Digital justice reforms remain uneven

Judicial modernization and expanded magistrates’ court jurisdiction could improve commercial dispute access, but implementation gaps remain significant. A May assessment found only 52.9 percent of stakeholders formally trained on the court system and 97.2 percent reporting access difficulties, limiting near-term efficiency gains for business litigation.

Saudi-France dealmaking accelerates

Riyadh and Paris launched a formal Strategic Partnership Council and announced 21 agreements spanning defense, AI, energy, logistics, transport and finance. Reported deal values include a €6 billion Qiddiya project in France, a €434 million Jeddah terminal contract and €500 million Riyadh metro work.

UK-EU trade reset momentum

London is pursuing a more ambitious UK-EU reset focused on reducing agri-food barriers, expanding economic cooperation, and preparing a summit later this year, offering potential relief for post-Brexit frictions that have cut UK exports to the EU by 12%-16%.

Uncertain 2027 budget trajectory

The government plans to submit the 2027 budget by September 30, targeting a 4.9% deficit versus about 5.0% in 2026. Repeated political delays and minority-government fragility increase uncertainty around taxes, spending programs, procurement, and business-facing fiscal measures.

US tariff shock intensifies

Failed negotiations with Washington triggered 50% US tariffs on roughly $20-28 billion of Canadian goods, with Canada pledging dollar-for-dollar retaliation. The escalation raises cross-border costs, disrupts North American sourcing, and forces exporters to reassess market exposure, pricing, and contract terms.

Market diversification gains urgency

In response to US pressure, Brasília has emphasized defending multilateral channels, opening new markets, and protecting affected sectors through domestic support measures. For international firms, this points to potential shifts in trade routes, partner selection, and government-backed industrial positioning in Brazil.

Immigration Restrictions Shrink US Labor Force

US payrolls declined 23,000 in July as 1.4 million workers exited the labor force over the past year, driven by deportations and visa restrictions. Net-negative immigration creates supply shocks raising costs in construction, healthcare, agriculture, and engineering sectors dependent on immigrant labor.

US-China tariff truce fragility

Washington is preparing a 7.5% Section 301 tariff on Chinese goods, potentially lifting effective second-term tariffs to about 20% before the September 24 Xi-Trump summit and November 10 truce deadline, raising uncertainty for cross-border sourcing, pricing, and investment planning.

Grid expansion delays investment

Germany’s slower power-grid expansion is emerging as a competitiveness constraint, with 160 gigawatts of solar projects reportedly awaiting connection and annual redispatch costs around €3 billion. Delays in permitting and network build-out risk postponing industrial electrification, data-center expansion, and energy-transition investment decisions.

Fuel Levy Protests Escalate

Jamaat-e-Islami has expanded nationwide protests against the petroleum levy, with sit-ins, strike threats and a possible march on Islamabad. For businesses, sustained unrest could disrupt transport corridors, urban distribution, retail activity and workforce mobility while complicating fiscal policy implementation.

Sectoral Trade Disputes Expanding

Beyond headline tariffs, Mexico faces new sector-specific disputes including U.S. anti-dumping duties of 3.37% to 5.28% on Mexican strawberries, signaling a wider pattern of case-by-case trade frictions that can spill into regulatory and legal costs.

North America Trade Bloc Friction

The breakdown in U.S.-Canada talks and new tariffs on Canadian goods increase volatility across North American supply chains. For Mexico, this may improve negotiating leverage with Washington, but also raises the risk of broader regional trade fragmentation.

External financing diversification sought

Pakistan is seeking a possible $10 billion US Exchange Stabilisation Facility while also pursuing longer bilateral maturities and EXIM support. Any progress would strengthen reserves, ease pressure on the rupee and improve payment capacity, affecting importer risk assessments and cross-border financing conditions.

Electronics supply chain expansion

Thailand’s electronics position is strengthening as PCB output is projected to reach US$6.09 billion in 2026, up 20.4% year on year, supported by BOI incentives, new Taiwanese and Chinese capacity, and linked data-centre and cloud investments.

Treasury Stress Raising Capital Costs

U.S. public debt has surpassed $40 trillion, with 30-year Treasury yields recently above 5.3% and annual interest costs around $1 trillion. Higher benchmark rates raise financing costs for companies, pressure valuations, and tighten global credit conditions affecting investment planning.

Russian oil dependency creates vulnerability

Russia supplied 52% of India’s crude imports in July, with import value rising to $8.91 billion from $4.84 billion a year earlier. This dependence supports refinery economics but increases exposure to sanctions, tariff retaliation, and policy-driven market disruptions.

Asia becomes emergency fuel supplier

Russia is importing nearly 270,000 tonnes of refined fuel in August, including gasoline and jet fuel from India, South Korea and Malaysia. This reverses normal trade patterns and increases dependence on Asian counterparties, longer routes and politically exposed procurement channels.

Grid reliability but market transition

Eskom reports operational gains, with energy availability improving to 65% from 55% in 2023 and maintenance-led reliability strengthening. At the same time, private generation growth, regulatory changes and planned open-access reforms are reshaping power procurement options for industry and logistics users.

Rupiah and subsidy risks

The rupiah’s move to Rp17,748 per US dollar has been shaped by Middle East tensions, oil prices and Fed uncertainty, while plans to cut subsidized fuel quotas by 58.5% by 2027 could pressure inflation, household demand and imported-input costs for businesses.

Trade flows shift toward Asia

Despite US tensions, Brazil posted a US$49.04 billion January-July trade surplus, up 31.9%, with exports to China rising 19.7% to US$69.03 billion. The reorientation increases opportunities in Asia but deepens concentration risk around Chinese demand and pricing.

Petroleum Revenue Fiscal Dependence

Pakistan collected Rs1.567 trillion in petroleum levy during FY2025-26, above target, helping deliver a primary surplus despite a Rs4.763 trillion budget deficit. This dependence limits scope for consumer relief and raises risk of abrupt pricing or tax measures affecting logistics, transport and input costs.

Logistics investment despite maritime stress

Saudi Arabia is still expanding trade infrastructure, including CMA CGM’s $434 million Jeddah terminal project adding 2.6 million TEU capacity, signaling continued commitment to logistics-hub ambitions even as regional shipping disruption tests throughput, resilience and terminal utilization.

Industrial Operations Under Strike Risk

Russian missile and drone attacks are hitting industrial and logistics sites beyond ports, including the Zaporizhstal steel plant, which suspended operations after a strike killed seven employees. Businesses face direct asset damage, workforce risk, production interruptions and higher continuity-planning costs.

Critical Minerals Access Leverage

In negotiations with Canada, Washington is seeking greater access to critical minerals alongside broader trade concessions, aiming to reduce dependence on China-linked supply. This strengthens resource-security priorities in US policy and could reshape investment flows in mining, processing, and downstream manufacturing.

Middle East energy price shock

Geopolitical tensions around Iran and the Strait of Hormuz are sustaining high oil-price and inflation concerns, while USD/TRY traded near 48.07. Importers, transport operators and manufacturers face heightened energy, freight and working-capital pressures if regional volatility persists.

Transshipment scrutiny hits exports

Thailand’s inclusion in the White House’s ‘Great Transshipment Scam’ report increases customs, origin-verification, and compliance risks for manufacturers, especially in electronics, machinery, plastics, apparel, and auto parts linked to China-centered supply chains and US-bound shipments.

Alternative Routes Capacity Constraints

Ukraine is shifting cargo toward rail, road, Danube and Moldova-Romania corridors, but these channels remain costlier and materially less scalable than Black Sea ports. Drought has reduced Danube navigability, while rail and trucking constraints are slowing exports and raising supply-chain costs.

Energy shocks worsening costs

Reporting links France’s fiscal and inflation pressures to Middle East conflict, higher oil prices, and risks around the Strait of Hormuz. For companies, this points to renewed exposure to imported energy costs, transport expenses, and margin pressure across manufacturing and logistics chains.

Reciprocity law raises compliance

Brazil’s 2025 Economic Reciprocity Law now provides a formal basis for countermeasures, including import restrictions and suspension of intellectual-property obligations. Even if applied cautiously, the process increases legal and regulatory risk for US-linked firms, licensing arrangements and procurement decisions.

Trade diversification drive intensifies

Brasilia says it will accelerate diversification of trading partners and open new markets to offset US restrictions. For international firms, that may redirect export promotion, partnership opportunities and supply-chain investment toward alternative destinations as Brazil seeks reduced dependence on Washington.

USMCA review and tariff uncertainty

Washington’s decision not to extend USMCA beyond 2036 has opened annual reviews and prolonged uncertainty. Mexico still faces 25% tariffs on autos and 50% on steel and aluminum, complicating investment planning, sourcing decisions, and North American production integration.

Chinese components trigger supply-chain scrutiny

UK defence procurement faces tighter supplier vetting after cameras on Royal Navy-linked drones and unmanned vessels sent “heartbeat” signals to China. Although no breach was found, the incident increases compliance, cyber-audit and sourcing costs, especially for firms using complex third-country electronics components.

CUSMA renewal uncertainty rises

Washington’s refusal to renew CUSMA in its current form and shift toward annual reviews is increasing medium-term policy volatility. Businesses face weaker visibility on rules, market access, and investment assumptions across North American manufacturing, agriculture, logistics, and procurement.

Industrial Policy Favors Downstreaming

Indonesia is doubling down on industrialization, import substitution and deeper downstream processing through its national strategy. Non-oil manufacturing grew 5.32% year-on-year in Q2 2026 and accounted for 18.50% of GDP, reinforcing incentives for local value-add and domestic supply-chain localization.

Gwadar power security under threat

Gwadar’s electricity remains heavily dependent on Iranian imports, with supply shortages reported about 21% of the time in 2024 and 26% in 2025. Geopolitical risks and grid constraints are pushing plans for a local 40MW plant to protect port and industrial operations.

China exposure keeps shrinking

Taiwan’s leadership says investment directed to China fell from 83.8% in 2010 to 3.7% last year, while agricultural exports to China dropped from 20.7% in 2017 to 11.5%, reinforcing diversification and reducing concentration risk for international investors.