Resilient tech attracting capital

Despite wartime conditions, Israel’s technology sector continues drawing foreign funding, with 28 startups raising $1.1 billion in March and first-quarter funding above $3 billion. This supports M&A, innovation partnerships and high-value services exports, but concentration risk remains.

IRGC Toll And Compliance

Iran is reportedly seeking transit fees of about $1 per barrel, often in yuan or cryptocurrency, through IRGC-linked channels. Paying for passage may create sanctions, anti-money-laundering, and terrorism-financing exposure, complicating chartering, cargo routing, marine insurance, and contractual indemnity decisions.

Energy Route Disruptions Raise Costs

Tensions linked to Iran and the Strait of Hormuz have disrupted energy and fertilizer flows, pushing up oil, gas, shipping, and insurance costs. US exporters and importers face greater freight volatility, margin compression, and contingency planning needs across agriculture, chemicals, and manufacturing.

Strategic Defence Industrial Expansion

AUKUS is widening opportunities for advanced manufacturing and export-linked suppliers, with an extra A$21 million for submarine supplier qualification and around 5,500 jobs tied to SSN-AUKUS construction in South Australia. Compliance, nuclear standards and long lead times will shape participation.

Renewables Expansion and Grid Upgrades

Egypt is accelerating its renewable target to 45% of the power mix by 2028, backed by around EGP 160 billion in grid upgrades and major wind projects. This creates opportunities in power, logistics, and local sourcing while gradually reducing fuel-import exposure.

Hormuz Chokepoint Shipping Disruption

Iran’s de facto control over the Strait of Hormuz has sharply disrupted regional shipping, with only a fraction of normal traffic moving and some vessels reportedly paying transit fees. The chokepoint risk is raising freight, insurance, energy, and delivery costs globally.

Supply Chains Shift Regionally

Importers are reengineering sourcing around tariff differentials rather than simple reshoring, benefiting suppliers in Taiwan, Mexico, Vietnam, India, and Latin America. This creates opportunities for diversified procurement, but also heightens exposure to origin rules, transshipment scrutiny, and logistics complexity.

Trade Remedies and Regulatory Frictions

Canada is intensifying trade-defense and regulatory action, including a plywood dumping probe against China and scrutiny over data, forced-labor enforcement, and carbon pricing. These measures raise compliance complexity, sourcing risk, and cost pressures for manufacturers, importers, and firms exposed to Canada’s industrial policies.

Automotive Policy and China Pressure

Germany is pushing in Brussels for softer post-2035 vehicle rules, including greater flexibility for e-fuels and plug-in hybrids, to protect its auto base. The debate reflects mounting pressure from more competitive Chinese producers across EVs, machinery and supplier chains.

US-China Strategic Economic Decoupling

Washington is deepening restrictions on China through Section 301 probes, tougher export controls and investment limits, while Beijing pursues countermeasures. Bilateral goods imbalances are shrinking, but trade is being rerouted through Mexico, Vietnam and Taiwan, complicating sourcing and market access.

Trade and Logistics Disruption

Middle East shipping disruption is extending transit times by 10-20 days and raising freight costs 20-40%, with some reports indicating logistics costs up more than 30% year on year. Export competitiveness, inventory management, and supply-chain resilience are under growing pressure.

Export Competitiveness Versus Demand

Turkey still offers manufacturing and export advantages into Europe, but margins are squeezed by energy costs, imported inputs and slower external demand. A weaker lira helps price competitiveness, yet inflation, financing costs and fragile net exports limit gains for automotive, industrial and consumer-goods supply chains.

Tourism Growth Offsets Regional Volatility

Domestic tourism reached 28.9 million trips in Q1 2026, up 16%, with spending at SR34.7 billion. Strong religious and leisure demand supports hospitality, aviation, retail, and services, but regional tensions still threaten wider GCC travel flows and revenues.

Cybersecurity standards are tightening

France is imposing a state roadmap toward post-quantum cryptography, requiring sensitive-data inventories by end-2026, technical mapping by 2027, and deployment for classified systems by 2030. This will raise compliance, procurement, and cybersecurity investment requirements across digital ecosystems.

Big Tech Antitrust Pressure Intensifies

US antitrust pressure is rising through renewed legislation targeting platform self-preferencing and the FTC’s advancing case against Meta. The tougher enforcement climate could reshape digital distribution, marketplace fees, M&A assumptions, and competitive access for foreign firms relying on major US technology platforms.

Critical minerals investment surge

Canberra and Washington have committed more than A$5 billion to Australian critical-minerals projects, backing rare earths, nickel, cobalt, graphite and gallium processing. The funding strengthens non-China supply chains, accelerates downstream capacity, and creates opportunities in mining, refining, logistics, and industrial partnerships.

Labour Code Compliance Reset

Implementation of India’s new labour codes is reshaping wage structures, social security, contract labour rules, and operating flexibility. Multinationals must adjust payroll, HR policies, shift patterns, and plant-level compliance, while potential benefits include clearer rules, wider workforce participation, and fewer legacy legal overlaps.

Green Industrial and Critical Minerals Push

South Africa is positioning around decarbonisation, beneficiation and industrial upgrading, backed by large projects in renewables, automotive transition and mineral processing. This supports long-term manufacturing opportunities, but competitiveness still depends on logistics, power pricing and policy follow-through.

Regulatory Overhaul and Super License

The government plans an omnibus law and “super license” within 180 days to consolidate permits, visas, land approvals and procurement rules. If implemented effectively, this could cut compliance costs, accelerate project execution, and materially improve Thailand’s attractiveness for foreign investors and operators.

Fiscal tightening and weak growth

France cut its 2026 growth forecast to 0.9% and raised inflation to 1.9%, while preserving a 5% deficit target. Planned spending cuts of €4-6 billion and debt-service pressures may curb public demand, subsidies, and investment visibility.

Hormuz Maritime Disruption Risk

Iran’s control over Strait of Hormuz transit is the most immediate business risk. Crossings reportedly fell about 95%, around 800 ships were stranded, and crude flows dropped from roughly 20 million to 2.6 million barrels per day, sharply raising freight, insurance, and delivery uncertainty.

BOJ Tightening and Yen Volatility

The Bank of Japan faces a difficult balance between inflation control and growth protection as external shocks raise import costs. With markets pricing a possible rate increase and policy rates still at 0.75%, financing costs, yen volatility, and hedging needs remain elevated.

Budget reform and deregulation

Ahead of the May budget, Canberra is weighing regulatory simplification, planning reform, R&D support, and potential tax changes affecting housing and resources. Firms already face an estimated A$160 billion annual federal compliance burden, making policy shifts important for investment timing and operating costs.

Monetary Tightening and Lira

Turkey’s high-rate, tightly managed lira regime remains the top business variable. The central bank lifted overnight funding near 40%, while interventions exceeding $50 billion and reserve swings heighten FX, pricing, financing and repatriation risks for importers and investors.

Rupiah Pressure and Inflation Risks

Bank Indonesia is expected to hold rates at 4.75% as inflation reached 3.48% in March and the rupiah weakened about 3% this year, briefly breaching 17,000 per dollar. Higher imported energy costs raise hedging, financing, and pricing risks for foreign businesses.

Trade Competitiveness and Exports

A controlled but persistent lira depreciation supports export competitiveness in manufacturing, especially automotive and industrial goods, but imported input dependence offsets benefits. Businesses should expect continued margin volatility as FX policy, energy prices and external demand remain unstable.

Energy Security Drives Contingency Planning

Taiwan remains highly import-dependent for energy, with roughly one-third of LNG previously sourced from Qatar and 98% of energy needs imported. Firms should monitor fuel supply resilience, inventory policies, and energy costs as Taiwan secures alternative LNG from Australia and the United States.

CPEC and Infrastructure Reform Uncertainty

Pakistan continues to court Chinese and other foreign investment, but delays in privatisation, power-sector restructuring, and project execution complicate the investment climate. Infrastructure opportunities remain substantial, yet investors face slower timelines, regulatory uncertainty, and elevated implementation risk.

Sanctions Evasion Reshapes Trade

Russia is increasingly routing oil and LNG through intermediaries, forged attestations, shadow fleets and ship-to-ship transfers. Reports cite paperwork disguising LNG origin and 150 shadow vessels in March, sharply raising compliance, insurance, banking and reputational risks for international counterparties.

Extreme Energy Flow Disruption

Hormuz disruption has sharply curtailed rival Gulf exports while Iran’s own shipments continue, largely to China. Reports show Iraqi exports down more than 80 percent, Saudi flows materially lower, and Brent up about 60 percent, creating major sourcing, hedging, and margin risks.

Energy Cost Volatility Squeezes Industry

The UK remains highly exposed to imported gas shocks despite renewables growth. Gas set power prices about two-thirds of the time in March while providing only 22% of generation; day-ahead gas prices jumped over 60%, undermining industrial competitiveness and investment planning.

China Trade Stabilisation With Risks

Australia-China ties are improving, with both sides backing expanded trade, investment and possible upgrades to their free trade agreement. Yet dependence on China remains strategically sensitive, especially across LNG, mining and green industries, leaving businesses exposed to policy or geopolitical reversals.

Selective Tariff Liberalization Strategy

India is reducing duties on key industrial inputs, EV battery materials, electronics components and life-saving medicines while preserving high protection in sensitive sectors. This mixed regime supports domestic manufacturing, but requires foreign firms to navigate sector-specific tariff advantages and restrictions.

Domestic Logistics Capacity Strain

U.S. trucking and intermodal networks are tightening as capacity exits, stricter driver enforcement, seasonal demand, and cargo theft increase pressure. California license cancellations and elevated diesel prices are raising inland transport risk, delivery variability, and operating costs for importers and distributors.

War-Risk Logistics Resilience

Ukraine’s Black Sea corridor remains operational despite attacks every five days, with ports handling over 21 million tonnes in Q1 and container volumes up 43% year on year. Trade remains feasible, but shipping, insurance, and contingency planning stay mission-critical.

Settlement Expansion External Pressure

Approval of 34 new West Bank settlements has intensified criticism from the EU and other partners. This raises medium-term risks of diplomatic friction, selective sanctions, ESG scrutiny, and compliance complications for firms with exposure to Israeli entities or contested territories.