Tourism Sentiment Turns More Selective

Public backlash against foreign misconduct has intensified after protests, cemetery disputes, and tighter scrutiny in Phuket, Koh Samui, and other hubs. Tourism operators, property owners, and hospitality brands face higher reputational sensitivity and more visible local enforcement.

India-EU FTA Ratification Momentum

The India-EU free trade agreement has moved to Council approval, promising tariffs cut on 96% of EU goods and more predictable rules. With bilateral trade above €180 billion and investment protection talks ongoing, companies should prepare for improved market access and compliance shifts.

Deficit Trade Threats Resurface

Trump’s threats to cut trade with deficit countries if rates do not fall add another layer of policy uncertainty. For exporters and multinationals, the linkage between monetary policy and trade retaliation could quickly disrupt sourcing, market access, and customs planning.

Regulatory Burden and Social Tension

France is pairing social reforms with more administrative change, including laws on assisted dying, school phone bans, foreign-election interference and anti-fast-fashion measures. The wider trend is heavier governance intervention, creating additional compliance demands for consumer, media and regulated businesses.

Inflation and tax burden pressure

Domestic politics and business reporting highlight petroleum levies, rising fuel prices, and heavy interest costs as major economic strains. Higher transport and energy expenses are feeding inflation, depressing consumer demand, and increasing operating costs for firms across sectors.

Commercial Relations Mixed With Coercion

Recent reporting shows China using market access, customs controls, and legal tools alongside ongoing trade dependence with partners such as India and Japan. This combination increases the operational risk of retaliation for companies caught between geopolitical tensions and commercial interdependence.

Finance And Services Sanctions Risk

The sharper risk is sanctions on companies that finance, insure, build, or otherwise enable settlement expansion. Articles warn that banks, financiers, and infrastructure providers could be targeted, creating much wider exposure than product bans and complicating cross-border project finance.

EU Reset and Trade Access

The UK is pushing hard to be included in the EU’s ‘Made in Europe’ industrial scheme and broader reset talks. The outcome could shape access for British exporters, especially in steel, cars and defence, and determine whether UK firms remain embedded in continental supply chains.

Higher Fed Rates Strengthen Dollar

The Federal Reserve raised rates to 3.75%-4.00% and signaled more tightening, lifting the dollar and increasing global funding costs. That raises hedging, refinancing, and valuation pressure for foreign borrowers and dollar-sensitive supply chains.

Regional energy disruption raises costs

Attacks on Saudi Arabia's East-West pipeline and maritime routes have pushed Brent above $100 and threatened up to 4% of global oil supply. Israel is indirectly exposed through the wider conflict, while global manufacturers and transport operators face volatile fuel, input and logistics pricing.

Settlement sanctions reshape trade exposure

Western governments, led by the UK and joined by France, Canada and others, have announced or prepared trade restrictions on Israeli settlement goods, with possible prison penalties in Norway. This elevates compliance, supplier screening and reputational risk for firms linked to West Bank and East Jerusalem operations.

Industrial Competitiveness Faces Structural Strain

Germany’s industrial model is under pressure from delayed investment, aging infrastructure, low productivity growth, and deteriorating regional conditions. Business sources warn that these factors are suppressing expansion decisions, especially in the east, and may accelerate deindustrialization in key supply-chain clusters.

U.S. Investment Package Delays

Seoul is delaying disclosure of its $350 billion U.S. investment package amid disputes over commercial reasonableness, return distribution, and loss-sharing. The uncertainty affects tariff relief, capital allocation, and the timing of major cross-border projects tied to energy and industrial expansion.

Saudi-French partnership deepens fast

Riyadh and Paris launched a strategic partnership council and signed 21 agreements spanning defense, energy, AI, transport, healthcare and entertainment. Bilateral trade reached about $11.8 billion in 2025, signaling more structured cross-investment and project execution opportunities.

Trilateral Deal Under Strain

Mexico continues to defend a trilateral framework with Canada and the United States, but talks are increasingly bilateral. The collapse of U.S.-Canada negotiations and efforts to cut a separate Mexico-U.S. understanding could fragment North American coordination and complicate regional planning.

China’s Export Surge Pressures Europe

China is using export strength to offset weak domestic demand, but Europe is pushing back. EU leaders cite a trade deficit of about €1 billion a day and are considering restraints on hybrid vehicles, as Chinese automakers and suppliers deepen market pressure.

Infrastructure Law Requires Clarity

Lawmakers warn that ambiguity in PSN and PPP authority is delaying land acquisition, financial close and contract execution across 226 strategic projects worth about Rp6,491 trillion. Clear legal mandates and regulatory synchronization are becoming critical for investors and infrastructure suppliers.

Russian Energy Revenues Under Pressure

The bill aims to reduce Moscow’s energy income by tightening pressure on crude and gas buyers. Because Russian energy remains central to state financing and export earnings, companies linked to the trade face shifting price dynamics, policy risk, and possible retaliatory measures.

Hormuz Risk Threatens Energy Supply

President Lee ruled out combat deployment, but Seoul may expand maritime protection around the Strait of Hormuz, through which about 70% of Korea’s crude imports pass. Any disruption would raise freight, insurance and feedstock costs for Korean industry and importers.

Rare Earth Supply Leverage

China’s dominance in rare-earth processing and recent export controls make critical minerals a central bargaining chip in negotiations. Any easing of permits or continued restrictions could directly affect electronics, EV, aerospace, and defense supply chains worldwide.

Supply Chain Compliance Burdens

Because the measures now hit hundreds of products and, in some cases, USMCA-compliant goods, companies face more origin-tracking, customs administration, and sourcing adjustments, with elevated risk of delays, higher transaction costs, and regional reconfiguration.

US-China Truce Remains Fragile

Washington and Beijing are trying to preserve a tariff truce, capped near 20%, through talks in New York and a Trump-Xi summit, but new tariff probes, blacklists, and retaliatory measures keep escalation risk elevated.

Thailand deepens China investment ties

The government is betting on higher Chinese FDI to revive growth, after Chinese approvals hit a record 198.1 billion baht last year. The strategy could support industrial upgrading, but it also increases dependence on Chinese capital, technology, and supply chains.

Economic Security Becomes Trade Policy

Japanese and Taiwanese leaders are explicitly tying economic security to national security, with policy focus on supply-chain resilience, critical minerals, energy, and strategic industries. This is likely to shape investment screening, procurement preferences, and resilience requirements for foreign firms.

Housing shortage drives migration policy

The government is explicitly linking migration settings to housing capacity, arguing population growth must slow so housing can catch up. The debate has intensified around whether lower inflows will help affordability or worsen broader construction and service constraints.

EU and China Sanitary Barriers

Brazilian agribusiness faces new non-tariff barriers, including the EU suspension of beef, poultry, eggs, fish and honey imports and China’s three-year beef safeguard. These actions raise compliance costs, delay sales, and force supply-chain adjustments.

East-West Pipeline Vulnerability

Saudi Arabia’s East-West pipeline was attacked and temporarily shut down, underscoring the fragility of the kingdom’s key bypass for Strait of Hormuz disruptions. Any sustained damage would constrain oil exports, disrupt supply contracts, and increase volatility for energy-intensive industries.

Manufacturing and Technology Partnerships

Egypt’s leaders are seeking investment from India and BRICS partners in manufacturing, clean energy, pharmaceuticals, automotive, IT, and green hydrogen. These sector-specific partnerships could deepen local value chains, support technology transfer, and reshape sourcing strategies for multinationals.

Shadow Fleet and Sanctions Evasion

The new package explicitly targets Russia’s shadow tanker fleet and foreign facilitators of sanctions evasion. That raises compliance risk for shipping, insurance, logistics, and trading firms, while increasing the likelihood of disrupted cargo flows and higher freight costs.

Turkey Maintains Russia Balance

Turkish officials and Ukraine’s ambassador described Ankara as supporting Ukraine while avoiding sanctions on Russia because of energy, tourism and broader economic dependence. This balancing act affects sectoral exposure in energy, tourism, shipping and defense, and leaves firms vulnerable to policy shifts tied to Moscow relations.

Central Bank Caution Keeps Funding Costly

Copom cut Selic only to 13.75% and signaled continued caution amid election uncertainty, oil volatility, and Fed tightening. For international investors, the message is clear: Brazil’s cost of capital may stay elevated, with FX and financing conditions still fragile.

Bond Market Pressures Mount

Takaichi’s tax-cut and spending agenda, including a food consumption tax cut to 1% and household payouts, has pushed Japanese government bond yields to around 3%, the highest in decades. Funding uncertainty raises concerns over fiscal sustainability and market volatility.

Foreign labour enforcement tightening

Thailand has stepped up inspections of businesses using foreign workers, with more than 74,000 firms checked and over 1,700 workers found in prohibited roles in fiscal 2026. Higher fines, deportation risks and permit restrictions may raise compliance costs and tighten labour availability for employers.

Growth downgraded, deficit worsens

The government cut 2026 growth to 0.5% and dropped its 5% deficit goal, citing energy shocks and conflict spillovers. Slower activity, weaker demand, and a widening deficit point to a more cautious operating environment.

Industrialization Anchors Export Growth

Officials said manufacturing now contributes more than 82% of Indonesia’s exports, and the government is using strategic trade and industrial policy to protect industrialization, innovation and market access. This supports opportunities in value-added manufacturing, but increases regulatory scrutiny in strategic sectors.

Fuel prices drive social unrest

Fuel prices have surged to around €2.10-€2.30 per liter, prompting renewed Gilets Jaunes-style mobilization calls and protests. This raises risks of transport disruption, consumer backlash, and operational delays, especially outside major cities.