Business rates and cost-base squeeze

Spring Statement left many firms facing rising operating costs with limited relief: business rates changes proceed from April, while energy and employment-cost pressures persist. Retail, hospitality and light manufacturing report compressed cash flow, affecting site selection, pricing strategy and investment timing.

Sanctions divergence raises compliance risk

Temporary US easing on Russian oil contrasts with unchanged UK/EU restrictions, creating a ‘two-tier’ sanctions environment. Banks, traders and insurers face higher screening, documentation and legal-risk burdens, especially for energy, shipping and commodity-finance transactions routed through London.

China supply-chain stabilization push

Seoul and Beijing resumed ministerial talks after four years, agreeing hotlines for logistics disruptions, export-control dialogue, and faster treatment for rare earths and magnets. With semiconductors accounting for 26% of bilateral trade, this directly affects sourcing resilience and China operations.

Energy Security Drives Cost Risk

Japan’s dependence on Middle Eastern energy has become a major operational risk: roughly 95% of crude imports and 11% of LNG come from the region. Strait disruptions, offline Qatari LNG capacity, and emergency stockpile releases raise fuel, shipping, and manufacturing costs.

Non-Oil Growth Momentum

The kingdom’s non-oil economy remains a major investment driver, with 2025 GDP growth estimated at 4.5% and Q4 at 5%. Expansion in tourism, logistics, technology, pharmaceuticals, and advanced manufacturing supports demand for services, industrial inputs, partnerships, and regional headquarters.

Sanctions volatility and enforcement risk

Western sanctions remain dynamic, with stepped-up targeting of shipping, insurance and intermediaries. Recent temporary waivers and political disputes over new EU packages increase compliance uncertainty, heightening due-diligence costs, contract risk, and potential secondary-sanctions exposure for traders, banks, and logistics providers.

Critical Minerals And Strategic Industry

Ukraine is positioning critical minerals and related strategic industries as a cornerstone of reconstruction finance and Western partnership. This improves long-term resource investment prospects, but projects remain exposed to wartime security threats, permitting uncertainty, infrastructure constraints, and geopolitical sensitivities.

IMF programme and fiscal tightening

IMF third-review talks continue without a staff-level deal, delaying a roughly $1bn tranche and keeping budget targets contested. Tax shortfalls and a Rs3.15tr primary-surplus goal drive likely spending cuts, affecting demand, procurement and payment risks.

Foreign investment screening tightening

Australia’s FIRB and competition settings are becoming more complex, with longer timelines and higher process risk for minority stakes and sensitive sectors. This raises transaction costs for cross-border M&A and infrastructure deals and elevates the value of early regulatory strategy and deal structuring.

War economy and dual-use controls

Russia’s wartime industrial priorities expand export controls, import substitution and scrutiny of dual‑use items. Suppliers and logistics providers risk enforcement exposure via re‑exports, while domestic buyers prioritize defense needs, crowding out civilian demand and disrupting industrial supply chains.

Sanctions volatility and waivers

Russia’s trade outlook is dominated by evolving US/EU/UK sanctions, including temporary US waivers allowing some already‑loaded crude to reach buyers. This increases compliance uncertainty, raises due‑diligence costs, and can abruptly shift energy flows, pricing and counterparties.

Fed Hold Amid Stagflation Risk

The Federal Reserve kept rates at 3.5%-3.75% as inflation pressures and labor weakness intensified. With February PPI up 3.4% year-on-year and 92,000 jobs lost, businesses face elevated financing costs, cautious demand conditions, and more volatile currency and capital allocation assumptions.

Transparenz- und Beschaffungsrisiken Verteidigung

Zunehmende Geheimhaltung in Rüstungsbeschaffung erhöht Planungs- und Gegenparteirisiken für Zulieferer und Finanzierer. Seit 2024 werden Rüstungsberichte nicht veröffentlicht; seit 17.10.2025 gelten Vertragsdetails als Verschlusssache. Verzögerungen (z.B. F‑35-Lieferungen 2026→2027+) können Kosten- und Terminrisiken verschärfen.

State seizures and property insecurity

Nationalizations and forced asset transfers—illustrated by Domodedovo’s seizure and auction—signal heightened political risk. Foreign residency, “strategic” designations, and prosecutorial actions can trigger expropriation, impaired governance, and limited legal recourse, deterring greenfield and M&A investment.

Antitrust remedies reshape digital platforms

DOJ’s proposed remedies in the Google case—potentially including Chrome divestiture and mandated sharing of search/AI assets—could materially alter digital advertising, distribution, and AI product integration. Multinationals should plan for changing customer acquisition costs, data access, and platform dependencies.

US trade pact reshapes access

New US–Indonesia reciprocal trade pact cuts threatened tariffs from 32% to 19% and grants zero tariffs for key exports. Indonesia offers wider US investment access and fewer mineral export barriers; ratification and US tariff-law uncertainty complicate planning.

Fuel Import Dependence Shock

Middle East conflict has exposed Vietnam’s heavy dependence on imported crude and fuels, with around 88% of crude imports linked to the Persian Gulf. Price spikes, aviation disruptions, and logistics stress raise transport costs, squeeze margins, and complicate supply-chain planning across sectors.

Power Grid Capacity Constraint

Rising electricity demand from data centers, manufacturing, and electrification is straining U.S. grid capacity and raising cost-allocation disputes. Washington launched a $1.9 billion grid-upgrade push, but transmission bottlenecks and higher power prices remain material risks for site selection and operating costs.

Political-security environment and project risk

Security concerns have already disrupted IMF mission travel, underscoring operational risk for staff mobility and project timelines. For infrastructure, mining and CPEC-linked activity, firms face higher security costs, insurance premiums, and force-majeure risks, especially outside major cities.

Green Compliance Reordering Supply Chains

Sustainability standards are becoming a hard market-access issue as EU CBAM rules tighten from 2026 and RE100 pressures expand through multinational supply chains. Around 80% of FDI firms prefer green-energy industrial parks, making low-carbon power and emissions data increasingly decisive for exporters.

Expanded national-security trade tools

Greater reliance on Section 232 national-security tariffs—already covering steel, aluminum, autos/parts—creates spillover risk to pharmaceuticals, medical devices, semiconductors and other “strategic” goods. Multinationals face higher duty exposure, rule-of-origin planning, and lobbying/waiver needs.

Tax reform rollout for IBS/CBS

Implementation of Brazil’s new consumption taxes (IBS/CBS) is still awaiting joint regulation; 2026 is a transitional, largely educational phase. Despite no immediate penalties, firms must adapt invoicing, ERP, and compliance processes to avoid future disruptions and disputes.

US–Taiwan trade pact uncertainty

The US–Taiwan Agreement on Reciprocal Trade (ART) offers tariff relief and favorable semiconductor treatment, but new US Section 301 investigations add policy uncertainty. Exporters should model downside tariff scenarios and anticipate additional documentation, audits, and negotiated market-access tradeoffs.

Lira Volatility and Tightening

Turkey’s lira remains under heavy pressure near 44 per dollar as inflation stayed around 31.5% and policy rates were held at 37%, with funding costs pushed toward 40%. Currency instability raises import costs, hedging expenses, financing risk, and pricing uncertainty for foreign investors.

Energy export expansion vs carbon rules

Energy diversification is constrained by unsettled industrial carbon pricing and methane rules. Canadian Natural paused an C$8.25B oil-sands expansion citing policy uncertainty, while Ottawa-Alberta talks target raising effective carbon price toward C$130/tonne and tying new pipelines to CCS progress. Investment timing remains volatile.

Central bank governance uncertainty

Two vacant Central Bank board seats may remain unfilled for months amid Senate tensions and a Banco Master corruption probe. Markets scrutinize nominees’ perceived political ties. Governance noise can raise risk premia, complicate financing, and sway regulatory predictability.

US trade scrutiny and tariffs

Vietnam’s US surplus hit about US$19bn in Jan 2026; 2025 surplus reached US$178bn, drawing Section 301 scrutiny and transshipment allegations. Potential new duties (up to ~40% in some cases) increase compliance, origin-tracing, and demand-risk for exporters.

Financial markets resilient but volatile

Despite conflict, equity and currency moves can be sharp, affecting hedging and funding. Tel Aviv indices hit records and the Finance Ministry sold 3.3bn ILS bonds with ~20bn ILS demand, yet risk premia can reprice quickly as hostilities evolve and ratings are reassessed.

Tax administration and revenue crackdown

Revenue shortfalls push intensified FBR enforcement, target revisions and policy tightening. Multinationals face higher audit probability, withholding tax complexity, and cash-flow hits from upfront taxes and delayed refunds, raising working-capital needs and compliance costs across supply chains.

Middle East sulfur supply shock

HPAL nickel plants import ~75% of sulfur from the Middle East; Hormuz disruptions risk shortages within 1–2 months of stocks. Sulfur near US$500/ton (+10–15%) raises battery-material costs; alternative sourcing may face logistics constraints and sanctions exposure.

Government transition and policy continuity

Post-election coalition formation is underway, with parliament convening and a new cabinet expected by April and policy statement in May. The transition period can slow approvals and regulatory decisions, while new priorities may reshape incentives, infrastructure execution and sectoral support programs.

Industriekrise und Steuerbasis erodiert

Schwäche in Auto- und Chemiesektor schlägt auf öffentliche Finanzen und Standortpolitik durch. Das Finanzministerium meldete für Januar 2026 einen 79% Einbruch der Körperschaftsteuer ggü. Vorjahr; Kommunen spüren sinkende Gewerbesteuer. Erwartbar sind Konsolidierungsdruck, Reformdebatten und potenziell höhere Abgaben.

Semiconductor export controls spillover

Tightening US controls on advanced AI chips and licensing uncertainty are reshaping demand and allocation at Taiwan’s foundries and packaging ecosystem. Firms face compliance complexity, potential order volatility, and constraints on China-related sales, affecting electronics supply chains globally.

Monetary policy and oil-driven inflation

Bank of Canada policy sits around 2.25% amid weak growth signals and volatile energy prices tied to Middle East conflict risks. Rate-path uncertainty affects CAD, financing costs, and project hurdle rates, while higher fuel and freight inputs can raise operating costs across supply chains.

Energy policy intervention and pricing

Brazil is intervening in fuel markets via subsidies and export levies, while power auctions face legal and cost challenges (capacity reserve tender disputes). Policy uncertainty affects energy-intensive industries, power purchase agreements, and investment timing across oil, gas, and electricity supply chains.

China-centric trade dependence and leverage

Sanctions have pushed Iran to route over 80% of exports—especially crude—to China, creating concentrated demand and political leverage. For international firms, this increases exposure to China-linked compliance and pricing dynamics, while limiting Iran’s access to technology, finance and investment needed for stable output.