Tech controls, sanctions, and compliance tightening

Trade is increasingly treated as national security, with stronger export-control alignment and sanctions enforcement affecting dual-use technology, advanced manufacturing, and finance. Firms face higher screening burdens, third-country transshipment scrutiny, and elevated penalties for circumvention, especially in China- and Russia-linked exposure.

EU accession pathway reshaping rules

Brussels is exploring faster, phased or ‘membership‑lite’ models to anchor Ukraine in Europe by 2027, amid veto risks from Hungary. For firms, this accelerates regulatory convergence prospects, procurement localization rules, and standards alignment—yet creates uncertainty over timelines, rights, and legal implementation.

Supply-chain localisation via PLI

India’s PLI programmes have disbursed ₹28,748 crore across 14 sectors, approving 836 projects with ₹2.16 lakh crore investment, ₹8.3 lakh crore exports and 1.439 million jobs. Import substitution is material (mobile imports down ~77%), affecting sourcing, incentives, and partner selection.

Governance and tax administration overhaul

An IMF-linked tax reform plan through June 2027 targets FBR audit, IT and exemption simplification, while broader digital governance reforms expand compliance systems. Businesses should expect stronger enforcement, e-invoicing/data requirements, and changing effective tax burdens across sectors.

E-commerce law and platform regulation

Vietnam’s Electronic Commerce Law effective July 2026 will require foreign platforms to establish legal presence, strengthen livestream and affiliate oversight, and mandate at least three years of transaction data retention. Cross-border sellers face higher compliance, tax, and takedown risks.

Immigration tightening strains labour

Visa and sponsor-licence enforcement is intensifying, with policy moving to end care-worker visas by 2028 and continued restrictions on overseas recruitment. Sectors reliant on migrant labour face staffing risk, wage pressure, and service disruption, pushing automation, outsourcing, and location strategy reviews.

Maritime logistics and port resilience

With major ports like Kaohsiung exposed to coercion scenarios, businesses face higher lead-time variance, inventory buffers, and contingency routing needs. Rising regional military activity and inspections risk intermittent delays even without full conflict, pressuring just‑in‑time models.

Digital regulation and platform compliance risk

Proposed online-platform and network rules, plus high-profile cases involving major platforms, are viewed in Washington as discriminatory. Potential policy shifts could alter data governance, content delivery costs, and competition enforcement, influencing market entry strategy and compliance budgets for multinationals.

Nickel governance and reporting gaps

Regulators disclosed a major Chinese-linked nickel smelter failed to submit mandatory investment activity reports, weakening oversight of capital, production, taxes, and environmental compliance. This heightens governance and ESG due-diligence needs for counterparties in Indonesia’s nickel downstreaming ecosystem.

Power market reform execution risk

Government is unbundling Eskom and establishing an independent transmission system operator ahead of wholesale market rollout from April 2026, but timelines, market rules, wheeling and tariff design remain contested. Delays raise outage and cost risks for industry and investors.

Infrastructure, labor, and logistics fragility

US supply chains remain exposed to chokepoints across ports, rail, and trucking, with labor negotiations and capacity constraints amplifying disruption risk. Importers should diversify entry points, build buffer inventories for critical inputs, and strengthen real-time visibility and contingency routing.

AI Basic Act compliance

South Korea’s AI Basic Act introduces duties for high‑impact AI, human oversight, and labeling of AI-generated content, applying to large domestic and foreign platforms. Cross-border digital services face new governance, localization, and documentation requirements affecting product roadmaps and go‑to‑market.

War-risk insurance capacity expands

New DFC-backed war-risk reinsurance facilities (e.g., $25 million capacity supporting up to $100 million limits) are gradually improving insurability for assets and cargo in Ukraine. Better coverage can unlock FDI and reconstruction contracts, but pricing, exclusions, and geographic limits remain tight.

Réglementation agricole et contestation

Mobilisations contre la loi Duplomb et débats sur la réintroduction de pesticides (acéthamipride). Impacts: incertitude sur intrants, normes ESG et traçabilité, risques réputationnels, volatilité des coûts agroalimentaires et tensions sur accords commerciaux (ex. Mercosur).

Energy security and gas reservation

Federal plans to introduce an east-coast gas reservation from 2027—requiring LNG exporters to reserve 15–25% for domestic supply—could alter contract structures, price dynamics and feedstock certainty for manufacturers and data centres. Producers warn of arbitrage and margin impacts in winter peaks.

Policy disruption from shutdown risks

Repeated funding standoffs—recent partial shutdowns and DHS funding cliffs—delay economic data releases, create operational uncertainty for agencies affecting travel, disaster response, and cybersecurity, and inject timing risk into regulated processes and government-dependent contracts for international firms.

Labor shortages and foreign workers policy

Mobilization and restricted Palestinian labor have intensified shortages, especially in construction; courts are also shaping foreign-worker rules. Project timelines, costs, and contractor capacity remain volatile, impacting real estate, infrastructure delivery, and onsite operational planning.

Post-election policy continuity risk

Bhumjaithai’s landslide win improved near-term sentiment, but coalition bargaining and potential reshuffles raise execution risk. Businesses should expect regulatory and budget-timing uncertainty (FY2027 disbursement delays), and prioritize scenario planning for permits, procurement, and public-project pipelines.

Trade frictions and tariff exposure

Thai growth outlook remains sensitive to U.S. tariff changes and global trade volatility, with exports expected to soften after front-loaded shipments. Firms should stress-test pricing and sourcing, diversify markets, and monitor FTA negotiations and customs enforcement changes.

Red Sea routing volatility persists

Carrier reversals on Suez/Red Sea transits underscore persistent maritime insecurity and schedule unreliability. For U.S. importers and exporters, this implies longer lead times, higher inventory buffers, potential demurrage/warehousing costs, and fluctuating ocean capacity and rates.

Tech controls and AI supply chains

Evolving U.S. export controls on advanced AI chips and tools create uncertainty for Thailand’s electronics exports, data-center investment and re-export trade through regional hubs. Multinationals should review end-use/end-user controls, supplier traceability, and technology localization plans.

Natural gas exports and regional deals

Israeli gas flows to Egypt have risen with pipelines reportedly at full capacity, supporting regional power and LNG dynamics. Export reliability and pricing depend on security and contract reforms in Egypt, influencing energy-intensive industries and investment in infrastructure.

DHS shutdown and border frictions

Repeated funding standoffs risk partial DHS shutdowns, creating operational uncertainty for TSA, Coast Guard, and oversight functions even if ICE/CBP enforcement continues. Cross-border logistics and travel may face delays, staffing disruptions, and heightened scrutiny at ports of entry and airports.

Enerji merkezi ve arz güvenliği

Türkiye, gaz transit/dağıtım merkezi olma hedefini LNG altyapısı ve boru hatlarıyla destekliyor; Rus gazı, Azerbaycan ve LNG dengesi kritik. Bölgesel gerilimler fiyat oynaklığı yaratabilir. Sanayi için enerji maliyetleri, sözleşme yapıları ve kesinti riski yönetilmeli.

Economic security screening tightens

Tokyo is moving toward a “Japan CFIUS” and revising economic-security law to backstop designated overseas projects via JBIC subordinated capital, plus stricter land and sensitive-sector reviews. Multinationals should expect more approvals, disclosures, and partner diligence in critical industries.

Water infrastructure failure risk

Water and sanitation systems face an estimated R400 billion rehabilitation backlog, with many municipalities rated “poor” or “critical.” Recent Gauteng outages affected up to 10 million people after power trips. Operational disruption risks include plant shutdowns, hygiene, and industrial downtime.

BoJ tightening and funding costs

Markets increasingly expect the BoJ to move from 0.75% toward ~1% by mid-2026, balancing inflation, wages and yen weakness. Higher domestic rates raise corporate funding costs, reprice real estate and infrastructure finance, and alter cross-border carry-trade dynamics.

US trade deal and tariffs

Vietnam is negotiating a “reciprocal” trade agreement with the US as its 2025 surplus hit about US$133.8bn, raising tariff and transshipment scrutiny. Outcomes will shape market access, rules of origin compliance, and investor decisions on Vietnam-based export platforms.

Trade–security linkage in nuclear submarines

Tariff friction is delaying alliance follow-on talks on nuclear-powered submarines, enrichment, and spent-fuel reprocessing. Because trade and security are being negotiated in parallel, businesses face headline risk around dual-use controls, licensing timelines, and defense-adjacent supply chains.

Trade balance strain with neighbors

Pakistan’s trade deficit with nine neighbors widened 44.4% to $7.68bn in H1 FY26, driven by import growth (notably China) and weaker exports. This pressures FX demand and can prompt import management measures affecting raw materials and intermediate goods availability.

Trade–Security Linkage Uncertainty

Tariff disputes are delaying broader U.S.–Korea security cooperation discussions, including nuclear-powered submarines and expanded nuclear fuel-cycle consultations. Linkage risk increases the chance that commercial negotiations spill into defense and energy projects, complicating long-horizon investment decisions.

Critical minerals bloc and rare-earth strategy

South Korea chairs the US-led FORGE initiative while also building a China hotline and joint committee to stabilize rare-earth imports. Policy includes easing public-sector overseas resource limits and funding mine access, reshaping sourcing, compliance, and procurement for EVs, chips, and defense.

Treasury market liquidity drains

Large Treasury settlements and heavy auction calendars can pull cash onto dealer balance sheets, reducing liquidity elsewhere. Tightened repo and margin dynamics raise volatility across risk assets, complicate collateral management, and increase the chance of disruptive funding squeezes for corporates.

FCA crypto regime tightening

FCA’s CP26/4 and Consumer Duty guidance pull crypto trading, custody and safeguarding into mainstream conduct standards, with an authorisation gateway due Sept 2026–Feb 2027 and full regime expected Oct 2027—reshaping UK market entry and product design.

EU-China EV trade rebalancing

EU’s new ‘price undertaking’ mechanism is reshaping China-made EV flows: VW’s Cupra Tavascan won a tariff waiver by accepting minimum pricing, quotas and EU battery-investment commitments. This creates a template for others, altering sourcing, margins and trade friction.

Tax uncertainty and retrospective levies

Court-backed ‘super tax’ recoveries (around Rs310bn) and concerns over retroactive application undermine predictability. Firms face higher effective tax burdens, potential disputes and arbitration risk. This dampens FDI appetite and encourages short-horizon, defensive capital allocation.