Strategic Autonomy in Defense and Technology

France is accelerating defense spending and urging local industry to modernize, but also warns of shifting procurement to European suppliers if domestic firms lag. This push for strategic autonomy impacts supply chains, procurement strategies, and cross-border industrial cooperation.

Outbound Investment and Global Capital Flows

China’s record trade surplus is fueling outbound private investment, with over $1 trillion flowing into global markets. This trend increases China’s influence in international finance but raises risks of sudden capital reversals and global market volatility.

Infrastructure and Logistics Bottlenecks

Despite reforms, South Africa’s infrastructure—particularly in electricity, rail, and ports—remains a constraint. Delays in logistics and persistent service failures disrupt supply chains, increase costs, and erode competitiveness, challenging companies reliant on efficient movement of goods.

Uncertain Path to Palestinian Statehood and Reform

The phased peace plan envisions Palestinian reforms and eventual statehood, but Israeli opposition and internal Palestinian divisions stall progress. The lack of political clarity deters long-term investment and complicates regulatory forecasting for international firms.

China-Japan Trade Tensions Escalate

China’s ban on dual-use exports and rare earths to Japan, triggered by Taiwan-related remarks, threatens key Japanese industries, especially automotive and electronics. The move signals intensifying geopolitical risk and potential supply chain disruptions for international businesses.

Intensified Technology Export Controls

China is strengthening legal frameworks and oversight on technology exports, particularly in AI, semiconductors, and rare metals. Tighter reviews and restrictions on foreign acquisitions and technology transfers reflect Beijing’s focus on national security and self-reliance, impacting cross-border investment and innovation flows.

Industrial Investment and Regional Modernization

Major investments in sectors like aerospace, steel, chemicals, and logistics—such as Airbus Helicopters’ €600 million modernization and Marcegaglia’s €750 million low-carbon steel plant—demonstrate France’s focus on industrial competitiveness, job creation, and sustainable development, shaping the long-term business environment.

US-Canada Trade Tensions Escalate

Ongoing US tariffs and President Trump’s threats to undermine the CUSMA/USMCA agreement are destabilizing North American supply chains, particularly in the auto sector. Canada faces heightened uncertainty as over 75% of its exports rely on US access, directly impacting investment and operational planning.

Supply Chain Resilience and Superchain Evolution

China’s supply chain is undergoing rapid digital transformation, leveraging AI, automation, and global logistics networks. This ‘superchain’ approach enhances efficiency and global connectivity, but also increases complexity and dependence on Chinese innovation, impacting global supply chain strategies.

Persistent Political and Corruption Risks

High-profile anti-corruption raids, including against opposition leader Yulia Tymoshenko, highlight ongoing governance challenges. Political infighting and corruption allegations can delay reforms, undermine EU accession, and complicate the investment climate, despite progress in institutional reforms and external oversight.

Canada–China Tariff and Trade Reset

Canada and China have reached a landmark agreement reducing tariffs on Chinese electric vehicles and Canadian canola, seafood, and peas. This deal reopens key export markets for Canadian agriculture and signals a strategic shift toward diversifying trade away from the U.S., with significant implications for supply chains and investment flows.

Record Trade Surplus and Overcapacity

China posted a historic $1.2 trillion trade surplus in 2025, up 20% year-on-year, driven by high-tech and green exports. However, this surplus reflects weak domestic demand and rising global concerns about Chinese overcapacity and potential protectionist backlash.

Infrastructure Expansion and Investment Bottlenecks

Vietnam is launching large-scale infrastructure projects, targeting $5.5 billion in foreign loans for 2026 and up to $38 billion by 2030. However, persistent disbursement delays, land clearance, and regulatory hurdles threaten timely execution, impacting business operations and foreign investment flows.

US Trade Scrutiny and Visa Restrictions

The US has suspended immigrant visa processing for Thai nationals and imposed stricter origin verification on Thai exports. These measures heighten compliance risks, potentially disrupt trade flows, and complicate market access for Thai businesses in the US.

Strategic Diversification Away from U.S. Dependence

Canada is actively seeking to double non-U.S. exports by 2035, driven by repeated U.S. tariffs and trade unpredictability. This diversification strategy is reshaping investment priorities, market access, and supply chain decisions for Canadian and international firms operating in the country.

Regional Security and Military Risk

US and Israeli military actions, including strikes on Iran’s nuclear facilities, and threats of further intervention, heighten regional tensions. The risk of conflict escalation or disruption of the Strait of Hormuz threatens global shipping and energy flows.

Regional Geopolitical Instability Escalates

Saudi Arabia faces heightened geopolitical risks from escalating conflicts in Yemen and broader Middle East rivalries, notably with the UAE and Iran. These tensions threaten vital trade routes, energy infrastructure, and investor confidence, impacting cross-border operations and supply chains.

Semiconductor Policy Reshapes Supply Chains

The US imposed a 25% tariff on advanced semiconductor exports to China, while striking a landmark $250 billion investment and tariff reduction deal with Taiwan. These moves aim to boost US chip manufacturing and supply chain security, but risk further decoupling and global supply chain realignment.

Fragile Economic Recovery at Risk

Germany’s modest economic rebound is jeopardized by renewed transatlantic trade tensions. After years of stagnation and a 0.2% GDP growth in 2025, new tariff threats and global uncertainty could derail forecasts for 1.3% growth in 2026, especially as exports to the US fell 9.4% year-on-year, highlighting vulnerability to external shocks.

US Tariffs Threaten Finnish Exports

The US announced 10% tariffs on Finnish goods, rising to 25% by June 2026 if the Greenland dispute persists. This escalation directly threatens Finnish exports, disrupts supply chains, and injects significant uncertainty into transatlantic trade relations.

Agricultural Sector Crisis and Policy Response

French agriculture faces crisis from low incomes, regulatory burdens, and disease outbreaks. The government announced €300 million in support, import suspensions, and stricter controls, but unrest persists, impacting supply chains and investment confidence in the sector.

Evolving Security Partnerships in Indo-Pacific

Japan is deepening trilateral and bilateral security ties with the US, South Korea, Australia, and the Philippines to counterbalance China’s assertiveness. New defense agreements and joint supply chain initiatives are reshaping the regional security and business environment.

Supply Chain Realignment and Resilience

US tariffs and sanctions, combined with China’s export controls on critical minerals, are driving a global supply chain realignment. Southeast Asia, Africa, and Latin America are gaining sourcing share, while US firms face higher compliance costs, increased supply chain complexity, and the need for diversification.

Suez Canal Revenue Growth and Supply Chain Role

The Suez Canal Economic Zone reported a 55% revenue increase and attracted $14.2 billion in new investments. Despite past disruptions, canal operations are recovering, reaffirming Egypt’s strategic role in global supply chains and logistics, crucial for trade and multinational operations.

Regulatory Reforms and Investment Climate

The government is pursuing regulatory reforms to attract foreign and domestic investment, including tax incentives and streamlined credit for SMEs. However, inconsistent policies, high production costs, and compliance challenges remain barriers to sustained investment and supply chain integration.

Resilience Amid US Tariff Pressures

Despite 50% tariffs imposed by the US in 2024, Brazil’s exports reached a record US$348.7 billion in 2025. Diversification toward China, Argentina, and new markets offset US losses, but ongoing negotiations and potential tariff reimpositions remain a risk for exporters.

Regulatory Tightening in Cross-Border E-Commerce

Turkey abolished the simplified customs declaration for goods under €30, effective February 2026. All e-commerce imports now face standard procedures, increasing compliance costs and scrutiny for international platforms, with exceptions for medicines and supplements.

Fuel Regulation, Security, and Energy Transition

Brazil is intensifying fuel regulation, updating tariffs, and promoting biogas and sustainable aviation fuel. However, fuel theft in pipelines is rising, especially in São Paulo, posing operational and security risks. The energy transition agenda is advancing, but regulatory and enforcement challenges remain.

Sanctions Enforcement Expands Globally

US sanctions enforcement has intensified, targeting entities and behaviors beyond traditional lists. Secondary sanctions, especially related to Iran and Russia, are increasingly used, raising compliance risks for multinationals and complicating cross-border transactions and supply chains.

Infrastructure Expansion Faces Local Resistance

Major infrastructure and tech projects, such as Nvidia’s Kiryat Tivon campus, are transforming Israel’s economic landscape. However, local opposition, concerns over land use, and social tensions may delay projects, increase costs, and complicate stakeholder engagement for international investors and operators.

Labor Market Shifts in High-Tech Sectors

The semiconductor boom is transforming Korea’s labor market, with rising demand for high-skill roles in design, engineering, and logistics. However, automation and advanced manufacturing may reduce jobs in legacy production lines, requiring workforce reskilling and adaptation for sustained competitiveness.

Resilience and Adaptation in Economic Policy

Despite external shocks, Germany and the eurozone have shown resilience, with 1.4% growth in 2025. A major stimulus plan, investment in digital and green infrastructure, and labor market reforms are redefining Germany’s economic role and supporting competitiveness amid global uncertainty.

Foreign Direct Investment Surge

FDI in Vietnam rose 8.9% to $23.6 billion in 2025, with manufacturing accounting for 82.8%. High-tech, green industries, and logistics attract multinational corporations, reinforcing Vietnam’s role as a strategic hub in global supply chains and boosting long-term investment prospects.

Supply Chain Evolution and Resilience

China’s supply chain is undergoing a ‘super evolution’ with AI-driven logistics, global warehouse networks, and flexible manufacturing. These advances enhance efficiency and resilience, positioning China as a global supply chain hub despite rising geopolitical risks.

Escalating Western Sanctions Pressure

Intensified US and EU sanctions, including new 500% tariffs, are sharply restricting Russia’s energy exports, financial flows, and trade. These measures are undermining Russia’s budget, squeezing oil revenues, and creating significant compliance risks for international businesses.

Geopolitical Tensions and Regional Security Risks

Border disputes with India, instability in Afghanistan, and trilateral dynamics involving China heighten security risks for supply chains and cross-border trade. Persistent threats from militancy and unresolved regional conflicts add to operational uncertainties for international businesses.