Persistent Inflation, Tight Rates

Turkey’s central bank kept the policy rate at 37%, with overnight lending at 40%, as inflation remained 32.61% in May and the 2026 inflation target was raised to 24%. High financing costs and weaker domestic demand complicate investment planning and working-capital management.

Supply Chain Costs from Shipping Risks

Strait of Hormuz-related shipping and fuel volatility is feeding into Thailand’s freight, airline, and import costs. Businesses face higher transport expenses, longer routing risk, and greater inventory-planning uncertainty, particularly in energy-intensive manufacturing, aviation-linked trade, and time-sensitive supply chains.

Energy policy clouds investment

Mexico’s state-favoring energy policies remain a major bilateral dispute, with U.S. industry alleging Pemex benefits at private investors’ expense. Uncertainty over market access, electricity availability, and dispute resolution continues to weigh on industrial projects, operating costs, and long-term capital allocation.

China Ties and Market Reopening

South Korea is cautiously improving economic links with China, including the first expansion of bilateral flight rights in seven years, while trying to avoid deeper strategic entanglement. Businesses may gain in travel, logistics, and trade flows, but policy balancing with Washington remains delicate.

Policy Uncertainty Weighs Investment

Rapid shifts across tariffs, export controls, energy regulation, and trade enforcement are making the U.S. policy environment less predictable. For foreign investors and multinational operators, shorter planning horizons, legal challenges, and regulatory reversals increase risk premiums for capital allocation and expansion decisions.

Power And Clean Energy Pressure

Energy security is increasingly central to industrial expansion as advanced manufacturers demand cleaner electricity and more reliable supply. Power Development Plan 8 targets 73 GW of solar and 38 GW of wind by 2030, while LNG projects add transitional capacity.

Black Sea Export Corridor Resilience

Ukraine’s alternative maritime corridor remains vital for grain, metals, and import flows after Russia’s earlier blockade. Its continued functioning supports trade normalization, yet shipping security, inspection risks, and insurance dependence keep export planning and freight pricing volatile for international firms.

Sanctions And Blockade Escalation

US pressure on Iran’s oil and petrochemical trade is intensifying through maritime interdictions, secondary sanctions, and blacklisting of vessels, brokers, and front companies across Hong Kong, Singapore, Qatar, UAE, and elsewhere, sharply complicating payments, shipping, and third-country compliance exposure.

Trade Corridor and Port Expansion

To support non-U.S. export growth, Canada is prioritizing ports, rail links and transmission corridors, especially around Vancouver. The Port of Vancouver already handles about $1 billion in trade daily with 170 countries, so expansion decisions will directly affect logistics reliability, shipping capacity and export competitiveness.

Oil revenue and price-cap volatility

Russia’s trade outlook remains tied to oil receipts, but sanctions policy is shifting as the EU considers freezing the Urals price cap at $44.10 per barrel. Middle East disruptions and enforcement changes could alter Russian export margins and global energy costs.

Energy Shock and Cost Exposure

The Middle East conflict is feeding higher energy prices, inflation and weaker growth in France, with the Commission forecasting 0.8% growth in 2026. Businesses face renewed pressure on transport, input costs, margins and contingency planning across energy-intensive supply chains.

Defence Industrial Expansion Accelerates

AUKUS implementation and expanded US force posture are deepening Australia’s defence industrial build-out, with pressure to lift spending toward 3% of GDP or higher. This creates opportunities in advanced manufacturing, logistics and infrastructure, while redirecting public resources and procurement priorities.

Foreign Investment Rules Tighten

New 2026-27 reforms aim to streamline Australia’s foreign investment framework while preserving tougher scrutiny in sensitive sectors, especially critical infrastructure and strategic assets, meaning investors may see faster approvals in low-risk areas but tighter national-interest conditions elsewhere.

High Energy Cost Competitiveness

Elevated energy costs remain a core drag on Germany’s industrial competitiveness, especially in chemicals, metals and manufacturing. Government discussions on competitiveness and cost relief show the issue remains unresolved, affecting margins, plant utilization, reshoring decisions and the attractiveness of Germany-based production.

Energy Diversification Investment Drive

Saudi Arabia is accelerating diversification beyond hydrocarbons through renewables and civilian nuclear development. Targets include 50% renewable electricity by 2030 and net zero by 2060, creating opportunities in grids, engineering, storage, nuclear supply chains, and long-term industrial power demand.

USMCA Renewal and Tariff Uncertainty

Canada faces heightened trade uncertainty as Washington signals it may not renew USMCA on July 1, likely triggering annual reviews. With nearly 70% of Canadian exports going to the United States, unresolved auto, steel, aluminum and retaliatory tariff disputes materially affect investment planning and cross-border supply chains.

Critical Minerals Investment Acceleration

Canada is positioning itself as a trusted supplier of graphite, uranium and other strategic minerals essential to battery, defence and clean-tech chains. The government says it has signed 56 critical-minerals agreements with more than 10 countries, helping unlock over $18 billion in investment opportunities.

Black Sea Corridor Insecurity

Russian drone strikes on foreign-flagged cargo ships in Ukraine’s maritime corridor are raising insurance, freight, and routing risks. Odesa ports handled over 15 million tonnes this year, but repeated attacks threaten grain exports, metals trade, and broader shipping reliability.

Defense Export Boom and Backlash

Israel’s defense exports reached a record $19.2 billion in 2025, up nearly 30% year on year, with Europe taking 36% and Asia-Pacific 32%. The surge supports industrial activity, but sanctions, exhibition bans, and political scrutiny create reputational and market-access risks for counterparties.

US Tariff Uncertainty Persists

Washington’s planned Section 301 tariffs of up to 12.5% on Japanese goods have not yet taken effect, but they prolong uncertainty despite a 15% bilateral cap. Exporters, automakers, and investors still face compliance, pricing, and market-access planning risks.

Inflation And Currency Collapse

Iran’s domestic economy is under severe stress, with official year-on-year inflation reaching 77.2% in May, essentials up 113.8%, and the rial weakening from 32,000 per dollar in 2015 to above 1.7 million, undermining contracts, pricing, wages, and local demand.

Fiscal-Credit Mix Raises Risk

Directed credit reached 43.1% of total lending in March, the highest since 2019, as subsidized programs expanded across housing, agriculture and industry. Markets warn fiscal, credit and parafiscal stimulus may keep rates higher for longer, complicating debt sustainability and capital allocation decisions.

Geopolitical Energy Shock Management

West Asia conflict risks are feeding oil-price volatility, shipping disruption and inflationary pressure. Indian authorities say roughly 60% to 70% of crude imports now use less exposed routes or suppliers, but sustained energy shocks would still strain margins, logistics costs, and macro stability.

UK-EU Financial Services Reset

Major banks are pressing for financial services to be included in the UK-EU reset before the July summit, seeking clearing access, regulatory coordination, and equivalence. Any progress could improve capital flows, market access, and cross-border investment operations from London.

Critical Seabed Infrastructure Risks

Australia, the US and UK are accelerating AUKUS technology to protect subsea cables and critical seabed infrastructure by 2027. Heightened concern over damaged cables in the Taiwan Strait and Baltic underscores risks to digital connectivity, shipping coordination and operational resilience.

Infrastructure Concessions Momentum

Brazil continues to rely on private concessions and public-private partnerships to expand ports, rail, roads, and sanitation capacity. This supports long-term trade efficiency and investment opportunities, but execution depends on regulatory consistency, financing conditions, and subnational political coordination across states and municipalities.

Grid Bottlenecks Blocking Investments

Weak distribution-grid expansion is delaying renewable and storage deployment, with 140 GW of renewables and 130 GW of battery projects reportedly blocked in Germany, representing €45 billion in unrealized investment. Connection delays increasingly constrain industrial electrification, site selection, and long-term capacity planning.

USMCA Review and Tariff Risk

Canada faces elevated uncertainty ahead of the July 1 USMCA review as Washington signals annual reviews, not renewal. Ongoing disputes over autos, steel, aluminum, dairy and procurement could disrupt cross-border investment planning, sourcing decisions and tariff exposure management.

PIF Domestic Investment Reorientation

The Public Investment Fund is shifting roughly 80% of its portfolio toward domestic projects while reducing international exposure from 30% to 20%. This strengthens local deal flow, infrastructure demand, and industrial opportunities, but may narrow outbound capital channels for foreign partners.

Energy Export and Grid Expansion

Ottawa is prioritizing energy expansion, transmission links and permitting reform, while electricity demand is expected to double by 2050. New LNG, pipeline and intertie projects could improve export diversification and industrial competitiveness, but execution, consultation and regulatory timelines remain decisive business variables.

Energy Infrastructure War Damage

Airstrikes and conflict-related disruption have damaged Iranian businesses and parts of the oil sector, weakening production, tax revenues and logistics reliability. Even if fighting pauses, reconstruction needs, asset impairment and periodic military flare-ups will continue complicating investment and supply planning.

Industrial Localization Expands Nationwide

Egypt is widening its industrial base through a new offering of 400 serviced industrial plots totaling about 900,000 square meters across 15 governorates. The focus on supplier industries in food, engineering, chemicals, textiles, and pharmaceuticals could strengthen domestic sourcing and import substitution.

US Tariff and Trade Friction

Washington has proposed additional 12.5% tariffs on Japanese goods under a forced-labor trade probe, although Tokyo says bilateral terms should hold. The episode highlights persistent US policy unpredictability, affecting export planning, pricing, and localization decisions for Japan-based manufacturers.

Planning Reforms Accelerate Friction

Government planning and infrastructure reforms aim to speed decisions and housing delivery, yet councils warn of weaker local oversight and more legal conflict. Faster approvals may aid logistics and real estate investment, but implementation disputes could delay projects and raise execution risk.

Customs Enforcement Burden Increases

A new executive order targets tariff evasion, transshipment, undervaluation, and forced-labor imports through stricter importer-of-record rules, beneficial-ownership disclosures, and tougher penalties. International firms should expect more audits, higher bond and documentation requirements, and greater exposure to shipment delays or enforcement actions at the border.

China Dependence in Exports

Brazil’s trade profile remains heavily tied to Chinese demand for soybeans, iron ore, oil, and other commodities. This underpins export earnings and logistics flows, but also leaves suppliers, miners, shippers, and investors exposed to Chinese demand swings, pricing shifts, and geopolitical trade disruptions.