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.

Labor Market Evolution and Human Capital

Vietnam’s growth model is shifting from low-cost labor to higher productivity and innovation. Investment in education, digital skills, and workforce upskilling is central to sustaining competitiveness, with rising wages and labor quality impacting cost structures and operational strategies.

Balochistan security and CPEC exposure

Militant attacks in Balochistan underscore elevated security risks around CPEC assets, transport corridors, and Gwadar-linked logistics. Higher security costs, insurance premiums, and project delays weigh on FDI appetite, especially for infrastructure, mining, and energy ventures with long payback periods.

US–China trade war resurgence

Tariffs, export controls, and screening of China-linked supply chains remain structurally entrenched. Even during tactical truces, businesses face sudden policy reversals, higher landed costs, customs enforcement, and intensified due-diligence on origin, routing, and end-use across jurisdictions.

US-linked investment and credit guarantees

Taiwan’s commitment to roughly US$250bn of investment in the US, backed by up to US$250bn in credit guarantees, will redirect corporate capital planning. It may accelerate supplier localization in North America while raising financing, execution, and opportunity-cost considerations at home.

High debt and refinancing sensitivity

Despite improving macro indicators, Egypt’s large public financing needs and high real interest costs keep rollover risk elevated. Any global risk-off shift can widen spreads, pressure the currency, and delay state payments—material for contractors, suppliers, and banks.

Political Gridlock on Defense and Security

Taiwan’s $40 billion defense budget faces parliamentary opposition, raising concerns about its deterrence capabilities amid rising Chinese military activity. Political divisions could impact defense procurement, foreign confidence, and overall security stability.

Strategic Contest Over Port of Darwin

Australia’s push to reclaim the Chinese-leased Port of Darwin has provoked threats of economic retaliation from Beijing. The dispute highlights the intersection of national security and trade, with potential sanctions and investment restrictions affecting broader Australia-China commercial relations.

Semiconductor Mission 2.0 push

India Semiconductor Mission 2.0 prioritizes equipment, materials, indigenous IP and supply-chain depth, building on ~₹1.6 lakh crore in approved projects. Customs duty waivers on capex reduce entry costs, supporting chip packaging, OSAT and design ecosystems that affect tech supply chains.

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.

Macroprudential tightening hits credit

BDDK and the central bank tightened consumer and FX-credit rules: card limits must align with documented income, unused high limits can be reduced, restructuring is capped, and FX-loan growth limits were cut to 0.5% over eight weeks. Expect tighter liquidity and financing.

Logistics disruption and labor risk

Rail and potential port labor disruptions remain a recurrent risk, with spillovers into U.S.-bound flows. For exporters of bulk commodities and importers of containerized goods, stoppages elevate inventory buffers, demurrage, and rerouting costs, stressing time-sensitive supply chains.

Monetary policy and FX volatility

Banxico signaled further rate cuts are possible if tax and tariff changes do not trigger second-round inflation. With the policy rate around 7% and inflation near 3.8% early 2026, financing costs may ease, but peso volatility can impact input pricing and hedging needs.

Infrastructure Expansion and Logistics Modernization

India’s 2026-27 budget prioritizes accelerated investment in highways, ports, and digital infrastructure. Initiatives like Gati Shakti have reduced logistics costs below 10% of GDP, improving supply chain efficiency and global competitiveness, and supporting the goal of becoming a $5 trillion economy.

Automotive Sector Policy Shifts

The automotive industry is navigating trade tensions, policy uncertainty, and a flood of cheap imports, particularly from China. The government is considering tariff adjustments and new energy vehicle policies, with the sector’s future hinging on reform momentum and global market access.

Energy tariffs and circular debt

Power-sector reforms, including proposed tariff revisions and circular-debt containment, remain central to macro stabilization. Tariff resets can lift inflation but may reduce industrial cross-subsidies. For investors, the key risks are energy cost predictability, outages, and contract enforcement.

China-Finland Economic and Tech Cooperation

Finland and China are deepening cooperation in energy transition, technology, and circular economy. Bilateral agreements and Chinese investments in Finnish infrastructure offer growth opportunities but also require careful navigation of regulatory, political, and security considerations.

CBAM and green compliance pressure

EU officials explicitly linked deeper trade integration to climate alignment, warning Turkish exporters about Carbon Border Adjustment Mechanism exposure without compatible carbon pricing and reporting. Carbon-cost pass-through could hit steel, cement, aluminum and chemicals, driving urgent decarbonization and MRV investments.

US-Canada Trade Tensions Escalate

The US has threatened 100% tariffs on Canadian exports if Canada deepens trade with China, creating significant uncertainty for supply chains, cross-border investment, and the upcoming USMCA renegotiation. This volatility directly impacts market access and business planning for international firms.

Auto sector pivots amid China exposure

Japan’s auto and parts makers are adjusting EV strategies while managing China-linked vulnerabilities in semiconductors and rare-earth-dependent components. Supply assurance, qualification of alternate suppliers, and localization are becoming competitive differentiators, affecting JVs, sourcing, and inventory policies.

Labour Market and Immigration Shifts

The UK labour market is shaped by new immigration policies, skills shortages, and demographic trends. Restrictions on migrant mobility and evolving visa rules affect talent availability, wage pressures, and long-term economic growth.

Textile rebound but cost competitiveness

Textile exports rebounded to a four-year high in January 2026 ($1.74bn, +28% YoY), helped by lower industrial power tariffs. Sustainability depends on input costs, logistics efficiency, and upgrading product mix as competitors gain better market access and buyers demand faster, cleaner production.

Semiconductor reshoring and export controls

Taiwan’s chip sector faces simultaneous pressures: US tariffs on certain advanced chips, tighter tech controls toward China, and major offshore fab investment. Firms must redesign compliance, IP protection, and capacity allocation while managing customer qualification and margin impacts.

Cybercrime, fraud, and compliance pressure

Rising cybercrime and cross-border scam activity is driving stricter security practices (e.g., Bitkub disabling web withdrawals after phishing losses) and diplomatic focus on cybercrime/trafficking. Businesses should expect tougher KYC/AML, incident-reporting expectations, and higher security spend.

Large infrastructure pipeline execution

Sheinbaum’s 2026–2030 plan targets roughly MXN 5.6–5.9 trillion (about $323B) across 1,500 projects, heavily weighted to energy, rail and roads, plus ports. If delivered, it improves logistics; execution, funding structure and procurement transparency remain key risks.

Weaponization of Trade and Supply Chains

US trade policy is increasingly driven by geopolitical considerations, with tariffs, sanctions, and export controls used as strategic tools. This shift from efficiency to security heightens supply chain fragility, risk aversion, and the need for resilience in global business operations.

Energy security and LNG procurement

Taiwan’s import-dependent power system and plans to increase LNG purchases, including from the US, heighten focus on fuel-price volatility and shipping risk. Industrial users should expect continued sensitivity to outages, grid upgrades, and policy shifts affecting electricity costs.

Renewables, batteries and green hydrogen

Large-scale clean-energy buildout is accelerating: the $1.8bn ‘Energy Valley’ project includes 1.7 GW solar plus 4 GWh storage, and a 10 GWh/year battery factory in SCZONE is planned. Green hydrogen/ammonia export plans target first shipment by 2027.

Regional Security Tensions and Military Posturing

US military deployments, threats to the Strait of Hormuz, and Iran’s support for regional proxies elevate the risk of conflict. Any escalation could disrupt global energy flows and insurance costs, directly impacting supply chains and investment risk assessments.

USMCA review and tariff risk

The 2026 USMCA/CUSMA joint review is approaching amid fresh U.S. tariff threats (up to 100% on Canadian goods) and active duties on steel, aluminum, autos and lumber. Uncertainty raises cross-border pricing, rules-of-origin, and investment risk for integrated supply chains.

Critical Minerals Strategy Targets Europe

Russia invests $9 billion to expand rare earth mineral production, aiming to control 10% of global supply by 2030. This strategy leverages Europe’s dependence on Chinese minerals, offering Russia new geopolitical influence but facing technological and sanctions barriers for foreign investors.

Immigration politics and labor supply

Foreign labor is now a core election issue. Japan plans to accept up to 1.23 million workers through FY2028 via revised visas while tightening residence management and enforcement. For employers, this changes hiring pipelines, compliance burdens, and wage/retention competition.

Mass Protests and Political Instability

Widespread protests since late 2025, met with violent crackdowns and internet blackouts, have resulted in thousands of deaths and tens of thousands of arrests. The unrest reflects deep societal grievances, undermines regime legitimacy, and creates unpredictable risks for business continuity and investment.

Competition regime reforms reshape deal risk

Government plans to make CMA processes faster and more predictable, with reviews of existing market remedies and merger control certainty. This could reduce regulatory delay for transactions, but also changes strategy for market-entry, pricing conduct, and consolidation across regulated sectors.

Sanctions and secondary tariff enforcement

U.S. sanctions policy is broadening beyond entity listings toward “secondary” trade pressure, increasing exposure for banks, shippers, and manufacturers tied to Iran/Russia-linked trade flows. Businesses face higher screening costs, disrupted payment channels, and potential retaliatory measures from partners.

Cross-strait grey-zone shipping risk

China’s high-tempo drills and coast-guard presence increasingly resemble a “quarantine” playbook, designed to raise insurers’ war-risk premiums and disrupt port operations without open conflict. Any sustained escalation would threaten Taiwan Strait routings, energy imports, and just-in-time supply chains.