FDI surge and industrial-park expansion

Vietnam attracted $38.42bn registered FDI in 2025 and $27.62bn realised (multi-year high), with early-2026 approvals exceeding $1bn in key northern provinces. Momentum supports supplier clustering, but strains land, power, logistics capacity and raises labour competition.

Semiconductor tariffs and carve-outs

The U.S. is imposing 25% tariffs on certain advanced semiconductors while considering exemptions for hyperscalers building AI data centers, linked to TSMC’s $165bn Arizona investment. This creates uneven cost structures, reshapes chip sourcing, and influences investment-location decisions.

EU ties deepen, standards rise

EU–Vietnam relations upgraded to a comprehensive strategic partnership, accelerating cooperation on trade, infrastructure, “trusted” 5G, critical minerals and semiconductors. For exporters and investors, EVFTA opportunities expand but EU compliance demands tighten (ESG, origin, labour, CBAM reporting).

Energy transition, nuclear restart optionality

Japan’s decarbonisation path remains hybrid: renewables growth alongside potential nuclear restarts and new flexibility markets. This uncertainty affects long-term power pricing, siting of energy-intensive assets, and PPAs; it also shapes LNG demand forecasts and contract flexibility requirements for utilities and traders.

Aid conditionality and fiscal dependence

Ukraine’s budget is heavily war-driven (KSE: 2025 spending US$131.4bn; 71% defence/security; US$39.2bn deficit) and relies on partner financing. EU approved a €90bn loan for 2026–27 and an IMF $8.1bn program is pending, but disbursements hinge on reforms and compliance.

Logistics and multimodal corridor buildout

Budget-linked infrastructure plans emphasize freight corridors, inland waterways and port connectivity to cut transit times and logistics costs. For global manufacturers, improved hinterland access can expand viable plant locations, though land acquisition, project execution and state capacity remain key risks.

Ports capacity crunch and auction delays

Record port throughput (1.40bn tonnes in 2025, +6.1% y/y) is colliding with investment bottlenecks: 17 private terminals stalled since 2013 (R$36.8bn unrealised). Delays and legal disputes around Tecon Santos 10 raise congestion risk for containers and agro-exports.

Industrial policy reshapes investment

Federal incentives and procurement preferences for semiconductors, EVs, batteries, and critical minerals are accelerating domestic buildouts while tightening local-content expectations. Multinationals may gain subsidies but must manage higher US operating costs, labor constraints, and complex reporting requirements tied to funding.

Energy shortages constrain industry

Winter peak demand is straining gas supply, with household/commercial usage reported around 611 million cubic meters per day, increasing rationing risk for industry. Power and feedstock interruptions can reduce output and reliability for manufacturing, mining, petrochemicals, and exporters.

Secondary sanctions via tariffs

Washington is escalating Iran pressure using tariff-based secondary measures—authorizing ~25% duties on imports from countries trading with Iran. This blurs trade and sanctions compliance, raises retaliation/WTO dispute risk, and forces multinationals to audit supply chains for Iran exposure.

Sanctions expansion and enforcement intensity

U.S. sanctions policy is expanding and increasingly operational, raising shipping, insurance, and counterparty risks. New Iran measures targeted 15 entities and 14 vessels tied to the “shadow fleet” soon after nuclear talks, indicating parallel diplomacy and pressure. Firms need stronger screening and maritime due diligence.

Foreign Investment Scrutiny and Security

US authorities have tightened restrictions on foreign, especially Chinese, investment in strategic sectors and real estate near sensitive sites. Expanded CFIUS powers and state-level laws increase compliance burdens and impact cross-border M&A and supply chain localization.

Energy transition meets grid constraints

Renewables are growing rapidly, yet Brazil curtailed roughly 20% of wind/solar output in 2025 with estimated losses around BRL 6.5bn, reflecting grid bottlenecks. Investors must factor transmission availability, curtailment clauses and regulatory responses into projects and PPAs.

Semiconductor and electronics scale-up

Budget 2026 doubles electronics component incentives to ₹40,000 crore and advances ISM 2.0 to deepen design, equipment, and materials capacity. This accelerates supplier localization and India-plus-one strategies, while raising competition for talent and requiring careful IP, export-control, and vendor qualification planning.

Oil and gas law overhaul

Indonesia is revising its Oil and Gas Law, including plans for a Special Business Entity potentially tied to Pertamina and a petroleum fund funded by ~1–2% of upstream revenue. Institutional redesign and fiscal terms could shift PSC governance, approvals, and investment attractiveness.

Maritime and insurance risk premia

Geopolitical volatility continues to reshape Asia–Europe logistics. Even as Red Sea routes partially normalize, rate swings and capacity overhang drive volatile freight pricing. China exporters and importers should plan for sudden rerouting, longer lead times, and higher war-risk insurance.

Foreign Direct Investment Surges Amid Reforms

FDI in Saudi Arabia rose 10% to $280 billion by Q3 2025, reflecting regulatory reforms and incentives targeting $100 billion annual FDI by 2030. The Kingdom’s efforts to attract long-term foreign capital are reshaping ownership, partnership, and market entry strategies for global investors.

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.

FCA enforcement transparency escalation

The FCA’s new Enforcement Watch increases near-real-time visibility of investigations and emphasises individual accountability, Consumer Duty “fair value”, governance and controls. Online brokers and platforms should expect faster supervisory escalation and higher reputational and remediation costs.

Immobilien-, Bau- und Projektpipeline-Risiko

Hohe Finanzierungskosten bremsen Bau und Real Estate: Hypothekenzinsen lagen Ende 2025 bei ca. 3,9% (10 Jahre), Neubaufinanzierungen schwächer. Der Bau-PMI fiel Januar 2026 auf 44,7. Auswirkungen: Standortverfügbarkeit, Werks-/Logistikflächenpreise, Lieferantenaufträge und Investitions-Timings.

Sanctions enforcement and shadow fleet

Washington is intensifying sanctions implementation, including congressional moves targeting Russia’s shadow tanker network and broader enforcement on Iran/Russia-linked actors. Shipping, trading, and financial firms face higher screening expectations, voyage-risk analytics needs, and potential secondary sanctions exposure.

Russia-China Strategic Economic Partnership

Over $100 billion in joint projects with China span minerals, transport, and military technology. China supplies critical components and payment systems, helping Russia bypass sanctions. This deepening partnership shifts Russia’s trade orientation and impacts global supply chains and investment flows.

Visa Incentives And Talent Mobility

New government decrees grant time-limited visa exemptions for foreign experts, streamlining entry and enhancing Vietnam’s attractiveness for international talent. This policy supports research, innovation, and high-value investment, facilitating knowledge transfer and business expansion.

EV and Battery Ecosystem Expansion

Indonesia is rapidly developing an integrated EV and battery ecosystem, attracting major foreign investment. Over $7 billion is being invested in battery supply chains, with EV-related investment reaching 15.5% of total FDI, positioning Indonesia as a regional hub.

Currency Collapse Fuels Economic Instability

The Iranian rial’s collapse—losing over 50% of its value in 2025—has triggered hyperinflation, supply chain breakdowns, and widespread business closures. Volatile exchange rates and dollar scarcity undermine contract reliability, price stability, and the viability of trade and investment.

Rule-of-law and governance uncertainty

Heightened tensions between government and judiciary raise concerns about institutional independence and regulatory predictability. For investors, this can affect contract enforceability perceptions, dispute resolution confidence, and ESG assessments, influencing cost of capital and FDI appetite.

Strait of Hormuz security risk

Rising U.S.–Iran tensions and tanker incidents increase the probability of disruption in the Strait of Hormuz. Even without closure, higher war-risk premia, rerouting, and convoying can inflate logistics costs, tighten energy supply, and disrupt just-in-time supply chains regionally.

Maritime logistics and port resilience

With major ports like Kaohsiung exposed to coercion scenarios, businesses face higher lead-time variance, inventory buffers, and contingency routing needs. Rising regional military activity and inspections risk intermittent delays even without full conflict, pressuring just‑in‑time models.

China tech export controls

Washington is tightening AI and semiconductor export controls to China via detailed licensing and end-use monitoring. Recent enforcement included a $252 million settlement over 56 unlicensed shipments to SMIC, raising compliance costs, shipment delays, and diversion risks across electronics supply chains.

RBA tightening and persistent inflation risk

The RBA lifted the cash rate to 3.85% as core inflation re-accelerated and capacity pressures persisted. Higher financing costs and a stronger AUD can affect valuations, capex and consumer demand, while raising hedging needs for importers/exporters and tightening credit conditions across supply chains.

Supply Chain Regionalization and Diversification

Geopolitical polarization and rising tariffs are accelerating the shift toward regionalized and diversified supply chains. Companies are prioritizing resilience, flexibility, and scenario planning over cost efficiency, with Southeast Asia, Eastern Europe, and Latin America emerging as alternative hubs.

US–India tariff reset framework

A new interim framework cuts US reciprocal tariffs on Indian-origin goods to 18% (from peaks near 50%) while India lowers barriers on US industrial and selected farm goods. Expect near-term export upside, but compliance, sector carve-outs and implementation timelines remain uncertain.

Electricity market and hydro reform

Le Parlement avance une réforme des barrages: passage des concessions à un régime d’autorisation, fin de contentieux UE et relance d’investissements. Mais mise aux enchères d’au moins 40% des capacités, plafonnement EDF, créent risques de prix et de contrats long terme.

Massive Infrastructure Reconstruction Drive

Ukraine’s large-scale reconstruction, backed by EU and international finance, is creating significant business opportunities in transport, energy, and urban development. However, risks from ongoing conflict and corruption concerns complicate project execution and investment returns.

Critical Minerals Supply Chain Realignment

Australia is advancing a critical minerals strategy, including a $1.2 billion strategic reserve and international partnerships, to reduce dependence on China. This shift is reshaping global supply chains for rare earths, gallium, and antimony, with significant implications for technology and defense sectors.

Rail recovery and open-access shift

Transnet reports improving rail volumes from a 149.5 Mt low (2022/23) toward 160.1 Mt (2024/25) and a 250 Mt target, alongside reforms enabling 11 private operators. Better rail reliability lowers inland logistics costs but transition risks remain during access-agreement rollout.