Transshipment Scrutiny Intensifies

Vietnam’s large U.S. goods surplus reached $178.2 billion in 2025, up $54.7 billion year on year, heightening scrutiny of origin fraud and rerouting from China. Multinationals should expect tighter customs checks, traceability demands, and supplier-audit requirements.

China Trade Dependence Deepens

Brazil-China trade reached a record US$170.9 billion in 2025, reinforcing China’s central role in exports, inputs, and investment. Strong demand supports agribusiness and mining, but concentration risk, policy leverage, and exposure to geopolitical frictions are rising materially.

Boom des investissements IA

Le sommet Choose France a annoncé 93 milliards d’euros d’investissements, dont 45 milliards de SoftBank pour des data centers. Cette dynamique renforce l’attractivité française pour l’IA, mais crée aussi des tensions énergétiques, foncières et de souveraineté technologique.

Energy And Power Reliability

Taiwan’s industrial outlook remains highly sensitive to electricity security as AI, chip fabrication, and advanced manufacturing raise power demand. For foreign investors, grid resilience, fuel import dependence, and pricing policy remain critical variables affecting expansion costs and operational continuity.

Rising Compliance and Enforcement

Taiwan’s first crackdown on AI-chip smuggling, including raids and detentions over falsified documents, signals tougher enforcement of strategic trade rules. Businesses handling semiconductors, servers or dual-use goods should expect more audits, documentation demands and liability around transshipment and end-user verification.

Won Volatility and Inflation

The won recently fell to its weakest level since 2009, prompting market-stabilization measures, anti-speculation enforcement, and possible levy relief. At the same time, inflation has moved above 3%, increasing import costs, hedging needs, and uncertainty for foreign investors and sourcing operations.

Geopolitical Shipping and Energy Disruptions

Middle East conflict is already affecting South Korean trade through higher crude prices, shipping disruption, and weaker exports to the region, which fell 7.7% in May. Importers and manufacturers face freight, insurance, and input-cost volatility across supply chains.

War Economy Crowds Out Investment

Defence and security spending now absorbs nearly 40% of federal outlays, squeezing civilian investment, raising taxes, and expanding domestic borrowing. The resulting fiscal imbalance is weakening non-military sectors, reducing growth prospects, and raising financing and policy risks for businesses.

Energy Sanctions and Fuel Costs

The UK has loosened some Russian fuel sanctions to ease diesel and jet fuel shortages after Middle East disruptions. Petrol reached 158.5p per litre, raising transport, aviation and manufacturing costs while exposing businesses to energy-policy volatility and ethical compliance scrutiny.

Infrastructure and New Capital Continuity

Authorities insist Nusantara capital development is continuing via state budget, private investment and PPP schemes, alongside broader logistics and service buildout in East Kalimantan. For investors, this sustains construction and infrastructure opportunities, though funding execution and policy continuity still require monitoring.

Strategic Shift Toward Resilience

Ongoing geopolitical frictions are accelerating China-plus-one sourcing, critical mineral stockpiling, and supply-chain localization strategies. Businesses reliant on China must balance cost advantages against concentration risk, sanctions exposure, and sudden regulatory change, especially in politically sensitive or high-technology sectors.

Inflation And Currency Collapse

Iran’s domestic economy is under severe stress, with official year-on-year inflation reaching 77.2% in May, essentials up 113.8%, and the rial weakening from 32,000 per dollar in 2015 to above 1.7 million, undermining contracts, pricing, wages, and local demand.

Sanctions Policy Pragmatism Risks

London temporarily eased restrictions on fuel refined from Russian crude in third countries to protect supply chains and consumers. The move highlights sanctions uncertainty, reputational exposure and compliance complexity for traders, insurers, logistics providers and energy-intensive businesses.

Steel and Aluminum Trade Friction

Steel and aluminum are central to current bilateral tensions. Mexico is contesting a 50% US tariff, while Washington is pressing for stricter melt-and-pour traceability and anti-transshipment safeguards. The dispute directly affects industrial margins, supplier qualification, and cross-border manufacturing competitiveness.

IMF-Driven Fiscal Tightening

Pakistan’s FY2026-27 budget is being shaped by IMF conditions, with provincial tax targets rising 64% to Rs1.947 trillion and federal revenue goals climbing sharply. Higher GST, reduced exemptions, and tighter enforcement raise compliance costs, pricing pressure, and policy uncertainty for investors.

Automotive EV Subsidy Distortions

Germany’s EV market is rebounding on state aid, with battery-electric registrations up 39% year on year in May and reaching a 25% market share. Yet subsidies are boosting foreign brands disproportionately, intensifying pressure on domestic automakers, suppliers and investment strategies.

Escalating Security in Balochistan

Militancy rose sharply in May, with 128 attacks nationwide, up 27% month on month. Balochistan recorded 71 attacks and 52 of 54 abductions, heightening security, insurance and project-execution risks for mining, logistics, energy and infrastructure operations.

Semiconductor Export Control Tightening

Taiwan’s first public prosecution over Nvidia AI chip smuggling to China, including forged export documents and seized servers, signals stricter enforcement. Companies in advanced electronics now face higher compliance, screening, traceability, and third-country transshipment risk across regional supply chains.

US Trade Probe Escalation

Washington has opened a third Section 301 investigation into Vietnam, this time on intellectual property, alongside probes on overcapacity and forced labor. With unresolved trade talks and tariff risk, exporters, sourcing strategies, compliance planning, and margin assumptions face growing uncertainty.

Persistent Inflation, Tight Monetary Policy

Turkey’s central bank held its policy rate at 37%, with overnight lending at 40%, while May inflation remained 32.61%. Elevated borrowing costs, lira volatility near 46 per dollar, and revised 2026 inflation targets raise financing, pricing, and hedging risks for importers and investors.

Fiscal Rules Shape Investment Capacity

Debate over reforming Germany’s constitutional debt brake remains unresolved, creating uncertainty around future public investment in infrastructure, defense, and industrial support. The outcome will influence financing conditions, state aid capacity, and medium-term demand for construction, transport, and strategic industries.

US Tariffs and Diplomatic Friction

Washington’s 30% tariffs on South African goods, combined with political tensions and G20 disruption, raise market-access risk for exporters. Firms with US exposure face margin pressure, trade diversion, compliance uncertainty, and a stronger case for diversifying destinations and supply chains.

Industrial Localization Expands Nationwide

Egypt is widening its industrial base through a new offering of 400 serviced industrial plots totaling about 900,000 square meters across 15 governorates. The focus on supplier industries in food, engineering, chemicals, textiles, and pharmaceuticals could strengthen domestic sourcing and import substitution.

Rupiah Weakness and Tighter Rates

The rupiah has traded near Rp17,700 per US dollar, prompting Bank Indonesia to raise rates 50 basis points to 5.25%. Higher funding costs, FX volatility and a wider current-account deficit increase hedging needs and pressure importers, leveraged firms and investment planning.

Defence localisation requirements

New defence offset proposals would require foreign contractors to create UK jobs, invest in local suppliers or increase British-made content to win contracts. This raises market-entry requirements for overseas firms but opens partnership opportunities for domestic suppliers across aerospace, electronics and advanced manufacturing.

CUSMA Renegotiation and US Tariffs

Canada faces its most consequential external risk from CUSMA review and persistent U.S. tariffs on steel, aluminum, autos and some downstream products. Nearly 70% of exports go to the U.S., so prolonged uncertainty threatens investment planning, integrated supply chains and export pricing.

Critical Minerals Strategic Positioning

Canada is promoting its reserves of potash, nickel, copper and uranium as secure inputs for defense, energy and AI supply chains. This strengthens its role in Western industrial policy, but project timelines, infrastructure gaps, and foreign investment scrutiny may delay execution.

EU China Shock Countermeasures

European policymakers are preparing tougher instruments against Chinese overcapacity, subsidies and supplier concentration, including diversification rules and faster safeguards. Businesses trading through Europe face rising risks of new probes, tariffs, localization requirements and retaliatory action from Beijing.

War Spending Straining Finances

Russia’s war expenditures are running at least 2 trillion rubles above plan this year, with the budget deficit already at 5.9 trillion rubles by April. Rising fiscal pressure increases risks of taxation changes, spending cuts, delayed payments and macroeconomic instability affecting operating conditions.

Deforestation Rules Reshape Exports

Although Brazil’s 2025 deforestation fell 20.6% and dropped below 1 million hectares, compliance pressure is intensifying. EU anti-deforestation rules may affect nearly 264,000 properties, while US scrutiny links environmental enforcement directly to trade penalties, raising traceability and sourcing costs for exporters.

US-China Managed Trade Friction

Washington and Beijing are building ‘board of trade’ and ‘board of investment’ mechanisms, but tariff relief appears limited to roughly $30 billion of non-sensitive goods while Section 301 risks persist. Firms should expect continued policy volatility, selective market openings, and strategic decoupling pressures.

Defense industrial expansion reshapes economy

Netanyahu’s push for a more self-reliant ‘super-Sparta’ model includes planned defence-industry investment of NIS 350 billion over a decade. This may benefit aerospace, cybersecurity, and military suppliers, while redirecting capital and policy attention away from civilian sectors and social spending.

US Trade Probe Escalation

Washington has opened a third Section 301 investigation into Vietnam, this time on intellectual property, alongside probes into overcapacity and forced labor. With tariffs previously cut from 46% to 10%, renewed U.S. pressure raises material uncertainty for exporters and investors.

Logistics Corridors Gain Momentum

Brazil’s Supreme Court cleared a key legal hurdle for the Ferrograo railway linking Mato Grosso to northern export hubs. The project could cut grain logistics costs and emissions, but environmental licensing, Indigenous reviews and concession structuring still leave execution timelines uncertain.

Tighter Russia sanctions compliance

The UK is expanding Russia sanctions to cover uranium, crypto-finance, industrial inputs, shipping, and construction services, while refining fuel-origin rules. Businesses face higher screening, due-diligence, and maritime compliance costs, especially in energy, metals, dual-use goods, and finance.

Industrial Policy and Localisation Push

Government’s R130.6 billion medium-term trade and industry allocation reinforces localisation, procurement activism, green industrialisation, and export development. International firms may find incentives and partnership opportunities, but should expect stricter local-content expectations, policy intervention, and closer scrutiny of procurement strategies.