Iran domestic economic deterioration

Recent reporting indicates severe strain inside Iran, including gasoline shortages, bank-run fears, food-price inflation reportedly above 130%, and stalled imports. For foreign businesses, worsening macro instability raises payment delays, contract performance risks, labor stress, and unpredictability in local operating conditions.

Trade conflicts hit competitiveness

German manufacturers, especially automakers, increasingly cite tariffs, geopolitical tensions, and wars as direct pressures on profitability and plant economics. Volkswagen says these trade frictions are undermining the historic model of producing in Europe and selling globally.

Trade-security rules broaden compliance

US trade policy is increasingly framed around national security, spanning metals, semiconductors and defence-linked inputs. Companies face a more interventionist regulatory environment where tariffs, sourcing restrictions and export rules can rapidly alter cost structures, investment cases and resilience planning across sectors.

EU clean investment partnership

The EU and South Africa have launched implementation talks on their Clean Trade and Investment Partnership, covering green hydrogen, critical raw materials, renewable power and grid expansion. With €45 billion in 2025 trade and over 40% of FDI, execution matters greatly.

Tariffs as negotiating leverage

Recent USTR actions show tariffs being used explicitly to force policy concessions on market access, digital regulation, critical minerals, and labor-related rules. This increases regulatory unpredictability for firms exposed to U.S. trade talks, especially where commercial disputes overlap with geopolitical objectives.

US-Vietnam Trade Talks Stalled

Negotiations to finalize a bilateral trade framework have become tense, with disagreements over transshipment rules and non-tariff barriers. Prolonged uncertainty complicates investment planning, sourcing decisions, and long-term export commitments for businesses dependent on stable Vietnam-US market access.

Western China Investment Outreach

Thailand used the Sichuan investment forum and a new Board of Investment office in Chengdu to broaden promotion in western China. This targeted outreach may attract fresh capital in artificial intelligence, advanced technology and precision industries beyond Thailand’s traditional investor base.

Selective DHE exemptions shape flows

Indonesia exempted the US, China, Canada, and Australia from parts of the DHE banking requirements because of bilateral arrangements. The carve-outs may redirect financing and banking choices for commodity exporters, while the policy itself will be reviewed again in mid-September.

Foreign firms face tougher enforcement

Recent cases indicate stricter Chinese enforcement against perceived export-control circumvention. Japanese executives were warned that rare-earth and dual-use controls are tightening, with arrests tied to alleged export violations and a new reporting hotline, increasing operational, legal, and staff-security concerns for companies on the ground.

Energy infrastructure under attack

Ukrainian strikes on refineries, depots, export terminals and tankers have cut Russian refining capacity by roughly one-fifth to one-quarter, disrupted domestic fuel supply and raised repair challenges under sanctions, materially increasing operational volatility for exporters, manufacturers and transport-dependent businesses.

Gas Export Tax Debate Intensifies

Labor faces internal pressure to revise taxation of LNG exports, including proposals for a 25% export tax estimated to raise A$17 billion annually. Although government rejects immediate change, the debate heightens fiscal-policy uncertainty for energy investors and long-term supply contracts.

Pharmaceutical Reshoring Tariffs Threaten Drug Supply

Trump announced phased tariffs on generic drugs—0% for two years, then 100% by 2028 and 200% thereafter—to force manufacturing reshoring. India, supplying 40% of US generics by volume ($9.7 billion), faces major disruption. Companies have a narrow window to relocate production.

BOJ tightening lifts financing costs

With the Bank of Japan expected to keep rates at 1% but signaling stronger growth and persistent inflation risks, businesses face a changed funding environment as bond yields rise, affecting borrowing costs, valuation models, capital spending and foreign-exchange hedging decisions.

Semiconductor investment regionalization accelerates

TSMC’s extra $100 billion U.S. commitment, lifting planned U.S. investment to $265 billion, and KYEC’s proposed $1.4 billion U.S. facility show Taiwan’s chip ecosystem regionalizing production to serve customers, manage tariffs, and strengthen cross-border supply resilience.

Fuel price pressure builds

Brent near $88-$90 per barrel and the dollar above EGP51 are straining a budget based on $75 oil and EGP47. Potential fuel-price adjustments would raise transport, manufacturing and power costs across supply chains and pressure consumer demand.

Ethanol Access Becomes Flashpoint

Ethanol emerged as a specific source of dispute, with Brazil accused of restricting U.S. market access while retaining broad access to the American market. U.S. ethanol exports to Brazil reportedly fell to $96 million in 2025 from $761 million in 2018.

US tariff shock escalates

Washington imposed a 25% tariff on thousands of Brazilian products, potentially covering about $15 billion in annual trade and more than 3,000-4,000 items. Exemptions soften some sectors, but exporters, sourcing decisions, pricing and bilateral trade planning now face immediate disruption and retaliation risk.

Wartime Strikes Threaten Infrastructure

Escalating missile and drone attacks across Ukraine, including strikes near Kyiv and western regions, continue to endanger industrial sites, logistics hubs, and urban operations, while shortages in ballistic-missile defense heighten operational disruption, workforce safety concerns, and business continuity costs.

Defense spending reshapes industry

Defense is absorbing the largest new allocations, with an extra €6.4 billion in the 2027 budget and €36 billion added for 2026-2030. This supports aerospace, munitions, AI and space sectors, while redirecting state resources from other civilian priorities.

Oil price cap frozen

The EU froze the Russian seaborne oil price cap at $44.10 per barrel for 12 months, preventing an automatic increase toward roughly $58. This sustains pressure on export revenues, affecting Russia-linked energy trades, pricing assumptions, counterparties and longer-term project economics.

New Outbound Investment Regulation Tightens Oversight

China's first administrative regulation on outbound investment took effect July 1, 2026, expanding oversight to individual residents, embedding export-control compliance for technology and data transfers, establishing security reviews, and imposing personal criminal liability on executives for violations.

Energy infrastructure security deteriorates

Fresh drone and missile threats against Yanbu, Jazan, the East-West pipeline, and Eastern Province oil facilities underscore mounting operational vulnerability. Even where damage remains unconfirmed, recurrent attacks raise outage risk, increase security spending, and unsettle investors in energy-linked assets.

Business costs remain politically contested

Recent reporting cites estimates that U.S. households bear roughly $700-$920 annually from tariffs, while consumers and businesses absorb 77%-96% of costs. That cost pass-through keeps inflation, margins, and pricing strategy under pressure, especially for import-dependent sectors and consumer-facing companies.

Tougher execution and permit discipline

President Prabowo said idle permits should be revoked more quickly and pressed Inpex to accelerate Masela after years of delay. For businesses, this indicates a firmer implementation climate where project timelines, active capital deployment, and regulatory responsiveness will be scrutinized closely.

Sanctions evasion networks targeted

Ukraine’s strikes increasingly target Russia’s shadow fleet, while the UK and EU are moving toward more focused measures on LNG and oil transport assets. Rising insurance, maintenance and transshipment constraints increase payment, compliance and shipping risks for counterparties.

Broad US tariff escalation

Washington is proposing new 10-12.5% Section 301 tariffs on imports from 60 countries after earlier authorities were curtailed, extending policy volatility. Frequent tariff changes are raising input costs, complicating sourcing, pricing, customs planning and long-term trade commitments for multinationals.

War-driven economic contraction

Israel’s economy contracted at a 3.8% annualized rate in the first quarter, with consumer spending, government spending and exports declining during the Iran war period. Although growth is expected to recover, near-term demand, trade volumes and planning visibility remain strained.

Iran War Disrupts Energy Supply Chains

Five-month US-Iran conflict has closed the Strait of Hormuz, pushing oil above $90/barrel and gasoline past $4/gallon. Houthi Red Sea blockades compound disruptions, threatening 20% of global seaborne oil transit and raising inflation across all economic sectors.

Mining permit rules shift

After a Constitutional Court ruling, the government must redesign priority mining-permit awards for cooperatives and religious groups through transparent selection mechanisms. Existing concessions remain valid, but investors face a changing licensing framework and heightened scrutiny around governance and environmental risks.

AI Demand Fuels Export Upside

TSMC posted record quarterly profit of NT$706.6 billion, up 77% year-on-year, and raised 2026 capital spending to US$60-64 billion. Strong multiyear AI and high-performance computing demand is sustaining Taiwan’s export momentum, supplier revenues, and technology-sector investment attractiveness.

Seafood dispute highlights frictions

A recent Malaysia-Thailand fisheries import row, resolved through a memorandum due within one week, exposed how technical food-safety disputes can quickly disrupt exporters. Thai shrimp producers reported price damage, underscoring policy and market-access risks in regional agricultural supply chains.

Orange Basin investment faces uncertainty

Offshore energy prospects in the Orange Basin are attracting investor interest, but regulatory approvals, environmental litigation and geopolitical controversy around Navitas Petroleum’s farm-in are increasing execution risk. Governance ambiguity could slow exploration timelines and complicate capital allocation in a promising basin.

Exemptions protect key supply chains

More than 2,100 products were reportedly exempted, including beef, coffee, orange juice, energy products, rare earths, and aircraft parts, to avoid shortages and supply-chain disruption. These carve-outs cushion immediate damage, but create uneven sectoral exposure and portfolio concentration risks for exporters.

Won liberalization opens capital flows

Seoul plans to make the won more freely tradable for foreigners from January 2027, easing account, reporting, and settlement rules while launching a 24-hour Bank of Korea network. The reform could deepen liquidity, improve investor access, and reshape treasury operations.

Sanctions Compliance Gaps Exposed

Reports that sanctioned Russia- and Iran-linked entities retained UK work-visa sponsor licences highlight enforcement inconsistencies in Britain’s sanctions regime. International firms face elevated due-diligence expectations as authorities tighten controls around restricted counterparties, labour mobility and exposure to politically sensitive supply-chain relationships.

Tariff uncertainty clouds exporters

U.S. tariff policy remains a live risk for Taiwan-based exporters. With the temporary 10% global tariff expiring and possible Section 301 duties of 12.5% or more under discussion, firms face pricing, sourcing, and contract-planning uncertainty across manufactured goods.