Technology Export Controls Tighten

The US continues to restrict advanced technology exports to China, especially AI chips, with new licensing and compliance requirements. Recent policy adjustments allow limited sales with strict conditions, balancing national security with economic interests and impacting global tech competition.

Renewable Energy Expansion and Export Plans

Eskom is expanding its renewable energy portfolio, aiming to integrate nuclear and gas by 2030 and sell excess capacity to neighboring countries. This transition supports industrialization, energy security, and new export opportunities for South African businesses.

Widespread Civil Unrest and Political Instability

Nationwide protests over economic collapse and political repression have resulted in hundreds of deaths and thousands of arrests. The instability has led to internet shutdowns and business disruptions, significantly raising operational and security risks for foreign firms.

Renewable Energy Transition and Grid Challenges

Australia’s accelerated shift toward renewables—now supplying over half of grid demand—has driven down wholesale electricity prices but exposed reliability risks. Delays in infrastructure, policy uncertainty, and the need for coal backup complicate the transition, affecting energy-intensive industries and investment strategies.

Supply Chain and Infrastructure Disruptions

Ukrainian drone strikes and sanctions have damaged Russian energy infrastructure, causing production and export delays. Logistical challenges, including longer shipping routes and increased insurance costs, are disrupting supply chains for both Russian and international partners.

Semiconductor Policy Reshapes Supply Chains

The US imposed a 25% tariff on advanced semiconductor exports to China, while striking a landmark $250 billion investment and tariff reduction deal with Taiwan. These moves aim to boost US chip manufacturing and supply chain security, but risk further decoupling and global supply chain realignment.

Volatile Inflation and Interest Rate Outlook

Despite moderating inflation, robust employment and wage growth have increased expectations of Reserve Bank rate hikes in 2026. This environment creates uncertainty for borrowing costs, investment planning, and consumer spending, requiring businesses to closely monitor monetary policy developments.

Rising Regional Geopolitical Influence

Saudi Arabia is recalibrating its foreign policy, forming new defense alliances with Egypt, Turkey, and Pakistan, and asserting itself in Yemen and the Horn of Africa. This shift increases regional autonomy but also introduces new risks and uncertainties for international business operations.

Escalating US-Mexico Security Tensions

US pressure for joint military action against Mexican cartels and fentanyl labs has intensified, raising sovereignty concerns and currency volatility. While Mexico resists intervention, ongoing cartel violence and security cooperation remain critical risks for business operations and cross-border logistics.

Rising Franco-German Defense and Policy Tensions

France is increasingly uneasy about Germany’s €500 billion defense buildup and growing influence in European security and industrial policy. Disputes over joint defense projects and diverging strategic priorities could affect cross-border investments and the future of European industrial cooperation.

Industrial Policy and Innovation Incentives

The Nova Indústria Brasil policy allocates R$300 billion in financing to boost industry, innovation, and exports, with a focus on green technologies and automotive efficiency. The government is also responding to industrial competitiveness challenges, especially in chemicals and fertilizers, with new fiscal incentives and regulatory reforms.

Inflation and Monetary Policy Uncertainty

US inflation remains above the Federal Reserve’s 2% target, with annual CPI at 2.7%. Political interference and delayed data due to government shutdowns complicate monetary policy, increasing uncertainty for investment, borrowing costs, and currency stability.

Security Risks and Cartel Violence

Escalating cartel violence and US threats of military intervention heighten operational and reputational risks for international businesses. Despite increased arrests and cooperation, criminal organizations still exert significant influence, affecting logistics, investment, and local partnerships.

US Tariff Pressures and Policy Shifts

A proposed US bill seeks a 15% tariff on imports from countries with trade deficits, including Mexico. Ongoing legal debates and potential new tariffs raise risks for Mexican exports, particularly in automotive and manufacturing, threatening Mexico’s competitive advantage under USMCA.

Critical Minerals Supply Chain Resilience

Japan is aggressively diversifying its critical minerals and rare earths supply, launching deep-sea mining projects and forging new partnerships with the EU, Italy, and India. These efforts aim to reduce dependency on China, which controls about 60-70% of global rare earth supply, safeguarding manufacturing and technology sectors.

Trade Policy Uncertainty and EU-Mercosur Tensions

Strong domestic opposition to the EU-Mercosur trade deal, especially from French farmers and parliament, has led to protests and political crises. This uncertainty affects market access, supply chains, and investment strategies for global agribusiness and exporters.

Foreign Investment and Real Estate Growth

Australia’s real estate market is projected to reach USD 306 billion by 2034, driven by population growth, infrastructure investment, and foreign capital. Government incentives and AI-driven innovation are reshaping property markets, but regulatory changes and housing affordability remain critical factors for investors.

Chronic Export Underperformance and Structural Barriers

Despite ambitious targets to reach $60 billion in exports, Pakistan’s export-to-GDP ratio has declined to 10.4%. Structural issues—such as weak infrastructure, regulatory uncertainty, and financial system crowding out private credit—continue to hamper export growth and international trade integration.

Supply Chain Resilience and Diversification

The US-Taiwan deal includes mechanisms for ongoing consultation on tariff and supply chain issues, supporting resilience against shocks. Taiwan’s strategy emphasizes global diversification, advanced packaging, and maintaining technological leadership amid rising global competition.

Humanitarian Crisis and Workforce Displacement

Widespread infrastructure damage and harsh winter conditions have forced hundreds of thousands to evacuate urban centers, straining labor availability and disrupting local markets. The humanitarian crisis compounds business continuity risks and complicates workforce planning for international firms.

Supply Chain Vulnerabilities in Key Sectors

French supply chains, especially in automotive, luxury goods, and agriculture, are exposed to global trade shocks and tariff threats. Disruptions risk profit margins, force supply chain realignment, and may accelerate production shifts abroad, challenging France’s industrial competitiveness.

Industrial Competitiveness and Innovation Gaps

France’s export performance lags behind Germany and Italy, with fragmented support for exporters and a need for unified branding and innovation. High-tech sectors show promise, but industrial policy uncertainty and skills shortages hinder international competitiveness.

Oil Exports Under Sanctions Pressure

Despite sanctions, Iran exports up to 1.7 million barrels of oil daily, mainly to China at steep discounts. New US measures and domestic unrest threaten further disruptions, with potential to sharply impact global energy markets and pricing.

Critical Minerals Strategy Reshapes Trade

Australia's $1.2 billion Critical Minerals Reserve prioritizes antimony, gallium, and rare earths, aiming to secure supply chains and attract investment. This government-backed push is vital for global electronics, defense, and clean energy sectors, impacting international partnerships and supply security.

Impact on Semiconductor and High-Tech Sectors

China’s anti-dumping investigations and export controls on chemicals like dichlorosilane directly threaten Japan’s semiconductor manufacturing. Disruptions could cascade through global electronics supply chains, affecting multinational firms reliant on Japanese high-tech components.

Energy Sector Expansion and Transition

Recent agreements with China and Gulf states are boosting Canadian oil, LNG, and uranium exports, while also fostering collaboration in renewables and clean technology. These developments are pivotal for Canada’s energy sector, supporting both traditional exports and the transition to net-zero goals.

Geopolitical Volatility and US-China Tensions

Brazil faces heightened geopolitical risk due to US military action in Venezuela and growing US-China rivalry. This volatility affects currency, commodity prices, and investor sentiment, requiring robust risk management for international businesses operating in or sourcing from Brazil.

AI and Advanced Technology Leadership

Taiwan is leveraging its semiconductor and AI expertise to become a strategic partner for the US in artificial intelligence. Major investments target AI infrastructure, with TSMC and others expanding R&D and production, reinforcing Taiwan’s centrality in the global tech ecosystem.

Shadow Trade and Sanctions Evasion

Russia increasingly relies on clandestine shipping, transshipment, and non-transparent trade routes to circumvent sanctions. These practices heighten compliance risks for international businesses and complicate due diligence, raising the risk profile of Russian-linked supply chains.

Robust Public Investment Surge

Turkey’s 2026 Public Investment Program allocates nearly 1.92 trillion TRY across 13,887 projects, prioritizing infrastructure, energy, health, education, and earthquake resilience. This unprecedented scale of investment is set to enhance logistics, energy independence, and social infrastructure, directly impacting supply chains and regional connectivity.

Inflation and Monetary Policy Uncertainty

US inflation held steady at 2.7% in December 2025, above the Federal Reserve’s 2% target. The Fed is expected to hold rates steady, but persistent cost-of-living concerns and political pressures create uncertainty for global investors and business planning.

Strategic Pivot to Asian and Global Markets

Canada is actively seeking to double non-U.S. exports by 2035, leveraging new agreements with China and expanding ties with Asia-Pacific and plurilateral blocs. This pivot aims to reduce vulnerability to U.S. trade policy shocks and foster new investment and technology partnerships, but increases exposure to geopolitical risks.

Labor Mobility and Skills Partnerships

Germany is expanding labor mobility agreements, especially with India, to address skilled labor shortages. Visa facilitation, joint education initiatives, and skilling partnerships are expected to ease talent flows, benefiting sectors such as healthcare, IT, and advanced manufacturing.

Suez Canal Disruptions and Revenue Loss

Regional conflicts, particularly the Gaza war, have caused significant disruptions to Suez Canal traffic, resulting in an estimated $9 billion revenue loss over two years. Rerouted shipping increases global supply chain costs and reduces Egypt’s vital foreign exchange earnings, impacting trade and fiscal stability.

Geopolitical Risk: U.S.-China Rivalry and Canadian Autonomy

Canada’s efforts to balance relations with both the U.S. and China expose businesses to geopolitical risks, including retaliatory tariffs, regulatory shifts, and political pressure. The evolving stance on ‘strategic autonomy’ will shape future trade, investment, and supply chain resilience.

Tightening Export Controls and Tech Restrictions

Beijing is intensifying export controls on critical goods, including rare earths and dual-use technologies, to safeguard national security and leverage supply chain influence. These measures impact global technology access and increase compliance risks for international firms.