Rare Earth Supply Leverage

China’s control of roughly 75% of rare earth mining and 85% of processing remains a major supply-chain risk. With suspended broad controls expiring in November and targeted restrictions continuing, automakers, electronics firms, and defense-linked manufacturers face renewed sourcing volatility.

Import Costs Driving Trade Deficit

Japan recorded a July trade deficit of 634.5 billion yen as imports rose 27.8% and crude oil imports surged 87.8% year on year. Rising import bills are pressuring margins, worsening cost pass-through challenges, and increasing exposure for import-dependent manufacturing and consumer businesses.

Geopolitical tensions lift energy risk

US strikes on Iran, worries over the Strait of Hormuz and Brent trading near the mid-90s to about 90.95 dollars were repeatedly linked to inflation and market stress. Higher energy prices threaten transport, production and logistics costs for Turkey-linked supply chains.

Customs law tightens border controls

Vietnam’s amended customs law broadens authority to intercept counterfeit and infringing goods, including transit and e-commerce shipments, while requiring platform and logistics data-sharing. For businesses, this should strengthen compliance expectations, reduce illicit competition, and increase border-reporting obligations from 2027.

Nickel Rules Raise Investor Friction

Indonesia’s tighter nickel policies, including a new pricing formula, export changes and stricter mining quotas, are raising costs for foreign operators. Chinese firms warn these measures, alongside higher taxes, are threatening project economics, downstream investment decisions and battery supply-chain planning.

US tariff access remains pivotal

Vietnam’s appeal is reinforced by relatively workable access to the US market after bilateral arrangements reduced earlier tariff fears, with one report citing a current 12.5% tariff level for many shipments. Export planning, however, remains highly exposed to future US policy changes.

Regional trade partners under pressure

Iran’s commercial ties with Iraq, Turkey, Oman, Pakistan, Armenia and Azerbaijan remain significant, but each now faces higher sanctions and settlement risks. Cross-border trade is becoming less reliable as security disruptions, payment restrictions and secondary-sanctions threats reshape regional business decisions.

US-India trade deal negotiations

India and the US are advancing a bilateral trade framework, with talks covering tariffs, excess-capacity probes and market access. Around 45% of India’s exports to the US reportedly remain exempt from additional duties, so negotiations could materially affect investment planning and export sector outlooks.

Radar import deal reshapes procurement

Britain is evaluating an Australian phased-array radar deal worth more than A$10 billion, potentially one of the UK’s largest defence technology imports. The move could redirect naval and land-systems procurement, alter supplier competition, and create integration opportunities across allied defence electronics chains.

Secondary sanctions reshape trade

The new US campaign against Iran expands sanctions across shipping, technology, aviation, gold, and digital assets, with secondary penalties threatening foreign firms’ dollar access. Multinationals face heightened compliance, banking, and counterpart risk across Middle East and Asia-linked trade flows.

Russian oil dependency creates vulnerability

Russia supplied 52% of India’s crude imports in July, with import value rising to $8.91 billion from $4.84 billion a year earlier. This dependence supports refinery economics but increases exposure to sanctions, tariff retaliation, and policy-driven market disruptions.

Alliance uncertainty hits operations

Trump’s reduction of joint exercises and recurring disputes over hosting roughly 28,500 US troops add uncertainty to the security environment. Even without immediate disruption, companies must factor geopolitical volatility, defense-policy shocks, and contingency planning into supply-chain resilience and capital deployment decisions.

US secondary sanctions broaden

Washington has launched its harshest Iran sanctions push yet, threatening secondary penalties on countries, banks, shippers and firms maintaining Iranian ties. New measures now target shipping, aviation, technology, gold and digital assets, heightening global compliance, payment and counterparty risks.

Rising JGB Yields Raise Costs

Japan’s 10-year government bond yield has reached 30-year highs, while 30-year auction results and higher fiscal assumptions signal persistent pressure on sovereign borrowing costs. Higher yields can lift corporate financing costs and complicate investment plans across the economy.

Sanctions architecture broadens further

The EU’s latest and proposed sanctions packages widen restrictions on 33 Russian banks, crypto providers, refineries, LNG tanker sales and 41 shadow-fleet vessels. Brussels also signaled an autumn expansion that could increase sanctioned Russian entities by one-third.

EU trade reset on steel farming

The government is prioritizing a 'good deal' for British steel and farming ahead of an EU summit. New EU steel rules and UK quota reductions are pressuring producers, while a forthcoming SPS deal could cut red tape and lift agricultural exports by 16%.

Gray-Zone Maritime Pressure Rising

Chinese coast guard, research, and militia-linked vessels have sharply increased activity near Taiwan’s eastern waters, with August sightings reaching 160. This creates risks for shipping routes, submarine transit, and potential quarantine-style disruption to trade flows.

Energy Grid And Storage Investment

The government says growth will depend on major investment in electricity generation, the grid and storage, alongside renewables and small modular nuclear reactors. These priorities matter for industrial power costs, data centres, AI infrastructure and wider business resilience.

Russian oil dependence and diversification

Russia supplied 30.3% of India’s crude in FY26 and more than 50% in June-July by some estimates, cushioning costs but increasing sanction exposure. Refiners are now diversifying toward West Africa, the Americas and the Gulf, reshaping procurement strategies and freight economics.

Steel Auto Tariff Pressure

Mexico is negotiating to reduce U.S. tariffs of 50% on steel and aluminum and 25% on vehicles, creating immediate margin, sourcing, and production risks for manufacturers, exporters, and suppliers tied to North American industrial chains.

AI Infrastructure Attracts Foreign Capital

The Together AI–Humain deal for a 250-megawatt data center shows Saudi Arabia drawing global technology investment into compute capacity. The project highlights opportunities in cloud services, semiconductor-enabled infrastructure, and energy- and water-intensive digital development.

Commercial vessel security deteriorates

Reports of tankers struck near Oman, disabled ships, boarded vessels, and fatalities among seafarers indicate a worsening security environment for shipping. Operators may need rerouting, convoy coordination, and revised war-risk insurance coverage for Gulf transits.

Strategic Commodity Exchange Emerges

The government plans to launch a Strategic Mineral and Commodity Exchange on 1 January 2027 under OJK oversight, covering exports such as nickel, coal and palm oil. This could reshape benchmark pricing, contract structures, trading transparency and hedging practices for global buyers.

Maritime and transport connectivity upgrades

Prabowo’s push for direct shipping and flights with Russia, plus Bali’s tram and road projects, shows a wider connectivity agenda. Businesses should expect logistics restructuring, new route opportunities, and project-delivery dependencies tied to land acquisition, permits, and infrastructure execution.

Iran Sanctions Compliance Tightens

Expanded US secondary sanctions targeting Iran-linked shipping, aviation, technology and finance raise compliance risks for firms connected to Israel’s regional trade environment. Businesses may need stricter due diligence on counterparties, routing, insurers and financial channels across the Middle East.

China partnership gains strategic weight

Recent reporting shows Beijing expanding cooperation with Brazil in artificial intelligence, satellites, fertilizer trade and critical-mineral processing. As US tensions rise, Chinese capital and technology partnerships could gain further momentum, reshaping competitive dynamics in industrial policy and strategic sectors.

Germany Split on China

Internal disagreement in Berlin is delaying a clear China strategy as EU partners prepare broader tariffs, quotas and legal reforms. Businesses are being forced to reassess China exposure, critical-mineral dependencies and procurement strategies without firm policy direction from Germany.

Longer shipping routes raise costs

As India and other Asian buyers shift away from vulnerable chokepoints, longer voyages from the Americas and Africa are becoming more common. That improves resilience, but also extends transit times, increases tanker demand and lifts freight, insurance and inventory costs.

China retaliation and critical minerals

US pressure on Chinese entities tied to Iran and broader trade restrictions is increasing the risk of calibrated Chinese retaliation, including critical minerals export controls. This creates procurement vulnerability for manufacturers dependent on Chinese inputs, batteries, electronics, and industrial components.

Critical Infrastructure Sabotage Risks

A series of suspected sabotage incidents at power substations, grid nodes and transport facilities is increasing operational risk for companies in Germany. Authorities and industry groups warn that disruptions could halt production within hours unless resilience, monitoring and backup systems are strengthened.

EAEU Free Trade Push

Thailand is accelerating efforts toward a free trade agreement with the Eurasian Economic Union, with officials urging talks to move from discussion to execution. For exporters and investors, a deal could open new market access while increasing sanctions-screening complexity.

Hormuz disruption lifts energy risk

Conflict-linked disruption in the Strait of Hormuz is raising shipping and energy costs for India, which received nearly half its crude and almost two-thirds of its LNG through the route in 2025, pressuring logistics, input costs, and business continuity.

Steel Tariffs And Market Access

The UK is seeking relief from higher EU steel tariffs and has lowered its own tariff-free quota levels, with imports above thresholds facing 50% duties. The issue is critical for manufacturers, reshoring plans and supply-chain decisions across metals-intensive sectors.

Longer-Stay Business Travel Narrowed

The new exemption is now strictly for tourism, removing language that had allowed certain short-term work and business activity. Companies relying on flexible business travel, project visits, or ad hoc meetings may need to shift to formal visas or extensions.

Supply chains squeezed by sanctions

Ukraine is moving to accelerate sanctions alignment with foreign decisions, reducing the time between international listings and domestic enforcement. Businesses face higher compliance risk, especially in long-term contracts and cross-border supply chains, where a counterparty may quickly become restricted in Ukraine.

Saudi crude rerouting boosts

Saudi exporters are shifting crude through Egypt’s SUMED-Suez corridor after Hormuz and Bab al-Mandeb disruption. Flows rose from 650,000 barrels per day in June to 1.9 million in August, increasing corridor importance but also congestion, route dependency, and operating costs.