Sanctions and compliance exposure regionally

Israel’s geopolitical positioning—amid Iran-related tensions and complex regional alignments—heightens sanctions-screening, export-control and counterparty risks. Multinationals face enhanced due diligence needs around dual-use goods, defense-linked supply, financial flows and third-country intermediaries.

Maritime and insurance risk premia

Geopolitical volatility continues to reshape Asia–Europe logistics. Even as Red Sea routes partially normalize, rate swings and capacity overhang drive volatile freight pricing. China exporters and importers should plan for sudden rerouting, longer lead times, and higher war-risk insurance.

Electronics export surge reshapes supply chains

Electronics exports hit $22.2bn in the first half of FY26; mobile production rose nearly 30x from FY15 to FY25, making India the world’s second-largest phone manufacturer. Opportunities grow in EMS, components, tooling, and specialized logistics.

China-tech decoupling feedback loop

U.S. controls and tariffs are accelerating reciprocal Chinese policies to reduce reliance on U.S. chips and financial exposure. This dynamic increases regulatory fragmentation, raises substitution risk for U.S. technology vendors, and forces global firms to design products, data flows, and financing for bifurcated regimes.

FDI Attraction And Industrial Ecosystems

Vietnam ranks among the world’s top 15 FDI destinations, leveraging administrative reform, ESG-compliant infrastructure, and integrated industrial parks. Enhanced support services and financial incentives are driving sustainable industrial development and long-term investor retention.

Labor Market and Immigration Enforcement

Intensified immigration raids, border controls, and restrictive labor policies have disrupted workforce availability, dampened consumer demand in immigrant communities, and created compliance challenges for businesses, particularly in sectors reliant on foreign labor and diverse talent pools.

Semiconductor Industry Policy Overhaul

South Korea passed a landmark law to strengthen its semiconductor sector, establishing a presidential commission and special funding. The law aims to secure technological leadership in AI chips, centralize support, and incentivize regional development, directly impacting global tech supply chains and investment flows.

Ports and logistics labor uncertainty

U.S. supply chains remain exposed to port and transport labor negotiations and anti-automation disputes, increasing disruption risk at key gateways. Importers may diversify ports, adjust routing, and carry higher safety stock, especially when tariff timing triggers demand spikes and front-loading behavior.

Data (Use and Access) Act

Core provisions of the UK Data (Use and Access) Act entered into force, expanding ICO powers to compel interviews and technical reports and enabling fines up to £17.5m or 4% of global turnover under PECR. Compliance programs, AI/data governance, and cross-border data strategies may need recalibration.

Workforce Development and Talent Mobility

Industrial growth and nearshoring are driving demand for skilled labor, prompting national upskilling initiatives. TN visas facilitate Mexican talent mobility to the US, while labor shortages and wage pressures in both countries are reshaping hiring strategies and operational models.

Crackdown on grey capital

Industry leaders are urging tougher action against scams, money laundering and “grey capital,” warning reputational and compliance risks if Thailand is seen as a laundering hub. Expect tighter KYC/AML enforcement, more scrutiny of cross-border payments, and operational impacts for fintech and trade.

Strategic Shift to High-Value Industries

Thailand is pivoting from low-cost manufacturing to high-value sectors such as digital technology, green industries, and advanced manufacturing. The Eastern Economic Corridor and targeted incentives are attracting FDI, but competition from Vietnam and regional peers remains intense.

Domestic Reforms and Infrastructure Investment

Canada is fast-tracking $1 trillion in investments across energy, AI, critical minerals, and trade corridors, alongside tax reforms and interprovincial trade liberalization. These initiatives aim to boost competitiveness and supply chain resilience, presenting significant opportunities for global investors.

Balochistan security threatens projects

Militant violence in Balochistan is disrupting logistics and deterring FDI, including audits and security redesigns around the $7bn Reko Diq project. Attacks on rail and highways raise insurance, security and schedule costs for mining, energy, and corridor-linked supply chains.

USMCA review and tariff risk

Washington and Mexico have begun talks on USMCA reforms ahead of the July 1 joint review, with stricter rules of origin, anti-dumping measures and critical-minerals cooperation. Uncertainty raises pricing, compliance and investment risk for export manufacturers, especially autos and electronics.

Semiconductor subsidies and scaling

Tokyo’s push to rebuild advanced chip capacity via subsidies and anchor projects (TSMC Japan expansion, Rapidus 2nm ambitions) is reshaping supplier location decisions across materials, tools and chemicals. Expect local-content incentives, talent constraints and tighter export-control alignment with partners.

Energia, capacidade e risco climático

A Aneel aprovou leilões de reserva de capacidade em março, com preço-teto de até R$ 1,6 milhão/MW-ano e 368 projetos cadastrados. O mix renovável exige reforço de potência firme e transmissão; eventos climáticos aumentam riscos de custo e continuidade operacional.

Canada pivots trade diversification

Ottawa is explicitly pursuing deeper trade ties with India, ASEAN and MERCOSUR to reduce U.S. dependence, while managing frictions around China-linked deals. Exporters may see new market access and compliance needs, but also transition costs, partner-risk screening and logistics reorientation.

National Privatization Strategy Expands PPPs

The new National Privatization Strategy aims to sign over 220 public-private partnership contracts and mobilize $64 billion in private investment by 2030. This initiative opens infrastructure, health, education, and logistics to foreign investors, enhancing competitiveness and operational efficiency.

Chronic Debt Dependency Crisis

Pakistan’s reliance on foreign loans from China, Saudi Arabia, UAE, and the IMF has reached critical levels, with external debt exceeding $128 billion. This dependency forces policy compromises and exposes businesses to currency volatility, regulatory unpredictability, and lender-driven reforms.

Nuclear expansion and export-linked cooperation

Seoul is restarting new reactors (two 1.4GW units plus a 700MW SMR) while pursuing expanded US civil nuclear rights and fuel-cycle cooperation. This reshapes electricity price expectations, industrial siting, and opportunities for EPC, components, and uranium services.

Rising funding costs, liquidity swings

Short-term liquidity tightened around Tet, pushing interbank rates sharply higher and prompting widespread deposit-rate hikes; Agribank lifted longer tenors up to 6%. Higher financing costs can squeeze working capital, pressure leveraged sectors, and raise hurdle rates for projects.

Sanctions Policy Divergence

The UK is increasingly diverging from EU sanctions policy, developing its own robust framework targeting Russia, China, and other actors. This creates compliance challenges for multinationals and impacts global supply chains and financial flows.

Immigration rule overhaul and labour supply

Proposals to extend settlement timelines (typically five to ten years, longer for some visa routes) plus intensified sponsor enforcement create uncertainty for employers reliant on skilled migrants, notably health and social care. Expect higher compliance costs, churn, and wage pressure.

Complex Sanctions and Regulatory Landscape

Ukraine’s regulatory environment is shaped by evolving sanctions on Russia and new trade controls. Businesses face compliance challenges, especially regarding dual-use goods and financial transactions, requiring constant monitoring of legal and operational risks.

Migration and visa integrity tightening

Australia is tightening migration settings and visa oversight, affecting talent pipelines. Skilled visa backlogs and stricter student ‘Genuine Student’ tests are increasing rejection and processing risk, while Home Affairs is considering tougher sponsor vetting after exploitation cases—raising HR compliance demands for employers.

Tech Sector Expansion Amid Global Demand

Israel’s technology sector, including AI and semiconductor equipment, is experiencing robust growth, attracting major investments like Nvidia’s new campus. This expansion strengthens Israel’s global tech leadership but also strains local infrastructure and raises competition for talent.

Financial compliance, post-greylist tightening

After exiting FATF greylisting and EU high-risk listing, regulators are tightening AML/CFT oversight. The FIC is moving to require richer geographic and group-structure disclosures for accountable institutions, increasing compliance workloads, KYC expectations and potential enforcement exposure for cross-border groups.

Reciprocal tariffs and dealmaking

The U.S. is using “reciprocal” tariffs and partner-specific deals to reshape market access. Recent U.S.–India terms set an 18% reciprocal rate, while U.S.–Taiwan caps most tariffs at 15%, shifting sourcing, pricing, and contract risk for exporters.

Technology Sector Resilience and Global Ties

Despite regional instability, Israel’s technology and cybersecurity sectors attract substantial investment and foster international partnerships. Recent major funding rounds and cross-border collaborations, especially in cybersecurity, underscore the sector’s resilience and its centrality to Israel’s economic strategy.

Trade surplus masks concentration risk

Indonesia posted a US$41.05bn 2025 trade surplus (up from US$31.33bn in 2024), with December exports up 11.64% to US$26.35bn led by palm oil and nickel. Heavy commodity dependence heightens exposure to policy shifts and price cycles.

Macroeconomic Stabilization and Growth Momentum

Pakistan has shifted from crisis management to strategic repositioning, achieving GDP growth above 3.7%, a fiscal surplus, and declining inflation. These improvements have boosted investor confidence, but sustained policy continuity and private sector participation are critical for long-term business stability and growth.

Pemex finances and supply reliability

Pemex reported debt reduced to about $84.5bn and announced multi-year capex to lift crude and gas output, targeting 1.8 mbd oil and 4.5 bcf/d gas. Improved balance sheet helps suppliers, but operational execution and fiscal dependence still affect energy reliability and payments.

Labor Reforms and Compliance Pressure

Recent labor reforms include a 13% minimum wage hike, stricter workplace inspections, and recognition of app-based couriers as employees. Upcoming changes, such as a proposed 40-hour workweek and enhanced whistleblowing, increase compliance costs and operational complexity for international employers.

Auto Sector Faces Structural Upheaval

The Canadian auto industry is under pressure from US tariffs, competition from low-cost Chinese imports, and uncertain investment incentives. The sector’s future hinges on attracting foreign investment, adapting supply chains, and securing North American market access amid policy shifts.

Defense build-up reshapes industry

La hausse des crédits militaires (+6,5 à +6,7 Md€, budget armées ~57,2 Md€) accélère commandes (sous-marins, blindés, missiles) et renforce exigences de conformité, sécurité et souveraineté. Opportunités pour fournisseurs, mais arbitrages budgétaires pèsent sur autres programmes d’investissement.