Shipbuilding Expansion and Tariffs

Korean shipbuilders are expanding overseas capacity, including Hanwha’s Philadelphia yard, while seeking U.S. tariff relief on steel and parts. Strong vessel ordering supports exports, but material tariffs, labor costs and permitting constraints could affect margins and delivery schedules.

Trade Policy and Protectionism

Business groups are urging ministers to 'trade more, not less' as global tariff pressures rise. The UK is advancing deals with India, the EU and the US, yet tighter steel quotas and 50% over-quota tariffs increase input risk.

U.S. Dependence on Canadian Resources

Despite bilateral tensions, the United States remains deeply reliant on Canadian inputs, importing about 3.9 million barrels per day of crude in 2025 plus major volumes of gas, electricity and potash. This sustains Canada’s leverage but also politicizes resource-linked trade flows.

Transport and Fuel Protest Risks

French hauliers and farmers have staged blockades and slow-roll protests over diesel costs, with fuel representing up to 30% of trucking operating expenses. Disruptions around Lyon, Paris, and regional corridors highlight near-term risks to domestic deliveries and cross-border supply chains.

Housing Stimulus Targets Construction

Federal-provincial action in Ontario is extending the 13% HST rebate on new homes and condos to all buyers for one year. Officials estimate 8,000 additional housing starts, 21,000 jobs and CAD$2.7 billion in growth, supporting construction, materials and related services demand.

Oil Export Infrastructure Disruptions

Ukrainian strikes, pipeline damage, and tanker seizures have temporarily halted about 40% of Russia’s oil export capacity, roughly 2 million barrels per day. The outages at Primorsk, Ust-Luga, Novorossiysk, and Druzhba raise delivery, insurance, and price risks across energy-linked trade.

Rare Earth Supply Risks

China’s control over rare earths remains a major chokepoint. Permanent magnet exports to the US fell 22.5% year on year to 994 tonnes in January-February, while aerospace and semiconductor users still report shortages, elevating inventory, procurement and diversification pressures.

Suez Canal Revenues Remain Depressed

Regional conflict continues to divert shipping from the Suez Canal, with traffic reported at only 30–35% of pre-crisis levels and revenue losses estimated near $10 billion. Persistent rerouting undermines Egypt’s foreign-exchange earnings, logistics confidence, and maritime services ecosystem.

Regional war and ceasefire

Israel’s conflict environment remains the dominant business risk. Gaza reconstruction is still stalled pending Hamas disarmament, while the wider Iran-linked escalation keeps investors cautious, disrupts planning horizons, and sustains elevated security, insurance, and counterparty risk across trade and operations.

Export Market Rebalancing Trends

Exports to China rose 64-65% and to the United States 47.1% in March, while shipments to ASEAN and the EU also increased. The Middle East, however, fell 49.1%, underscoring the need for geographic diversification and more resilient route and customer planning.

Red Sea Shipping Risk

Renewed Houthi threats to Red Sea traffic could again disrupt the Bab el-Mandeb–Suez corridor, which carries roughly 12% of world trade. For Israel-linked supply chains, this implies longer transit times, higher war-risk premiums, costlier energy inputs, and more volatile delivery schedules.

China Demand Deepens Dependence

Chinese imports of Brazilian soy rose 82.7% year on year to 6.56 million tons in January-February, while US-origin flows slumped. The shift supports Brazilian export volumes but increases concentration risk, bargaining asymmetry, and exposure to Chinese sanitary, customs, and geopolitical decisions.

Oil Shock External Vulnerability

Middle East conflict has sharply raised Pakistan’s exposure to imported energy, freight and insurance costs. With 81.6% of energy imports transiting Hormuz, sustained oil above $100 could widen trade deficits, lift inflation, disrupt manufacturing inputs and pressure foreign-exchange reserves.

Industrial Competitiveness Erodes

Germany’s export model is under sustained strain from high energy, labor, tax, and regulatory costs. Its share of global industrial output has fallen to 5%, while companies report job losses, weak capacity utilization, and widening pressure from lower-cost international competitors, especially China.

Fuel Imports Threaten Logistics

Brazil remains dependent on imported diesel for roughly 25% to 30% of monthly demand, leaving freight-intensive supply chains exposed when global prices spike. Higher fuel costs directly affect trucking, agricultural exports, inland distribution, and margins across consumer and industrial sectors.

Nuclear Expansion Faces EU Scrutiny

The European Commission is investigating French state aid for EDF’s six-reactor EPR2 program, estimated at €72.8 billion. The review could delay investment decisions, affect long-term power pricing, and shape France’s industrial competitiveness and energy security outlook.

USMCA Review and Tariff Risk

Canada’s July USMCA review is clouded by resumed U.S. sectoral tariffs and new Section 301 probes. With 76% of Canadian goods exports historically going to the U.S., trade uncertainty is delaying investment, hiring, and cross-border production decisions.

Industrial Competitiveness Erosion Deepens

Germany’s export-led model is under heavy strain as industrial output weakens, firms lose over 10,000 jobs monthly, and competitiveness deteriorates under high energy, labor, tax, and regulatory costs, reducing Germany’s ability to capture global demand and complicating investment planning.

Weak Domestic Economy Limits Demand

Finland’s recovery remains subdued, with forecasts around 0.5%-0.9% growth, unemployment near 10%, and public deficits approaching 4% of GDP. For international firms, weak household spending and cautious corporate activity may constrain near-term sales, hiring plans, and expansion assumptions.

Danantara Governance Investment Risk

The sovereign fund Danantara is expanding rapidly but faces scrutiny over governance, political interference and capital allocation. It has deployed $1.4 billion into Garuda, $295 million to Krakatau Steel, and targets $14 billion this year, affecting investor confidence and state-partner opportunities.

Port resilience amid targeting

Ports remain operational but strategically exposed. Haifa has featured in Iranian strike claims, while Ashdod reported strong 2025 performance despite prolonged conflict, with revenue up 17% to NIS 1.232 billion. Businesses should assume continued maritime continuity, but under persistent security and disruption risk.

Tax Reform Implementation Transition

Brazil’s tax overhaul is entering operational testing in 2026, with CBS beginning in 2027 and IBS transition from 2029. Companies must adapt invoicing, pricing, supplier structures, and credit recovery processes as cumulative taxes are replaced by a VAT-style system.

Energy Licensing Judicial Uncertainty

A federal court suspension of Petrobras’ Santos Basin pre-salt Stage 4 license affects a project involving 10 platforms and 132 wells. The case highlights how judicial and environmental scrutiny can delay large investments, complicating timelines for energy suppliers and contractors.

Reserves Defense and Intervention

Turkey’s central bank is using an expanded defense toolkit, including tighter liquidity, state-bank FX intervention, and possible gold-for-currency swaps. With gold reserves around $135 billion and reported Treasury sales, reserve management now materially affects capital flows, sovereign risk perceptions, and market liquidity.

China Soy Trade Frictions

Brazil is negotiating soybean inspection rules with China after phytosanitary complaints disrupted certifications and slowed shipments. March exports still hover near 16.3 million tons, but tighter inspections, vessel delays and added port costs expose agribusiness supply chains to regulatory friction.

Middle East Shock Transmission

Pakistan remains highly exposed to Middle East conflict through oil prices, freight rates, insurance premia, and tighter financial conditions. The IMF warns these pressures could weaken growth, inflation, and the current account, while airlines and exporters already face surcharges, route suspensions, and rising operating costs.

Patchwork AI Rules Face Reset

The White House is pressing Congress for a single national AI framework to preempt divergent state laws, while also easing permitting and encouraging regulatory sandboxes. The outcome will influence compliance burdens, data-center siting, intellectual-property treatment, and technology investment decisions.

Energy Import Vulnerability Deepens

Turkey imports about 90% of crude oil and 99% of natural gas, leaving it highly exposed to Middle East disruptions. Oil above $95-$100 raises the import bill, inflation, and current-account pressure, weakening margins for manufacturers, transport operators, and energy-intensive supply chains.

Energy Price Shock Exposure

Middle East tensions and Strait of Hormuz disruption have lifted imported fuel costs, pushing March inflation to 7.3% and threatening Pakistan’s current account. Importers, manufacturers and transport-heavy sectors face higher operating costs, tighter margins and renewed exchange-rate volatility risks.

Energy Shock Revives Inflation

Middle East conflict-driven oil and gas increases pushed March inflation to 1.7% year on year from 0.9%, with energy prices up 7.3%. Rising fuel, transport, electricity, and industrial input costs threaten margins, logistics planning, and consumer demand.

Growth Downgrades and Funding Costs

Banks and analysts are revising Turkey’s outlook toward slower growth and tighter financial conditions, with one forecast cutting 2026 growth to 3.2% from 4.2%. Higher borrowing costs, weaker external demand, and bond outflows may delay expansion, M&A, and capital-intensive investment plans.

Shadow Fleet Maritime Risk

Russia is expanding opaque tanker and LNG shipping networks to bypass restrictions, including false-flag vessels and sanctioned carriers. This raises counterparty, insurance, port-access, and enforcement risks for traders, shipowners, and banks exposed to Russian cargoes or adjacent maritime routes.

Tax and Customs Rules Simplify

Authorities introduced new tax facilitation measures, faster VAT refunds, SME incentives, and exceptional customs treatment for disrupted export shipments. These reforms should ease compliance and clearance burdens, improve liquidity, and support exporters navigating volatile regional shipping conditions and supply-chain interruptions.

Non-Oil Export Growth Surge

January non-oil exports including re-exports rose 22.1% year on year to SR32.57 billion, led by machinery and electrical equipment. The growth supports diversification, but falling national non-oil exports excluding re-exports shows underlying industrial depth remains uneven for long-term trade planning.

Industrial Energy And Infrastructure Strain

Iran’s economy is under mounting pressure from damaged infrastructure, domestic energy shortages, and chronic underinvestment. With oil, gas, water, and transport systems under stress, manufacturers and logistics operators face higher outage risk, lower productivity, and rising maintenance or sourcing costs.

Digital regulation and data flows

US scrutiny of Korean digital rules is rising alongside domestic privacy reforms on cross-border data transfers. With over 65% of AmCham survey respondents calling regulation restrictive, platform governance, mapping data, and AI data rules could materially affect tech, cloud, and e-commerce firms.