Air Access Recovery Supports Demand

Air connectivity is improving, including Solomon Airlines’ new twice-weekly Brisbane–Santo service, while broader fare trends show Sydney–Port Vila prices down 35% year on year. Better access supports investor travel, workforce mobility, and pre/post-cruise tourism demand despite Vanuatu’s still-fragile aviation recovery.

USMCA Review and Tariff Risk

Mexico’s 2026 USMCA review is becoming a prolonged negotiation centered on autos, steel, energy, Chinese inputs and investment screening. Potential tighter rules of origin, side letters and tariff actions could reshape market access, cross-border production economics and strategic sourcing decisions.

State Intervention Raises Expropriation Risk

The Kremlin is intensifying demands on domestic business through ‘voluntary contributions,’ shifting tax burdens, and growing control over strategic sectors. For foreign investors, this reinforces already severe risks around asset security, profit repatriation, arbitrary regulation, and politically driven state intervention.

Industrial Margin Squeeze Emerging

China’s producer prices rose 0.5% year-on-year in March, ending a 41-month deflation streak, but mainly because of higher energy and commodity costs. With consumer demand still weak, manufacturers face difficulty passing through input inflation, threatening margins, supplier solvency and pricing stability across export chains.

China-Centric Energy Trade Dependence

More than 90% of Iranian oil exports are reportedly absorbed by Chinese buyers, especially Shandong teapot refineries, with transactions increasingly settled in yuan. This deepens Iran’s dependence on China while reshaping regional trade patterns and currency risk exposure.

Gaza Ceasefire Fragility Persists

The Gaza ceasefire remains unstable, with more than 700 Palestinians reportedly killed since October and repeated implementation disputes over withdrawals, crossings, and disarmament. Businesses face elevated operational uncertainty from renewed escalation risks, humanitarian restrictions, and shifting border-access conditions.

Inflation and Rate Pressure Rising

Headline inflation eased to 3.7% in February, but fuel and fertiliser shocks are expected to reverse progress, with some forecasts pointing toward 4.5-5.0% inflation, raising borrowing costs, weakening demand visibility, and complicating pricing, hiring, and capital-allocation decisions.

Energy Shock and Stagflation

The UK faces the sharpest OECD downgrade among major economies, with 2026 growth cut to 0.7% and inflation raised to 4.0%. Higher oil, gas and transport costs are squeezing margins, weakening demand, and complicating pricing, financing, and investment decisions.

Steel Sector Under US Tariffs

Mexico’s steel industry has fallen to a 25-year low under intensified U.S. Section 232 tariffs. Capacity utilization dropped to 55%, exports fell 53% in 2025 and domestic consumption declined 10.1%, threatening upstream suppliers, industrial investment and manufacturing competitiveness.

Inflation Growth Policy Dilemma

March CPI rose 2.2% year on year, with petroleum prices up 10.4%, while growth forecasts have slipped into the 1% range for many economists. The Bank of Korea faces a difficult balance between inflation control, financial stability, and supporting domestic demand.

Reserve Depletion and Rating Risk

Central bank reserve losses and large-scale FX support have increased sovereign risk scrutiny. Fitch shifted Turkey’s outlook to Stable, citing more than $50 billion in intervention, creating implications for external financing costs, investor sentiment, and counterparty risk assessments.

Digital Infrastructure Investment Accelerates

Indonesia is positioning itself as a regional AI and data-center hub through localization pressure, lower land and power costs, and major commitments from Microsoft, DAMAC, and Indosat-NVIDIA. Opportunity is significant, but reliable clean power, water, and governance remain decisive constraints.

Permitting And Regulatory Friction

Finland remains attractive for industrial investment, but permitting complexity and regulatory unpredictability are increasing boardroom concern. Environmental clarification requests, debate over mining and electricity taxation, and wider complaints about policy volatility can slow project execution, capital deployment, and supplier market entry.

Logistics Reform, Persistent Bottlenecks

Transnet’s rail opening to private operators and planned 25-year corridor concessions could improve freight flows, yet current rail-port underperformance still constrains mining, manufacturing and export reliability. High logistics costs and execution risk remain central for investors and supply-chain planners.

Semiconductor Controls Tighten Further

Congress is advancing tighter restrictions on chipmaking equipment exports to China, especially DUV immersion lithography and servicing. The measures could deepen technology decoupling, disrupt multinational electronics supply chains, pressure allied suppliers, and affect capacity, maintenance, and China-linked revenue models.

Tax Reform Implementation Risks

Brazil’s dual VAT rollout began in 2026, replacing five indirect taxes through 2033. While simplification should improve long-term competitiveness, companies face immediate ERP, invoicing and compliance upgrades, with 62.2% still taking over 20 days to register invoices.

Migration tightening affects labour

Planned migration reforms targeting net migration of 225,000, tighter student and temporary-entry rules, and stronger enforcement against worker exploitation could ease housing pressure but also constrain labour availability, increase recruitment costs, and affect education, agriculture, hospitality, and regional employers.

Rupee Volatility and Import Costs

Analysts expect possible rupee depreciation of 5-7%, potentially near PKR290 per dollar by June, as energy imports strain the external account. A weaker currency would raise imported raw material, machinery, and debt-servicing costs across sectors dependent on foreign inputs.

Strong Growth Faces External Shocks

Vietnam’s Q1 GDP grew 7.83%, but inflation reached 4.65% in March and external risks are intensifying. U.S. trade tensions, higher energy costs, and logistics disruption could squeeze manufacturers, weaken demand visibility, and complicate planning for investors and importers.

China Re-engagement Trade Dilemmas

Canada’s renewed commercial opening to China, including eased EV access linked to lower Chinese canola tariffs, creates opportunities but heightens strategic friction with Washington. Businesses face rising geopolitical screening, supply-chain compliance burdens, and potential retaliation affecting autos and advanced manufacturing.

Wage Growth Sustaining Inflation

Rengo’s initial spring wage tally showed a 5.26% average pay increase, the third straight year above 5%. Stronger wages support consumption and inflation persistence, but also increase labor costs, margin pressure, and pricing adjustments across domestic operations.

EU Gas Exit Reshapes Flows

The EU bought 97% of Yamal LNG exports in Q1, taking 69 cargoes worth about €2.88 billion, yet phased restrictions are advancing. Spot-contract bans begin immediately, with broader LNG and pipeline gas prohibitions set by 2027, reshaping regional energy logistics.

Energy Shock Complicates Operations

Middle East conflict and partial disruption around the Strait of Hormuz are pushing up energy, shipping, and fertilizer costs, even as US LNG and crude exports rise. Companies face higher transport and input expenses, especially in chemicals, agriculture, manufacturing, and trade-intensive sectors.

Inflation and Slow Growth Squeeze

Mexico’s macro backdrop is becoming less supportive for business. March inflation accelerated to 4.59%, above target, while analysts highlight weak growth and cautious monetary easing. Rising fuel and food costs could pressure wages, consumer demand, financing conditions and operating margins in 2026.

Oil Windfall Reshapes Incentives

Higher crude prices and narrower discounts have lifted Iran’s oil earnings to roughly $139 million-$250 million daily, despite wartime pressure. Stronger hydrocarbon cash flow improves regime resilience, prolongs volatility, and complicates assumptions about sanctions effectiveness and regional energy-market stabilization.

West Bank settlement escalation

Approval of 34 new West Bank settlements heightens geopolitical, sanctions and reputational risk for foreign companies. The move increases prospects of international scrutiny, compliance complications and stakeholder pressure, especially for firms exposed to infrastructure, finance or land-linked activities in contested areas.

Regional conflict disrupts trade

The Iran-linked regional war and effective Strait of Hormuz blockade have sharply disrupted Saudi trade, halved oil exports in some reports, delayed freight, and hit investor confidence, raising insurance, transport, and business continuity risks across sectors.

Critical Minerals Alliance Expansion

Australia is rapidly deepening critical-minerals partnerships with the US, EU, Japan and France, supported by an A$1.2 billion strategic reserve, 49 mining projects and 29 processing ventures. This could reshape investment flows, export mix, and allied supply-chain positioning.

Buy Canadian Procurement Frictions

Canada’s new procurement rules prioritizing domestic content in contracts above C$25 million are becoming a bilateral flashpoint. The U.S. has flagged the policy as a trade barrier, raising risks for foreign bidders, public-sector suppliers, and firms reliant on integrated North American procurement markets.

Earthquake Recovery Affects Infrastructure

A magnitude 7.3 earthquake near Luganville damaged buildings and disrupted services, while Port Vila’s CBD rebuild and geotechnical works continue. For cruise operators and investors, seismic exposure heightens due diligence needs around port readiness, urban services, business continuity, and reconstruction timelines.

Tax reform transition burdens business

Implementation of Brazil’s dual-VAT reform begins in 2026 and runs through 2033, forcing companies to operate old and new systems simultaneously. Estimates suggest adaptation costs could reach R$3 trillion, affecting ERP upgrades, compliance planning, supplier contracts, pricing structures and logistics models.

U.S. Tariff Exposure Intensifies

Vietnamese exporters face rising U.S. trade risk after a temporary 10% Section 122 surcharge and Section 301 probes targeting overcapacity and labor enforcement. Electronics, apparel and furniture supply chains may need origin controls, tariff engineering and sourcing adjustments.

War-Risk Insurance Market Deepens

New insurance mechanisms are slowly reducing barriers to operating in Ukraine. A PZU-KUKE scheme now covers war, terrorism, sabotage, and confiscation risks, potentially reviving cross-border transport capacity after Polish carriers’ market share on Poland-Ukraine routes fell from 38% in 2021 to 8% in 2023.

Black Sea Logistics Under Fire

Drone attacks on ports, storage sites, and maritime assets are raising freight costs, delaying sailings, and increasing war-risk premiums. This directly affects grain, metals, and bulk exports while forcing companies to diversify shipping routes, inventories, and insurance structures.

U.S. tariff uncertainty exposure

Costa Rica’s heavy dependence on the U.S., which absorbed 47% of exports in 2025, leaves exporters exposed to renewed tariff swings. Despite 14% export growth, sectors including metals, wood and agriculture weakened, sustaining pricing, compliance and market-diversification risks.

Labor Reforms Increase Industrial Friction

Government labor-market reforms have weakened Finland’s traditional consensus model and previously triggered major union strikes. Although aimed at flexibility, the changes increase uncertainty around industrial relations, wage bargaining and operational continuity, especially for exporters, manufacturers, ports, and logistics-dependent businesses.