Semiconductor industrial policy surge

Tokyo is deepening state support for domestic chips: Rapidus received ¥267.6bn new funding, with government taking 11.5% voting rights plus a golden share, and targeting 2nm production by 2027—reshaping supplier opportunities and security screening.

Foreign interference and China tensions

Australia has charged Chinese nationals with ‘reckless foreign interference’, underscoring heightened security scrutiny of China-linked activity. This sustains bilateral relationship fragility, increasing reputational and compliance burdens for China-exposed businesses, especially in sensitive tech and data.

Market-opening, agri SPS politics

The US-Taiwan deal envisages broad tariff cuts on US goods and reduced non-tariff barriers, while Taiwan protects sensitive agriculture (e.g., 27 items kept tax-free). Importers/exporters should anticipate evolving SPS rules, labeling, and sector-specific compliance burdens in food and retail.

US tariff reset uncertainty

US policy shifts replaced Thailand’s prior 19% reciprocal tariff with a temporary 10% Section 122 duty for 150 days from Feb 24. Authorities expect more product-by-product actions (Sections 232/301) and tighter origin checks, complicating pricing, compliance, and investment planning.

War-driven FX and rates

Regional conflict triggered heavy FX intervention (about $12B in one week) and emergency liquidity tightening; overnight rates neared 40% and repo auctions were suspended. Expect higher hedging costs, payment volatility, and tighter working-capital conditions for importers and leveraged firms.

Energy security and clean-power reform

Power availability remains a binding constraint for factories, while Vietnam is rebooting direct clean-power purchase mechanisms and accelerating LNG and grid projects. Large energy users may gain better access to renewable supply, but should plan for price volatility, curtailment, and permitting risk.

Semiconductor export controls spillover

Expanding US-led export controls on advanced AI chips and related tooling can reshape demand, licensing timelines, and customer eligibility, indirectly impacting Taiwan foundries and packaging. Multinationals should reassess China-linked revenue, product segmentation, and compliance across global sales channels.

Energy price pass-through inflation

Oil and LNG price spikes quickly feed Korea’s power and industrial costs; LNG is ~28% of electricity generation. Higher JKM and crude-indexed contracts can lift wholesale power prices and strain Kepco/Kogas finances, increasing probability of tariff hikes and cost-push inflation.

High-tech supply-chain sensitivity

Israel’s semiconductor and photonics ecosystem is benefiting from AI demand, yet geopolitical shocks can trigger order reallocation and supplier risk reviews. Multinationals should assess single-site dependencies, export-control exposure, and continuity plans for critical components.

Attractivité et incertitude politique 2027

Climat d’investissement fragilisé par instabilité politique et débats fiscaux. Baromètre AmCham/Bain: moins d’un tiers des investisseurs américains jugent la perception du pays positive; 41% anticipent une dégradation sectorielle. Les perspectives 2027 accroissent le risque de volatilité réglementaire.

Growing IT and services exports

IT exports rose ~20% YoY to $2.6bn in 7MFY26, with FY26 targets of $4.5–$5bn. This supports FX earnings and creates opportunities in outsourcing, fintech, and digital infrastructure, while requiring clearer regulation, payments reliability, and data/security compliance.

Currency stability and tighter finance

Bank Indonesia is prioritizing rupiah stability over growth, holding the policy rate around 4.75% and signaling sizable FX intervention amid foreign outflows and rating/market concerns. Higher funding costs and volatility affect capex timing, import pricing, hedging, and repatriation strategies.

Data, privacy and AI compliance

The Data (Use and Access) Act 2025 and wider online safety/AI initiatives reshape UK data governance and enforcement expectations. Multinationals must reassess lawful basis, complaints handling, cross-border data flows and vendor controls, with compliance costs affecting digital service scaling.

Rail and mega-infrastructure push

Vietnam is reorganising Vietnam Railways into a national railway group to execute major corridors, including North–South high-speed rail, with charter capital projected ~VND 32.41 trillion (2026–2030). Large urban projects in Ho Chi Minh City also accelerate, improving supply-chain connectivity but raising execution and land risks.

Expanding U.S. trade remedies

After U.S. courts constrained emergency tariffs, Washington is pivoting to Section 122, 232 and 301 tools. Canada faces risk of wider sector probes (e.g., aircraft, agriculture, digital services) and additional compliance burdens, increasing volatility for cross-border contracts and logistics.

Hormuz shock, energy imports risk

Strait of Hormuz disruption and US sanctions dynamics are reshaping India’s crude/LPG sourcing. India imports ~88–90% of oil; ~40–50% transits Hormuz. A US 30‑day waiver enabled Russian cargo offload, raising compliance and price volatility risks.

Cybersecurity and digital resilience pressure

Taiwan faces persistent cyber threats targeting critical infrastructure and corporate networks, raising compliance and operational resilience requirements for multinationals. Expect tighter security expectations in procurement and incident reporting; firms should align SOC capabilities and third-party risk controls.

Sectoral tariffs on autos, steel

Autos and steel remain prime targets under US national-security tools. Korean automakers already absorbed about 7.2 trillion won in tariff costs last year, while steel faces elevated duties. Firms are accelerating North American sourcing and onshore capacity to protect market access.

Defense spending and mobilization effects

Taiwan plans higher defense outlays (discussions of surpassing 3% of GDP by 2026) amid political budget frictions. Increased procurement can benefit aerospace, cyber, and dual-use sectors, but may tighten labor markets, alter regulations, and elevate continuity planning needs.

Trade deficits, taxes and fiscal pressure

Wartime budgets remain defense-heavy (71% of 2025 spending; $39.2bn deficit), with debt projected above 100% of GDP in 2026. Revenue measures (excises, bank taxes, entrepreneur VAT thresholds) can alter consumer demand, pricing and payroll economics.

Housing Debt and Credit Tightening

Seoul home prices have risen for extended periods, prompting tighter lending rules, limits on multi-home-owner refinancing/rollovers, and potential higher property taxes. Credit conditions can affect consumer demand, retail, construction, and bank risk appetite for corporate lending.

EU unity crisis weakens predictability

EU member states struggled to agree on a joint response, with national divergences on legality and support for Washington. For investors, this raises uncertainty over EU regulatory reactions, emergency trade measures, and coordinated maritime-security posture affecting operations.

ANPD vira agência reguladora forte

A ANPD ganhou status de agência reguladora, com mais autonomia para normatizar e fiscalizar a LGPD e o “ECA Digital”. A mudança tende a elevar exigências de governança de dados, incident response e compliance, com impacto direto em plataformas, e-commerce e BPOs.

Power-grid upgrades for EEC growth

Electricity transmission constraints in the Eastern Economic Corridor are being addressed through Egat’s 31bn baht upgrades, raising transfer capacity to 1,150MW from 600MW. With BOI projecting 16 new data centers needing ~3,600MW (2026–2030), grid readiness and clean-power access shape project timelines.

Baht volatility and hedging pressure

The baht is experiencing high volatility driven by USD moves, gold-price swings, capital flows, and domestic politics. Banks warn SMEs hedging only ~50% of FX liabilities may be insufficient amid 7–8% volatility; BOT intervention nears 1.8–1.9% of GDP, nearing scrutiny thresholds.

Energy supply and gas export volatility

Security assessments can halt offshore gas production (e.g., Leviathan/Energean), tightening domestic power margins and affecting gas exports to regional buyers. Industrial users may face fuel switching, price volatility, and contractual disputes, complicating energy‑intensive manufacturing and investment planning.

Rate-cut cycle amid sticky services

UK CPI eased to 3.0% in January (from 3.4%), while services inflation stayed elevated at 4.4%. Markets anticipate Bank of England cuts from 3.75%, affecting GBP volatility, financing costs, consumer demand and valuation assumptions for UK acquisitions and project investment decisions.

External financing and rollover risk

Short-term external debt is about $225.4B due within a year, exceeding gross reserves near $211.8B; swap-excluded net reserves are far lower (~$81.6B). Turkey remains reliant on steady capital inflows, making corporates sensitive to global risk-off episodes and refinancing costs.

FDI-led manufacturing expansion cycle

FDI remains the main growth engine, with 2025 registered FDI at US$38.4bn and disbursed US$27.62bn; January 2026 disbursement rose 11.3% YoY. Electronics/semiconductors clusters are deepening, benefiting suppliers but raising concentration and wage-competition risks.

Energy costs and grid constraints

Energy bills are easing but UK power prices remain sensitive to gas-linked marginal pricing and network constraints. Grid connection queues and infrastructure upgrades influence industrial siting and operating costs, pushing energy-intensive firms toward PPAs, self-generation and resilience planning.

External Buffers, Rupee Hedging Pressure

Forex reserves hit a record about $723.8bn, with gold around $137.7bn, giving RBI scope to smooth volatility via swaps and spot intervention. Yet tariff shocks and import costs can drive INR swings, increasing hedging, pricing and working-capital needs for multinationals.

Broadening sanctions compliance burden

Expanded “maximum pressure” sanctions, including new designations against Iran’s shadow fleet and facilitators, raise exposure to secondary sanctions, shipping disruptions and banking de-risking. Energy, maritime, commodities and trade-finance players need tighter screening, routing controls, and contract clauses.

Rising political instability risk premium

Government reliance on decrees and recurring no-confidence motions, alongside a credible National Rally path to power, elevates policy reversal risk. Businesses face higher regulatory uncertainty across energy, migration, and industrial policy, complicating stakeholder management, permitting, and long-term contracts.

USMCA review and North America rules

A 2026 USMCA review is positioned as conditional, with U.S. pressure on Mexico/Canada over dairy access, energy, labor enforcement, and origin rules. Outcomes could shift regional sourcing strategies, automotive and agri-food flows, and investment decisions tied to tariff-free access.

Industrial relations tightening pressures

Mining majors warn expanded union powers are raising operational friction (BHP cites 400% rise in right-of-entry requests) and could deter capital spending. International operators should model productivity impacts, bargaining complexity and labour-hire cost pass-through.

BOJ tightening and yen volatility

Bank of Japan policy normalization is driving sharp USD/JPY swings and periodic intervention risk near 160. Higher rates lift funding costs, reprice real estate and equities, and alter hedging, pricing, and procurement strategies for importers and exporters.