Market Access and Trade Barriers

Trade barriers, including tariffs and import restrictions, have increased amid geopolitical tensions. These barriers limit market access for foreign companies and complicate export strategies, affecting international trade flows with Russia.

Energy Sector Expansion Drives Investment

Brazil’s oil production is projected to reach 5.5 million barrels per day in 2026, positioning the country as a key global energy supplier. This expansion attracts foreign investment, enhances export revenues, and increases Brazil’s geopolitical influence in energy markets.

Agricultural Export Challenges

Ukraine's role as a major grain exporter faces challenges from conflict-related port blockades and logistical bottlenecks. These disruptions affect global food supply chains and commodity markets, impacting international trade and investment in agribusiness sectors.

Labor Market Dynamics

Saudi labor reforms and Saudization policies influence workforce availability and costs. International companies must adapt to local employment regulations, impacting operational efficiency and human resource strategies.

National Security Strategy and Economic Unilateralism

The 2025 US National Security Strategy prioritizes reindustrialization, energy independence, and technological supremacy. Its mercantilist, interventionist stance increases regulatory barriers, marginalizes allies, and risks global market fragmentation, directly affecting international trade and investment planning.

Shift Toward Defensive Industries

Japanese defense and aerospace stocks rallied amid rising geopolitical tensions and export controls. International investors should note the sector’s growing strategic importance, but also the risks of regulatory changes and supply chain bottlenecks linked to regional security dynamics.

Regional Security Alliances and Strategic Positioning

Japan’s explicit linkage of its security to Taiwan and US strategic documents underscore Taiwan’s role in Indo-Pacific stability. Heightened military posturing and alliance-building increase both deterrence and the risk of escalation, affecting long-term business planning and risk assessment.

Renewable Energy Transition Challenges

Australia’s ambitious shift to renewables is marked by rapid project approvals and grid integration successes, but also rising system costs, policy uncertainty, and continued reliance on coal for grid stability. Businesses face evolving regulatory frameworks and investment risks in the energy sector.

Political Uncertainty and Labour Leadership

Upcoming local elections and internal Labour debates over Brexit reversal and EU alignment create political instability. Leadership challenges and policy shifts could alter the UK’s trade, investment, and regulatory environment, affecting business confidence.

Shifting Supply Chains Post-Tariffs

U.S.-China trade contraction in 2025 drove a 28% increase in U.S. imports from Thailand, making it a key beneficiary of global sourcing shifts. However, future legal changes and trade deals could reverse these gains, impacting Thailand’s export-led growth.

Environmental Policies and Sustainability Initiatives

Israel's commitment to sustainability and green technologies influences business practices and investment decisions. Environmental regulations and incentives promote innovation in clean energy and sustainable agriculture, aligning with global ESG trends.

Infrastructure Development

Massive investments in infrastructure, such as NEOM and transport networks, are transforming Saudi Arabia into a logistics hub. Improved infrastructure facilitates efficient supply chains and opens new avenues for trade and investment.

Energy Independence and Transition Initiatives

Indonesia is accelerating its energy transition with new solar projects, waste-to-energy initiatives, and refinery upgrades. The government targets energy independence within five years, which will reduce import reliance and create opportunities for renewable energy and infrastructure investment.

Infrastructure Expansion and Urban Development

Major infrastructure projects, including transport and power grid upgrades, are driving economic growth and urban transformation. Hanoi’s record budget revenue and full disbursement of public investment funds highlight the government’s commitment to sustainable development and improved business environment.

Technology and Services Sector Leadership

India’s IT, BPO, and digital services sectors continue robust growth, hosting 45% of global GCCs. Investments in digital infrastructure and innovation position India as a global hub for advanced technology, consulting, and cross-border services, attracting international investment and talent.

Political Risk and Regulatory Uncertainty

Proposed amendments to Taiwan’s Offshore Islands Construction Act could allow local governments to negotiate directly with China, raising national security concerns and regulatory uncertainty for foreign investors, especially in Kinmen and Matsu special zones.

Strategic Defense Alliances and Regional Security

Turkey is negotiating a tripartite defense pact with Saudi Arabia and Pakistan, and is assuming a leading role in Black Sea naval security. These moves enhance Turkey’s geopolitical influence, but may introduce new risks and compliance considerations for international firms.

Geopolitical Tensions and Security Risks

North Korea’s military provocations, nuclear submarine development, and evolving US-South Korea alliance dynamics heighten regional security risks. Businesses must assess exposure to geopolitical disruptions, supply chain vulnerabilities, and shifting defense priorities in Northeast Asia.

Stock Market Surges on Tech Boom

South Korea’s stock market capitalization soared 76.2% in 2025, driven by Samsung and SK hynix’s gains amid AI chip demand. The KOSPI index rose 75.7%, reflecting investor optimism and amplifying the country’s attractiveness for international capital and portfolio investment.

Energy Transition and Nuclear Expansion

France’s €52 billion commitment to new nuclear reactors underscores its strategy for energy security and decarbonization. However, hardware shortages, dependence on Asian imports, and rising energy nationalism across Europe create operational and investment uncertainties for energy-intensive industries and infrastructure projects.

Trade Diversification and New Agreements

Brazil is actively expanding trade ties beyond traditional partners, deepening relations with India, Southeast Asia, and the Middle East. Ongoing negotiations with Canada and the UAE, and the push for new market access, are reshaping Brazil’s international trade landscape and reducing single-market dependence.

Supply Chain Realignment and Diversification

Geopolitical fragmentation and Brexit have forced UK businesses to reassess supply chains, with increased complexity and a push for diversification away from high-dependency markets like the US and China. Strategic adaptation is required to maintain resilience and access to key inputs and markets.

Suez Canal Disruptions and Security

Geopolitical tensions and attacks in the Red Sea have led to a sharp decline in Suez Canal traffic, with tonnage operating at 70% below 2023 averages. This has increased shipping costs, rerouted global supply chains, and significantly reduced Egypt’s canal revenues.

Energy Transition and LNG Imports Surge

Egypt’s domestic gas production has declined, driving record LNG imports—9.01 million metric tons in 2025, mostly from the US. New agreements with Qatar and Israel aim to secure supply, but Egypt’s shift from exporter to major importer impacts energy costs, industrial competitiveness, and investment strategies.

Industrial Investment and Regional Modernization

Major investments in sectors like aerospace, steel, chemicals, and logistics—such as Airbus Helicopters’ €600 million modernization and Marcegaglia’s €750 million low-carbon steel plant—demonstrate France’s focus on industrial competitiveness, job creation, and sustainable development, shaping the long-term business environment.

Venezuelan Oil Threatens Canadian Exports

The U.S. takeover of Venezuela’s oil sector could rapidly revive heavy crude exports, directly competing with Canadian oil in American refineries. While short-term displacement is limited, long-term risks include market share loss, price discounts, and urgent need for export diversification.

Communications Blackouts and Information Risks

Iran has imposed nationwide internet and phone shutdowns, severely restricting information flow. These blackouts hinder business continuity, disrupt logistics, and complicate due diligence, heightening operational uncertainty for all international stakeholders.

Labor Market and Immigration Uncertainties

US labor market data shows mixed signals: job growth has slowed, unemployment remains low, and wage growth persists. Immigration policy remains restrictive, impacting talent availability and operational costs for multinational firms, especially in technology and healthcare sectors.

Infrastructure And Energy Sector Strains

Despite vast oil and gas reserves, Iran faces energy mismanagement, rolling blackouts, and water shortages. Infrastructure decay and unreliable utilities disrupt industrial operations, logistics, and supply chain reliability for domestic and foreign businesses.

Foreign Investment Climate Deteriorates

Sanctions, currency instability, and political unrest have sharply reduced foreign direct investment. The environment is marked by opaque regulations, high corruption, and unpredictable policy shifts, deterring new entrants and expansion.

Labor Market Challenges and Mobility

Germany’s stagnant labor market and skill shortages are prompting policy reforms and new migration agreements, notably with India. Streamlined visas for healthcare and tech professionals are expected to support business operations and competitiveness.

Youth-Led Political Mobilisation

Generation Z activism and opposition rallies are reshaping the political landscape, challenging established power structures and demanding reforms. This trend increases volatility and may influence policy direction, regulatory enforcement, and the overall business environment.

Financial Market Upgrades and Capital Flows

FTSE Russell’s upgrade of Vietnam to Secondary Emerging Market status in 2026 is expected to attract $3–8 billion in foreign investment. Stock market reforms, IPO surges, and improved legal frameworks are enhancing capital market depth, supporting business expansion and investor confidence.

Regulatory Overhaul and NGO Restrictions

Israel’s sweeping regulatory changes in 2026 impose stringent requirements on foreign NGOs operating in Gaza and the West Bank, restricting aid and international staff. These measures heighten compliance risks and complicate humanitarian supply chains for global organizations.

Industrial Decline and Restructuring

Germany faces a deep industrial downturn, with manufacturing output shrinking by up to 20% since 2018 and over 120,000 jobs lost in 2025 alone. This trend is driven by high energy costs, regulatory burdens, and global trade shocks, forcing companies to relocate production and restructure operations.

Energy Sector Reform and Investment

Mexico is negotiating with global oil majors to revive hydrocarbon production and attract private capital, while expanding renewable energy and gas infrastructure. Regulatory reforms aim to balance state control with investment incentives, but contract risks and policy shifts remain a concern.