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.

Intensified Technology Export Controls

China is strengthening legal frameworks and oversight on technology exports, particularly in AI, semiconductors, and rare metals. Tighter reviews and restrictions on foreign acquisitions and technology transfers reflect Beijing’s focus on national security and self-reliance, impacting cross-border investment and innovation flows.

Labor Market Dynamics and Immigration Policy

The US labor market shows resilience but faces cooling trends, wage pressures, and uneven household financial health. Shifts in immigration policy and demographic changes affect workforce availability, cost structures, and long-term business planning for multinational firms.

Tariff Policy Drives Supply Chain Shifts

The US maintains an aggressive tariff regime, especially against China, driving sourcing shifts to Southeast Asia and legal challenges to tariff authority. Businesses must adapt to a new baseline of higher costs, regulatory complexity, and supply chain reconfiguration.

Agribusiness Drives Export Growth

Agribusiness accounted for 22% of Brazil’s exports in 2025, with coffee, soy, corn, and meat leading. The sector grew 7.1%, but faces volatility from global commodity prices, sanitary barriers, and sustainability demands, especially in EU and Asian markets.

Infrastructure Reform And Connectivity

Ongoing infrastructure reforms focus on improving cross-border connectivity and logistics, with regulatory updates in rail and transport. Enhanced infrastructure may support supply chain efficiency, but regulatory complexity and funding constraints could delay business benefits.

Sectoral Divergence: Defense Gains, Cyclicals Suffer

While export-driven sectors like automotive and luxury goods face losses, defense companies such as Rheinmetall and Renk have seen stock gains amid heightened geopolitical tensions. This divergence underscores shifting investor sentiment and the growing importance of security-related industries in Germany’s economic landscape.

Escalating US-China Trade Tensions

US-China trade has contracted sharply, with US imports from China down 28% and exports down 38% in 2025. Tariffs and retaliatory measures have shifted supply chains toward Southeast Asia, increasing costs and uncertainty for global businesses.

Mining and Industrial Diversification Push

Strategic partnerships and investments are transforming Saudi Arabia into a regional mining and industrial hub. New aluminum complexes and mining service giants are being established, supporting Vision 2030’s goal to reduce oil dependency and localize high-value supply chains, with substantial workforce development initiatives.

Regional Alliances and Competitive Dynamics

China’s actions are testing US support for Japan and may influence broader regional alliances, including South Korea and the Quad. The evolving landscape could reshape trade patterns, investment strategies, and the competitive environment for international businesses in Asia.

US Trade Scrutiny and Visa Restrictions

The US has suspended immigrant visa processing for Thai nationals and imposed stricter origin verification on Thai exports. These measures heighten compliance risks, potentially disrupt trade flows, and complicate market access for Thai businesses in the US.

Geopolitical Tensions and Supply Chain Risks

Turkey’s proximity to regional conflicts, especially the Russia–Ukraine war, and its active role in Black Sea security, heighten supply chain risks. Maritime disruptions and shifting alliances could impact logistics, trade routes, and business continuity for global operators.

Strategic Pivot to Asian and Global Markets

Canada is actively seeking to double non-U.S. exports by 2035, leveraging new agreements with China and expanding ties with Asia-Pacific and plurilateral blocs. This pivot aims to reduce vulnerability to U.S. trade policy shocks and foster new investment and technology partnerships, but increases exposure to geopolitical risks.

Energy Security and Transition Challenges

Vietnam’s drive for double-digit growth faces critical energy constraints. While LNG, offshore wind, and nuclear projects are prioritized, slow project execution, regulatory complexity, and grid integration issues risk power shortages, directly affecting industrial output and supply chain reliability.

ESG, Regulatory, and Investment Climate

Taiwan’s evolving regulatory landscape, with a growing focus on ESG and sustainable development, shapes investment strategies. Infrastructure modernization and compliance with international standards are increasingly important for attracting capital and maintaining global market access.

Energy Transition and Pipeline Politics

Political and regulatory disputes over pipelines, LNG, and oil exports—especially to Asia-Pacific—are intensifying. Indigenous opposition, environmental concerns, and shifting U.S. energy policies complicate project approvals, affecting energy supply chains and long-term investment planning.

Industrial Policy and Market Intervention

The US is intensifying industrial policy through subsidies and intervention, particularly in energy and manufacturing. While supporting domestic sectors, these measures increase market volatility and complicate international investment decisions.

Regulatory Overhaul and Business Reforms

India is undergoing significant regulatory changes, including new acquisition financing rules, streamlined business laws, and enhanced ease of doing business. These reforms support structured growth, compliance, and transparency, reducing operational risks for international investors and businesses.

Fiscal Deficit and Tax Policy Changes

Russia’s budget deficit reached 2.6% of GDP in 2025, the highest since 2020, as energy revenues fell. The government raised VAT and other taxes to offset losses, increasing the fiscal burden on businesses and consumers and creating uncertainty for investors and multinational corporations.

Transport and Logistics Infrastructure Expansion

Large-scale upgrades, such as Ankara Esenboğa Airport’s expansion and new railway corridors, are set to boost Turkey’s role as a regional logistics hub. Improved connectivity will facilitate trade flows, reduce transit times, and enhance Turkey’s attractiveness for multinational supply chains.

Oil Revenue Losses and Export Risks

Sanctions and payment repatriation issues have resulted in Iran losing up to 38% of its oil revenue, with only $13 billion of $21 billion received. Protests and instability threaten further disruption to Iran’s 2% share of global oil exports.

Data Quality and Policy Uncertainty

Conflicting labor market data and survey reliability issues complicate economic policymaking and business planning. Discrepancies in unemployment and participation rates raise concerns about transparency and the accuracy of official statistics, increasing operational uncertainty for international investors.

Regional Alliance Shifts and Japan’s Role

Japan has signaled that a Taiwan contingency could trigger its own collective self-defense, linking its security directly to Taiwan’s fate. This evolving regional alliance landscape increases the complexity of risk for international businesses, with potential for broader conflict and supply chain disruptions.

Energy Security and Eskom Reform

South Africa’s improved energy stability, following Eskom’s R254 billion bailout and operational reforms, has reduced load shedding and restored investor confidence. However, high electricity costs and municipal debt remain risks for energy-intensive industries and future investment.

Foreign Investment Scrutiny and Regulatory Tightening

The US has expanded foreign investment screening, including new disclosure requirements for foreign private issuers and ongoing CFIUS reviews. These measures increase compliance burdens for cross-border deals, particularly in sensitive sectors, and reflect a broader trend toward national security-driven investment policy.

Geopolitical Competition With China

Escalating US-China tensions over technology, trade, and critical minerals disrupt global supply chains. China’s green industrial push and export controls on key materials challenge US dominance, forcing firms to reassess sourcing, market access, and risk exposure in Asia-Pacific.

Environmental Protection and Sustainable Growth

The new development blueprint elevates environmental protection to a central policy priority. Vietnam’s rapid industrialization is now balanced with commitments to sustainability, affecting project approvals, supply chain standards, and compliance requirements for international investors.

Escalating US-Mexico Security Tensions

US threats of military action against Mexican drug cartels, coupled with recent interventions in Venezuela, have raised geopolitical risk. Mexico firmly rejects intervention, but persistent US pressure and rhetoric could impact investor confidence, cross-border operations, and regional stability.

Deteriorating Investment Climate and Human Rights Concerns

Widespread repression, mass casualties, and international condemnation have further eroded Iran’s investment climate. Heightened scrutiny over human rights abuses and governance failures increases reputational and regulatory risks for foreign investors and partners.

US-Taiwan Semiconductor Trade Accord

The 2026 US-Taiwan trade deal slashes US tariffs on Taiwanese goods to 15% in exchange for at least $250 billion in Taiwanese chip investments in the US. This reshapes global supply chains, incentivizes US-based production, and strengthens bilateral economic ties.

Nickel Sector Investment and Offtake Deals

South Korea’s Sphere Corp acquired a 10% stake in a major nickel-cobalt project for $2.4 billion. Indonesia’s nickel sector, vital for EV batteries and renewables, is attracting strategic investments and offtake agreements, reinforcing its global supply chain influence.

Suez Canal Disruptions and Revenue Loss

Regional conflicts, particularly the Gaza war, have caused significant disruptions to Suez Canal traffic, resulting in an estimated $9 billion revenue loss over two years. Rerouted shipping increases global supply chain costs and reduces Egypt’s vital foreign exchange earnings, impacting trade and fiscal stability.

Export Growth and Trade Diplomacy

Turkey targets over $410 billion in exports for 2026, with record growth in goods and services. The government emphasizes trade diplomacy, especially with the EU, and aims to increase its share in global trade beyond 1.07%, supporting manufacturing and supply chain resilience.

Industrial Policy and Innovation Incentives

The Nova Indústria Brasil policy allocates R$300 billion in financing to boost industry, innovation, and exports, with a focus on green technologies and automotive efficiency. The government is also responding to industrial competitiveness challenges, especially in chemicals and fertilizers, with new fiscal incentives and regulatory reforms.

Semiconductor Tariffs and Industrial Pressure

The US is leveraging tariffs to coerce Korean chipmakers into expanding US-based manufacturing. Taiwan secured exemptions with $250 billion investment, while Korea faces pressure for similar commitments. These developments threaten Korea’s semiconductor sector, a cornerstone of its export economy.

Currency Collapse and Hyperinflation

The Iranian rial has lost over 50% of its value in 2025, with inflation exceeding 42%. This volatility erodes purchasing power, destabilizes pricing, and increases operational costs for foreign businesses and investors.