Tourism Access Diversification Improves

Solomon Airlines’ new twice-weekly Brisbane–Santo service and Qantas’ addition of 35,500 seats on Brisbane–Port Vila in 2026 improve visitor access beyond cruise arrivals. Stronger air connectivity supports destination resilience, multi-island packaging, workforce mobility, and recovery in hospitality and tourism supply chains.

Customs Reform Raises Compliance Costs

New customs rules and digital documentation requirements are increasing burdens on importers and brokers. Traders report port saturation, system failures and heavier paperwork, while U.S. officials argue stricter liability, higher sanctions and excessive transaction data demands may hinder trade facilitation and raise clearance risks.

Shadow Oil Trade Expansion

Iran continues exporting roughly 1.5-2.8 million barrels per day through dark-fleet shipping, ship-to-ship transfers and opaque intermediaries, largely to China. This sustains state revenues but heightens exposure to sanctions enforcement, shipping fraud, and reputational risk for traders and insurers.

Energy Shortages Constrain Industry

Iran’s domestic energy system is structurally fragile despite vast reserves, with gas shortages, power cuts, and attacks on South Pars and Asaluyeh threatening electricity and feedstock supply. Energy-intensive manufacturers face rising interruption risk, lower utilization, and greater uncertainty over export-oriented petrochemical output.

Foreign investment remains resilient

Costa Rica attracted $5.12 billion in FDI in 2025, above $5 billion for a second year, with manufacturing receiving $3.9 billion. Reinvestment rose 26%, but new capital fell 18%, signaling confidence in incumbents yet more selective greenfield expansion.

Highway Insecurity and Cargo Disruption

Security on freight corridors is a direct supply-chain risk, highlighted by nationwide trucker blockades and persistent cargo theft. Officially, 6,263 cargo-robbery investigations were opened in 2025, while industry estimates exceed 16,000 incidents yearly, raising insurance costs, route complexity, inventory buffers and delivery uncertainty for domestic and cross-border operations.

Selective Tariff Liberalization Strategy

India is reducing duties on key industrial inputs, EV battery materials, electronics components and life-saving medicines while preserving high protection in sensitive sectors. This mixed regime supports domestic manufacturing, but requires foreign firms to navigate sector-specific tariff advantages and restrictions.

Resilient yet shifting tech investment

Israel’s technology sector continues attracting foreign capital, with roughly $3 billion raised in the first quarter and new R&D tax credits approved. However, investors increasingly seek overseas structures, creating longer-term risks around intellectual property, tax base erosion and operational relocation.

Energy Transition Industrial Upside

Renewables expansion is creating downstream opportunities in batteries, green hydrogen, electric vehicles and grid equipment. Officials cite 80GW of new generation planned over five years and R440 billion for transmission, improving prospects for manufacturers aligned with decarbonisation supply chains.

Manufacturing Faces Export Squeeze

Indonesia’s manufacturing PMI fell sharply to 50.1 in March from 53.8 in February as export orders softened, output contracted, and supply disruptions raised costs. International firms should expect pressure on margins, hiring, production schedules, and supplier reliability in trade-exposed sectors.

Energy Tariffs And Circular Debt

Pakistan is under IMF pressure to ensure cost-recovery tariffs, avoid broad subsidies, and reduce circular debt through power-sector reform. Rising electricity, gas, and fuel charges will lift operating costs for manufacturers, exporters, and logistics providers, especially energy-intensive industries.

Demographic Decline Deepens Shortages

Taiwan’s labor outlook is worsening as fertility fell to 0.695 last year, with February births at a record-low 6,523 and population declining for 26 straight months. Businesses should expect tighter labor supply, older workforces, and rising wage and productivity pressures.

Smart Meter Delays Slow Flexibility

Germany’s slow smart meter rollout is constraining grid digitalization essential for integrating solar, storage, heat pumps, and EV charging. By end-2025, only 5.5% of electricity connections had smart meters, limiting flexible tariffs, raising system costs, and hindering efficient energy management for business sites.

Energy Import Shock Exposure

Japan remains acutely vulnerable to Middle East disruption, sourcing roughly 90-95% of crude oil imports from the region. Reserve releases, fuel subsidies and supply stress are raising costs for transport, chemicals, manufacturing and trade-dependent sectors across the economy.

Tax Incentives Support Reshoring

The new federal tax law makes 100% bonus depreciation and R&D expensing permanent, strengthening incentives for domestic capital expenditure and innovation. For investors and manufacturers, this improves after-tax project economics and supports US-based expansion, automation, and selective reshoring strategies.

Capacity Expansion and Congestion

Antwerp-Bruges is pursuing roughly $6 billion of expansion to add 7.1 million TEUs by 2032 after market share slipped to 29.3%. Until upgrades materialise, congestion, infrastructure strain, and modal bottlenecks may continue to weigh on routing reliability and logistics costs.

Regional Trade Frictions in SACU

Restrictions by Namibia, Botswana and Mozambique on South African farm exports are disrupting regional food supply chains despite SACU and AfCFTA commitments. The measures raise policy uncertainty for agribusiness, cold-chain investment and cross-border distribution models in Southern Africa.

Foreign investment gap persists

Saudi Arabia still needs substantially more foreign direct investment to fund diversification ambitions, yet inflows remain below expectations. Estimates cited annual needs near $100 billion, versus around $30 billion achieved in 2024, implying continued competition for capital and selective dealmaking opportunities.

Inflation and Input Costs Persist

Tariff pass-through is falling mainly on US firms and consumers, with foreign exporters absorbing only about 5% of costs. Elevated import prices, energy disruptions, and policy uncertainty are pressuring margins, pricing, and demand planning across consumer goods and industrial sectors.

Domestic Gas Intervention Risk

Canberra may curb LNG exports to protect east-coast supply after the ACCC projected Q3 demand of 499 petajoules against 488 petajoules of supply. Potential export controls, reservation measures and pricing distortions create uncertainty for energy-intensive industry and gas-linked exporters.

Sanctions Relief Negotiation Volatility

Ceasefire and nuclear talks have reopened debate on phased sanctions relief, frozen assets and limited waivers, but policy remains highly unstable. Companies face abrupt compliance, payment and contract risks as U.S., Iranian and allied positions remain far apart.

Egypt as Transit Hub

Cairo is actively repositioning Egypt as a Europe-Gulf logistics bridge through the Damietta-Trieste-Safaga corridor and temporary customs exemptions at key ports. The framework can reduce delays and logistics costs, benefiting time-sensitive sectors and supply-chain diversification strategies.

Russia Sanctions Maritime Enforcement

London has authorized boarding and detention of sanctioned Russian shadow-fleet tankers in British waters. With more than 500 vessels sanctioned and roughly 75% of Russian crude using such ships, shipping, compliance, insurance, and routing risks are rising materially.

State-Directed Supply Chain Security

Beijing is formalizing supply chains as a national security tool, including early-warning mechanisms and potential retaliation against entities seen as disrupting Chinese supply chains. This raises operational risk for multinationals through possible import-export restrictions, investment curbs, and tighter scrutiny of procurement, due diligence, and sourcing decisions.

Electronics and Semiconductor Upswing

Thailand’s export strength is increasingly concentrated in electronics, with February electronics exports up 56.8% year on year; ICs and semiconductors rose 6.9% and hard disk drives 19.7%. This supports manufacturing investment, though concentration raises exposure to global tech-cycle swings.

Property and Debt Overhang

The property downturn, weak land-sale revenues, and mounting local government liabilities continue to drag on growth. Local governments issued about 3.1 trillion yuan of bonds in Q1, including major refinancing, underscoring fiscal strain that may affect infrastructure spending, payment cycles, financial stability, and regional business conditions.

Severe Macroeconomic Instability

Inflation is running near 50% officially, with some warnings of far higher wartime acceleration, while the rial has sharply depreciated. This undermines pricing, wage planning, procurement and demand forecasting, and raises counterparty, payroll and working-capital risks for any business exposure.

Fiscal stimulus versus reform uncertainty

Berlin’s large infrastructure, climate and defense funds could support domestic demand, but implementation risks are rising. Critics say portions of the €500 billion package are covering regular spending, while business groups warn that without tax, labor and pension reforms investment benefits may fade.

Buy Canadian Industrial Policy

Federal and provincial Buy Canadian procurement measures are reshaping market access and supplier strategies, while drawing U.S. criticism before CUSMA talks. The policy supports domestic manufacturing, defence and construction, but may increase compliance burdens and bilateral friction.

Shadow Trade Raises Compliance Risk

Russian exporters are increasingly using opaque intermediaries, alternative paperwork and non-Western payment routes to move sanctioned commodities. Reported LNG discounts of up to 40% illustrate how aggressive circumvention tactics heighten legal, reputational and due-diligence risks for buyers, traders and insurers.

North American Trade Pact Uncertainty

The USMCA review is slipping beyond the July 1 checkpoint, with disputes over autos, steel, aluminum and Chinese investment raising the risk of prolonged uncertainty, delayed capital spending, and operational disruption across tightly integrated North American supply chains.

Power Grid Expansion Advances

Brazil’s second 2026 transmission auction will offer nine lots with estimated investment of R$11.3 billion across 13 states. Grid expansion supports industrial reliability and future capacity, while the Brazil-Colombia interconnection adds strategic infrastructure opportunities for long-term investors.

Petrochemical Input Vulnerability

South Korea imports about 45% of its naphtha, historically 77% from the Middle East, exposing chemicals and chip supply chains to acute feedstock risk. Emergency export bans, plant shutdowns, force majeure notices and temporary Russian sourcing underscore fragility for manufacturers and investors.

Carbon Costs Pressure Heavy Industry

EU emissions trading reforms leave German industry facing carbon prices around €70 per tonne, after peaks near €100, while free allocations continue to decline. Chemicals and other energy-intensive sectors warn of weaker competitiveness, relocation pressure, and harder decarbonization investment decisions.

CUSMA Review and Tariff Uncertainty

Canada faces elevated trade and investment uncertainty as the July 1 CUSMA review is expected to run long, with U.S. demands on dairy, procurement, digital rules and metals. Annual reviews or tougher rules of origin could delay capital deployment.

Export Competitiveness Under Pressure

Merchandise exports weakened while imports rose, widening the trade deficit to about $25 billion in July-February. Higher logistics, energy, and financing costs are squeezing textiles and other export sectors, reducing competitiveness and complicating sourcing, contract pricing, and capacity-utilization decisions for foreign partners.