Critical minerals and rare-earth push

Budget 2026 launched rare-earth corridors (Odisha, Kerala, Andhra Pradesh, Tamil Nadu) and a ₹7,280‑crore magnet incentive to cut reliance on China, which supplies over 45% of India’s rare-earth needs; faster approvals and processing capacity reshape EV, electronics, defence supply chains.

Ratificação do acordo Mercosul-UE

O Brasil ratificou o acordo Mercosul‑UE, abrindo caminho à aplicação provisória. Prevê zerar tarifas para 91% dos bens europeus em até 15 anos e 95% dos bens do Mercosul na UE em até 12 anos, com salvaguardas e cláusulas ambientais.

Energy export diversification to Asia

Canadian firms are expanding west-coast energy export capacity, with LPG exports to Asia already significant and terminal expansions planned through 2026. Diversifying beyond the U.S. supports price realization and resilience, but requires port, rail, and regulatory reliability plus long-term offtake contracts.

Sanctions escalation and enforcement tightening

EU and Ukrainian sanctions broaden to banks, metals, chemicals, maritime services and shadow-fleet actors, while enforcement targets third-country facilitators. Businesses must strengthen screening, end-use controls and maritime due diligence to avoid secondary exposure and shipment delays.

Volatile US tariff regime

US imposed a 10%–15% global tariff for 150 days under Section 122, replacing an earlier 19% rate on Thailand after a Supreme Court ruling. Policy uncertainty raises pricing, contract, and routing risks for Thai exports—especially electronics and autos.

Tariff refunds and cashflow uncertainty

With IEEPA tariffs invalidated, thousands of importers may seek refunds potentially totaling $160–$175bn, but courts must define processes and timelines (often 12–18+ months). Companies face liquidity planning challenges, liquidation deadlines, and uneven outcomes between large and small firms.

Rand strength and capital inflows

A firmer rand, moderating inflation, and attractive real yields have drawn portfolio inflows and improved reserves, lowering funding costs for corporates. However, sensitivity to global risk sentiment, commodity cycles, and geopolitical shocks keeps FX hedging and liquidity planning essential.

Regional conflict spillovers and operational risk

Gaza and wider regional escalation periodically depress tourism, disrupt Red Sea trade, and trigger energy force majeure events. Heightened security posture can affect border logistics and corporate duty-of-care, while political risk premiums raise the cost of capital and insurance.

European rearmament and deterrence shift

Macron will increase France’s nuclear warheads and widen allied participation in deterrence drills, with possible temporary deployment of nuclear-capable aircraft abroad. Defence outlays and procurement should rise, benefiting aerospace, cyber and shipbuilding, while elevating geopolitical and compliance risks.

Manufacturing incentives deepen localization

PLI schemes are scaling domestic production and exports: ₹28,748 crore disbursed, ₹2.16 lakh crore investment approved, ₹8.3 lakh crore exports, and ~14.39 lakh jobs. Electronics localization reduced mobile imports ~77%, affecting component sourcing and OEM site selection.

LNG expansion and permitting fast-tracks

Western Canada’s LNG export buildout is advancing, with projects in British Columbia and potential federal fast-tracking of “national interest” infrastructure. This supports long-term gas demand, port and pipeline contracting, and Asia-linked offtake, but faces Indigenous partnership requirements, legal challenges, and climate-policy constraints.

Hybrid threats and cyber spillovers

Russian-linked sabotage, cyber operations and GPS jamming across Europe are intensifying, affecting transport, ports, aviation and critical infrastructure. Companies face higher operational resilience costs, stricter security expectations, and greater business interruption risk, including via SME supply-chain entry points.

Port and corridor logistics investment

Ongoing port and connectivity projects—such as Patimban expansion and related toll-road links—aim to reduce Java logistics bottlenecks and improve automotive/export throughput. Construction timelines, permitting, and execution risk still affect distribution costs and supply chain reliability.

Labor shortages and mobilization pressures

Mobilization, displacement, and emigration shrink labor supply, pushing wage inflation and raising execution risk for labor-intensive projects. Companies rely more on women, veterans, reskilling programs, and automation; staffing volatility affects timelines, safety, and project pricing.

Monetary easing and credit conditions

The central bank cut policy rates by 100bps (deposit 19%, lending 20%) and lowered reserve requirements to 16%, signaling disinflation (headline ~11.9% Jan 2026). Lower funding costs may revive investment, but real rates and inflation risks persist.

Cross‑strait security and blockade risk

Elevated China–Taiwan tensions and recurring PLA exercises keep contingency risk high for Taiwan Strait shipping, aviation routes, and insurance. Businesses should stress-test just‑in‑time models, diversify logistics corridors, and tighten crisis governance for Taiwan-dependent operations.

IMF program and fiscal tightening

Ongoing IMF EFF/RSF reviews dominate policy, with a roughly $1.2bn tranche linked to tax collection, spending restraint, and governance benchmarks. Slippages risk renewed FX pressure, import curbs, delayed payments, and weaker investor confidence.

Sanctions escalation and secondary pressure

The U.S. continues expanding and enforcing sanctions—especially targeting Russia- and Iran-linked networks and “shadow fleets”—raising secondary-sanctions exposure for non‑U.S. firms. Banks, shippers, insurers, and traders face higher due‑diligence burdens, payment disruptions, and contract frustration risk.

Stricter FDI screening and economic security

France is an active user of foreign investment controls under EU-wide economic security priorities, with faster approvals for most deals but deeper scrutiny for sensitive tech, energy, data and defence. Transaction timelines, remedies, and governance requirements can materially affect M&A execution.

Forestry downturn and lumber dispute

Softwood lumber faces punishing U.S. import taxes around 45%, pressuring mills, employment and rural logistics. Provincial relief programs aim to ease cash flow, but prolonged trade friction raises counterparty risk for timber supply contracts and construction-material supply chains.

Domestic unrest and instability

Economic stress has fueled widespread protests and heavy crackdowns, increasing operational disruption risks. Businesses face strikes, transport interruptions, internet restrictions, and security concerns. Political uncertainty also increases regulatory unpredictability, payment delays, and expropriation or forced-localization pressures.

Regional strikes on US bases

IRGC retaliation is expanding to U.S. facilities across Bahrain, Qatar, Kuwait, UAE and Iraq, with airspace closures and flight disruptions already reported. Continued salvo cycles increase operational risk for regional hubs, constrain logistics capacity, and elevate war-risk premiums for assets and staff.

Ports and logistics connectivity upgrades

Deep-water gateways like Cai Mep–Thi Vai are expanding mainline services, handling over 700,000 TEUs in January, supported by expressways and bridge projects that cut inland transit times. This improves export reliability, yet customs delays and trucking capacity still disrupt lead times.

Macro rates, dollar, demand swings

Fed policy uncertainty amid mixed inflation and labor signals keeps borrowing costs and the dollar volatile. This affects trade competitiveness, hedging needs, capex decisions, and consumer demand for import-heavy categories, amplifying inventory and working-capital management challenges.

Hormuz disruption and war premium

Escalating Iran–U.S./Israel tensions increase the probability of disruption in the Strait of Hormuz, a key global oil chokepoint. Even partial interference can spike prices, trigger force‑majeure clauses, and reroute maritime flows, impacting petrochemicals, aviation fuel, and global manufacturing input costs.

China export curbs escalate

Beijing’s dual‑use export restrictions and watchlists targeting 40 Japanese entities (including major defense/aerospace groups) heighten compliance risk, disrupt critical‑mineral inputs, and accelerate diversification away from China in sourcing, sales, and JV planning.

Tech export controls and sanctions reach

US export controls on advanced semiconductors, AI, and dual-use items—alongside expansive sanctions enforcement—raise compliance risk for global firms. Third-country reexports, end-user checks, and ‘know-your-customer’ controls become central to maintaining lawful market access.

National security investment screening

CFIUS scrutiny remains intense while outbound investment screening (focused on sensitive technologies) adds new compliance obligations. Deal timelines can lengthen, mitigation agreements may constrain operations, and joint ventures in semiconductors, AI, quantum, and defense-adjacent sectors face higher rejection risk.

Macrostimulus, FX and policy uncertainty

With 2026 growth likely ~4.5–5% and deflation concerns, policy may tilt toward consumption support, fiscal easing and managed yuan flexibility. Businesses should plan for sudden stimulus-driven sector boosts, regulatory fine-tuning, and FX hedging needs for RMB revenues and costs.

Labor constraints and immigration politics

Tight labor markets and politicized immigration enforcement debates amplify wage pressures and hiring uncertainty, particularly in manufacturing, logistics, and tech. Compliance and reputational risks rise for employers, while supply-chain throughput can be constrained by worker shortages and turnover.

Anti-corruption tightening and compliance

A new Party resolution on anti-corruption and waste is set for adoption, emphasizing stronger deterrence, post-audit controls, and scrutiny of high-risk sectors. While improving integrity over time, short-term effects include slower approvals, higher documentation burdens, and elevated enforcement risk for partners and intermediaries.

Inbound investment screening tightens

CFIUS scrutiny and sectoral restrictions are expanding beyond defense into data, critical infrastructure and emerging tech. Cross-border M&A timelines lengthen, mitigation agreements become more common, and some investors face outright prohibitions—necessitating early national-security diligence and deal structuring.

DHS funding shutdown operational risk

Political standoffs over immigration enforcement raised the risk of a partial DHS shutdown, potentially delaying TSA and Coast Guard pay and straining airport operations over time. Even if border functions continue, disruptions can affect logistics timing, travel-dependent services, and contractor payments.

Corporate governance and capital efficiency

Regulators and the TSE are revising the governance code to push boards to deploy large cash balances into growth investment. Toyota is considering a ~¥3 trillion cross‑shareholding unwind. These shifts can catalyze buybacks, M&A, and improved foreign investor returns.

Hormuz chokepoint and war-risk

Escalating conflict has threatened closure of the Strait of Hormuz, a route for ~20 million bpd—around one-fifth of global oil consumption. Tanker traffic disruptions, record freight rates, and shrinking war-risk insurance raise costs and delay imports/exports across Asia-linked supply chains.

Gulf-backed mega projects and FDI push

The Ras El Hekma development continues with Abu Dhabi-linked partners, while Egypt targets doubling annual FDI from ~$12bn to $24bn via faster licensing (from ~24 months to under 90 days). Real-estate and infrastructure inflows can stabilize FX and demand.