Suez Canal security normalization

Container lines are cautiously returning to Red Sea/Suez transits after the Gaza ceasefire and reduced Houthi attacks, but reversals remain possible. Canal toll incentives and volatile insurance costs affect routing, freight rates, lead times, and inventory planning.

Rising wages and labor tightness

Regular wages rose 3.09% in 2025 to NT$47,884, with electronics overtime at 27.9 hours—highest in 46 years—reflecting AI-driven demand and labor constraints. Cost inflation and capacity bottlenecks may pressure contract terms, automation capex, and talent retention strategies.

China overcapacity and de-risking

EU’s goods deficit with China widened to €359.3bn in 2025 as imports rose 6.3% and exports fell 6.5%. German firms weigh deeper China engagement amid IP and security risks, while Beijing’s export controls and subsidised competition threaten EU-based production.

Reconstruction pipeline and procurement governance

Large donor-funded rebuilding is expanding tenders via platforms such as Prozorro, but governance and integrity scrutiny remains high. Contractors must prepare for stringent audits, beneficial-ownership transparency, ESG requirements, and delays linked to security conditions and permitting constraints.

Critical minerals leverage and reshoring

U.S. policy increasingly links trade and security to critical minerals and domestic capacity. Officials explicitly frame rare earths and magnets as weaponized supply points, reinforcing incentives for reshoring and allied sourcing, and pressuring firms to redesign inputs and secure non-China supply alternatives.

Energy tariffs and circular-debt risk

Power pricing, gas availability, and circular-debt reforms directly affect industrial competitiveness. Recent tariff cuts for industry may support exports, but ongoing sector restructuring implies continued volatility in energy costs, outages, and subsidy policy—key variables for manufacturing site selection and contracts.

Energy security via long-term LNG

With gas about 60% of Thailand’s power mix and domestic supply shrinking, PTT, Egat and Gulf are locking in 15-year LNG contracts (e.g., 1 mtpa deals) to reduce spot-price volatility. Electricity tariff stability supports manufacturing, but contract costs and regulation remain key.

China decoupling in high-tech

Stricter export controls, higher chip tariffs and conditional exemptions tied to U.S. fab capacity reshape electronics, AI infrastructure and China exposure. Firms face redesign of product flows, licensing risk, higher component costs, and pressure to localize critical semiconductor supply chains.

Tech export controls enforcement surge

Washington is tightening and actively enforcing semiconductor and AI-related export controls, illustrated by a $252m settlement over alleged post-Entity-List tool exports to China’s SMIC. Multinationals face higher compliance costs, licensing delays, and heightened penalties for third‑party diversion.

Tech industrial policy and AI compute

The UK is pushing advanced computing and semiconductor capability. Fractile plans £100m investment over three years, including a Bristol engineering and test facility, underscoring incentives and procurement focus. Opportunities rise for R&D, but export controls, talent scarcity, and funding selectivity shape market entry.

Trusted cloud, data sovereignty requirements

France is accelerating ‘cloud de confiance’ policies (SecNumCloud) for sensitive data and public-sector workloads, encouraging shifts away from non‑qualified providers. Multinationals face procurement constraints, data‑hosting redesign, vendor selection changes, and potential localization-related compliance costs.

AI hardware export surge and tariffs

High-end AI chips and servers are driving trade imbalances and policy attention; the U.S. deficit with Taiwan hit about US$126.9B in Jan–Nov 2025, largely from AI chip imports. Expect tighter reporting, security reviews, and shifting tariff exposure across AI stacks.

Energy exports and regional gas deals

Offshore gas production and export infrastructure expansion (Israel–Egypt flows at capacity; Cyprus Aphrodite unitisation talks) underpin regional energy trade. However, operational pauses and political risk can disrupt supply commitments, affecting industrial buyers and energy-intensive sectors.

US–Taiwan tariff pact reshapes trade

A new reciprocal US–Taiwan deal locks a 15% US tariff on Taiwanese imports while Taiwan removes or cuts about 99% of tariff barriers and tackles non-tariff barriers. It shifts pricing, compliance, and market-access assumptions across autos, food, pharma, and electronics.

Suez Canal security-driven volatility

Red Sea risks remain a first-order supply-chain variable. After a Gaza ceasefire, Suez revenues rose 24.5% and major carriers began returning with naval assistance. Any renewed attacks could again divert vessels around Africa, extending transit times and raising costs.

Escalating Taiwan Strait grey-zone risk

China’s sustained air and naval activity and blockade-style drills raise probabilities of disruption without formal conflict. Firms face higher marine insurance, rerouting and inventory buffers, plus heightened contingency planning for ports, aviation, and regional logistics hubs.

Talent constraints and migration policy

Hiring plans across strategic industries and demographic pressures are tightening labour markets, increasing competition for engineers, welders, and software/AI profiles. Evolving immigration tools (e.g., Talent Passport thresholds and rules) influence workforce planning, relocation costs, and project delivery risk.

Energy grid strikes and shortages

Repeated attacks on power and gas infrastructure drive outages, emergency repairs, and import needs. Naftogaz cites at least €3 billion in damage and over €900 million equipment needs; businesses must plan for backup power, heating disruptions, and production downtime during winters.

War-driven fiscal and budget shifts

The 2026 budget prioritizes defense (about NIS 112bn) amid elevated security needs, with deficit targets still high. This can crowd out civilian spending, affect taxes/regulation, shape procurement opportunities, and influence sovereign risk and project pipelines.

Electricity grid reform uncertainty

Eskom’s revised unbundling keeps transmission assets inside Eskom, limiting the new TSO’s ability to raise capital for urgent grid expansion. Business warns this policy “U-turn” could prolong grid constraints, delay renewables connections, and revive supply insecurity for operations.

Fiscal tightening and sovereign risk

France’s 2026 budget continues consolidation, shifting costs onto sub‑national governments (≈€2.3bn revenue impact in 2026) and sustaining scrutiny after prior sovereign downgrades. Higher funding costs can pressure public procurement, infrastructure timelines, and corporate financing conditions.

Ports and rail recovery, still fragile

Transnet reports improving port performance and rail volumes rising toward ~168Mt by March 2026, with private operators gaining route access and Durban Pier 2 run privately. However, general freight corridors lag, bottlenecks persist, and service reliability remains a supply-chain constraint.

Fiscal slippage raises funding costs

Breaches of the 2025 spending cap and widening deficits are pushing gross debt higher (about 78.7% of GDP) and inflating “restos a pagar” (R$391.5bn). Markets may demand higher risk premia, increasing hedging, financing and project-delivery risk.

PIF reset and reprioritization

The $925bn Public Investment Fund is resetting its 2026–2030 strategy, scaling back costly mega‑projects and prioritizing industry, minerals, AI, logistics and tourism. Expect shifts in procurement pipelines, partner selection, timelines, and more emphasis on attracting global asset managers.

Rising resource nationalism enforcement

Pengetatan pengawasan SDA dan penertiban izin meningkatkan ketidakpastian kontrak serta risiko intervensi negara. Pemerintah disebut menyita jutaan hektare aset tambang/perkebunan dan menagih denda besar (mis. potensi denda Weda Bay ~Rp3 triliun). Investor menghadapi risiko perizinan, kepatuhan lingkungan, dan stabilitas aset.

Nickel governance and reporting gaps

Regulators disclosed a major Chinese-linked nickel smelter failed to submit mandatory investment activity reports, weakening oversight of capital, production, taxes, and environmental compliance. This heightens governance and ESG due-diligence needs for counterparties in Indonesia’s nickel downstreaming ecosystem.

Sanctions escalation and compliance risk

EU’s proposed 20th package shifts from a price cap to a full maritime-services ban, adds banks, refineries, and 43 more tankers (640 total). Secondary-sanctions exposure, KYC burdens, and contract enforceability risks rise for traders, shippers, insurers, and financiers.

Outbound investment screening expansion

U.S. controls on outbound capital and know-how—particularly toward China-linked advanced tech—are widening. Multinationals must map covered transactions, restructure joint ventures, and adjust funding routes to avoid penalties, potentially slowing cross-border R&D, venture investment, and supply-chain partnerships in dual-use sectors.

Energy export diversification projects

Canada is accelerating west-coast export optionality, including proposals for an Alberta-to-Pacific crude line and expansion of export routes. This could reshape long-term offtake, shipping, Indigenous partnership requirements, and permitting timelines for investors.

RBA tightening and persistent inflation risk

The RBA lifted the cash rate to 3.85% as core inflation re-accelerated and capacity pressures persisted. Higher financing costs and a stronger AUD can affect valuations, capex and consumer demand, while raising hedging needs for importers/exporters and tightening credit conditions across supply chains.

Energy import dependence and LNG

Taiwan’s tight energy margins and heavy LNG reliance create acute vulnerability to maritime disruption. Under the U.S. deal, Taiwan plans US$44.4B LNG/crude purchases through 2029, underscoring strategic stockpiling, grid upgrades, and potential cost volatility for industry.

Secondary pressure on Iran trade

Expanded maximum-pressure measures—new sanctions on Iran’s oil/petrochemical networks and proposals for broad punitive tariffs on countries trading with Iran—raise exposure for shippers, insurers, banks, and traders, increasing due‑diligence costs and disrupting energy and commodity logistics routes.

Monetary policy and dollar volatility

Cooling inflation (CPI 2.4% y/y in January; core 2.5%) is shifting expectations toward midyear Fed cuts. Rate and FX swings affect working capital, hedging, and investment hurdle rates, while tariff-driven relative price changes alter import demand and margins.

Water scarcity and failing utilities

Water system deterioration is a growing operational hazard, especially in Gauteng and major metros. National repair backlog is estimated near R400bn versus ~R26bn budgeted for 2025/26; outages affecting millions raise business-continuity costs and heighten ESG and social risk.

Fiscal tightening and tax risk

War-related spending pressures and a higher deficit underpin expectations of fiscal consolidation. IMF recommendations include raising VAT and minimum income tax rates and cutting exemptions, implying higher operating costs, price pass-through challenges, and possible shifts in incentives for investment and hiring.

War economy, fiscal pressure, interventionism

Russia’s war economy features high state direction, widening deficits, and elevated inflation/interest rates (reported 16% policy rate). Authorities may raise taxes, impose administrative controls, and steer credit toward defense priorities, increasing payment delays, contract renegotiations, and operational unpredictability for remaining investors.