies at sea

UK and allies are escalating action against Russia’s ‘shadow fleet’, including interdictions, proposed boarding powers and broader maritime-services bans. Shipping, insurers, traders and banks face higher compliance burdens, detention risk, route disruption and potentially higher freight and war-risk premiums.

Public-Private Partnerships Drive Infrastructure

Turkey has implemented 272 PPP projects worth $215 billion since 1986, including airports and bridges. The PPP model remains central to infrastructure, with a focus on sustainability, human-centered development, and attracting international financing.

Transport infrastructure funding shift

Une loi-cadre transports vise 1,5 Md€ annuels supplémentaires pour régénérer le rail (objectif 4,5 Md€/an en 2028) et recourt davantage aux PPP. Discussions sur hausse/ indexation des tarifs et recettes autoroutières accroissent l’incertitude coûts logistiques et mobilité salariés.

Data (Use and Access) Act shift

The DUAA’s main provisions are in force, expanding ICO investigative powers and raising potential PECR fines up to £17.5m or 4% of global turnover. Firms must reassess data-governance, consent, product design, vendor risk and UK‑EU data-transfer posture.

Labor Market Tightness and Transformation

The US labor market remains tight, with low unemployment and rising wages, while technological adoption and immigration policy shifts are transforming workforce dynamics. These trends impact talent acquisition, operational costs, and long-term competitiveness for both domestic and international firms.

Rising Role in Regional Energy Supply

Indonesia is expanding its LNG and gas infrastructure, securing supply for power generation and industry. Projects like the FSRU Jawa Barat and new gas processing facilities support energy security, industrial growth, and regional supply chain resilience.

Regulatory and Political Volatility

Frequent regulatory changes—including environmental rollbacks, immigration crackdowns, and shifts in tax enforcement—are heightening operational risks for international businesses. The Trump administration’s aggressive use of executive power and unpredictable policy reversals are forcing companies to build greater flexibility and contingency into their US strategies, impacting investment timelines and compliance costs.

Infrastructure Expansion and Logistics

Major investments in logistics, such as the BR-163 highway extension (R$10.6 billion), are improving connectivity for agribusiness and exports. Persistent delays in rail projects highlight ongoing challenges, but road upgrades support supply chain efficiency and export competitiveness.

Environmental Enforcement and Permit Revocations

Indonesia has revoked permits for 28 companies, mainly in forestry, mining, and plantations, due to illegal deforestation and environmental violations. This signals stricter enforcement, affecting supply chains and compliance costs for resource-dependent industries.

EU Energy Decoupling and Bans

The EU has legislated a full ban on Russian LNG and pipeline gas imports by 2027, with plans to phase out Russian oil as well. This structural decoupling will reshape European energy markets, accelerate diversification, and impact global energy flows, with significant implications for Russian revenues and EU supply chains.

Yuan Internationalization and Financial Strategy

China is promoting the yuan’s global usage, expanding offshore liquidity hubs and payment frameworks. This financial strategy aims to reduce dollar dependence, enhance China’s influence in cross-border transactions, and provide alternatives for international businesses.

Sticky Inflation and Consumer Impact

Despite cooling headline inflation, tariffs and supply disruptions keep US inflation above the Fed’s 2% target. Households face an average tariff burden of $1,800–$2,100 annually, disproportionately affecting lower-income groups and dampening consumer sentiment, with implications for retail and investment.

Chronic Export Underperformance and Structural Barriers

Despite ambitious targets to reach $60 billion in exports, Pakistan’s export-to-GDP ratio has declined to 10.4%. Structural issues—such as weak infrastructure, regulatory uncertainty, and financial system crowding out private credit—continue to hamper export growth and international trade integration.

Supply Chain Diversification and Resilience

US and Taiwanese efforts to co-locate semiconductor production and critical supply chains in the US and third countries aim to reduce reliance on China, enhance resilience, and manage geopolitical risk. This trend is shaping investment and operational strategies.

Sanctions Enforcement and Maritime Security

France has intensified enforcement of sanctions against Russia’s shadow oil fleet, including high-profile naval seizures. This escalates geopolitical risks in maritime trade, raises insurance costs, and could provoke Russian retaliation, affecting global shipping and energy supply chains.

Foreign real estate ownership opening

New rules effective Jan. 22 allow non-Saudis to own property across most of the Kingdom via a digital platform, boosting foreign developer and investor interest. This supports regional HQ and talent attraction, while restrictions in Makkah/Madinah and licensing remain key constraints.

Fragmented Export Strategy Hinders Growth

France’s export support system remains fragmented, with exports lagging behind Germany and Italy. Calls for a unified ‘France brand’ and streamlined export promotion highlight the need for reform to boost competitiveness and international market share.

Geopolitical Tensions and Supply Chain Realignment

Geopolitical competition, especially with China, is prompting US firms to restructure supply chains, diversify sourcing, and invest in regional trade agreements. These shifts are reshaping global trade flows and increasing operational complexity for international businesses.

Strategic Role in National Security Policy

The bomb shelter mandate is part of Poland’s broader civil defense modernization in response to regional threats. This positions the sector as strategically important, attracting interest from defense-oriented investors and suppliers, but also linking it to evolving geopolitical risk.

Geopolitical Influence on US Trade Agreements

US trade negotiations with partners like India and Taiwan are increasingly shaped by strategic considerations, such as technology alliances and supply chain security. This trend links trade policy to broader geopolitical objectives, complicating deal-making and impacting global investment strategies.

US tariff uncertainty and exports

Thailand’s 2025 exports rose 12.9% (Dec +16.8%), but 2026 momentum may slow amid US tariff uncertainty (reported 19% rate) and scrutiny of transshipment via Thailand. Firms should stress-test pricing, origin compliance, and buyer commitments.

Offshore Wind and Infrastructure Investment Boom

Major offshore wind projects and infrastructure upgrades are underway, with Victoria’s 2 GW auction and Western Australia’s 4 GW feasibility licenses leading the way. These initiatives promise to diversify energy supply, create thousands of jobs, and attract billions in investment, but face regulatory and community hurdles.

Industrial zones and SCZONE expansion

The Suez Canal Economic Zone continues upgrading ports and terminals (including new container-handling capacity), positioning Egypt for nearshoring and regional distribution. Benefits include improved clearance and industrial clustering, but investors must assess land allocation terms, utility reliability, and FX-linked input costs.