Sanctions, Export Controls, and Compliance Risk

The US is intensifying sanctions enforcement, especially on Iran and entities linked to protest crackdowns. New secondary sanctions and export controls, including on advanced technology, raise legal and operational risks for global businesses, requiring robust compliance systems and constant monitoring of regulatory changes.

Geopolitical Tensions and Trade Fragility

Global conflicts, notably US–Venezuela tensions, increase volatility in energy prices, logistics costs, and exchange rates. These risks disrupt supply chains and trade flows, requiring Thai businesses and foreign investors to adopt robust risk management and diversification strategies.

EU Considers Anti-Coercion Measures

In response to US tariffs, the EU is preparing to activate its anti-coercion instrument, potentially restricting US market access and imposing retaliatory tariffs. This unprecedented move could escalate into a full-scale trade war, amplifying risks for Finnish companies.

Board of Peace Alters Governance Landscape

The US-led Board of Peace, endorsed by the UN Security Council, introduces a new international governance framework for Gaza, with Israel’s participation. This body’s evolving mandate and legitimacy debates create regulatory uncertainty, affecting investment, reconstruction, and long-term business planning in the region.

Nearshoring Drives Manufacturing Boom

Nearshoring continues to transform Mexico’s industrial landscape, with high-tech exports from states like Jalisco growing 89% annually. Companies leverage Mexico’s proximity to the US, skilled labor, and USMCA benefits, making it a global hub for electronics, automotive, and AI hardware supply chains.

Resilient Power and Infrastructure Investment

India’s power sector is set for Rs 4.5 lakh crore ($54 billion) investment by 2032, focusing on grid upgrades, renewable integration, and energy storage. Infrastructure development supports long-term demand, supply-chain reliability, and the green transition.

National Security Strategy and Economic Unilateralism

The 2025 US National Security Strategy prioritizes reindustrialization, energy independence, and technological supremacy. Its mercantilist, interventionist stance increases regulatory barriers, marginalizes allies, and risks global market fragmentation, directly affecting international trade and investment planning.

US-China Relations Remain Volatile

Ongoing tensions and policy reversals in US-China economic relations continue to disrupt trade flows, investment decisions, and technology transfers. Businesses face persistent risk from tariffs, regulatory changes, and unpredictable bilateral negotiations.

Urban Mobility and Infrastructure Investment

Major infrastructure projects, such as the Riyadh Metro expansion, are improving urban connectivity and supporting economic diversification. These investments, aligned with Vision 2030, enhance logistics, workforce mobility, and the overall business environment, but require sustained funding and efficient execution to realize their full impact.

Persistent Power Supply and Eskom Debt Crisis

South Africa’s chronic electricity shortages and Eskom’s R100 billion municipal debt undermine industrial productivity and investor confidence. Ongoing legal and operational interventions are critical, but persistent load shedding and financial instability continue to disrupt supply chains and business operations.

Political Risk and Regulatory Uncertainty

Proposed amendments to Taiwan’s Offshore Islands Construction Act could allow local governments to negotiate directly with China, raising national security concerns and regulatory uncertainty for foreign investors, especially in Kinmen and Matsu special zones.

Semiconductor Supply Chain Vulnerabilities

Taiwan's dominance in advanced chip manufacturing, led by TSMC, is critical to global technology and AI sectors. Geopolitical risks, export controls, and potential disruptions from conflict or sanctions pose systemic threats to international supply chains and investment strategies reliant on Taiwanese semiconductors.

Western Sanctions Erode Oil Revenues

Western sanctions and price caps have driven Russia's oil and gas revenues to a five-year low, with a 24% annual decline in 2025. This has severely impacted Russia’s fiscal stability, increasing budget deficits and forcing tax hikes, with direct implications for global energy markets and business operations.

US-China Trade Tensions Escalate

Renewed tariff threats and secondary sanctions on China, especially over Iranian oil, have reignited US-China trade tensions. US imports from China dropped 28% and exports fell 38% in 2025, disrupting global supply chains and prompting sourcing shifts to Southeast Asia.

Escalating Security Guarantees and Military Commitments

Recent summits produced concrete frameworks for multinational forces and security guarantees, with the UK and France pledging military hubs and infrastructure. These commitments underpin Ukraine’s defense and postwar stability, but their implementation and scope remain subject to political and legal negotiations.

Critical Minerals Strategy Reshapes Trade

Australia’s $1.2 billion critical minerals reserve, focused on antimony, gallium, and rare earths, aims to reduce reliance on China and stabilize supply chains. This initiative underpins new trade agreements, attracts investment, and enhances Australia’s role in global technology and defense supply networks.

Infrastructure Investment and Supply Chain Resilience

South Africa is increasing investment in energy, transport, and digital infrastructure to support industrialization and supply chain resilience. However, execution risks, funding gaps, and slow project delivery continue to limit the effectiveness of these initiatives in boosting productivity and attracting foreign capital.

Judicial and Institutional Reforms Impacting Governance

Ongoing institutional reforms, including changes to the judiciary, media regulation, and civil service, are reshaping Israel’s governance landscape. These measures, while aimed at political consolidation, raise concerns about democratic norms, regulatory predictability, and the rule of law, with direct implications for investor risk and business operations.

Global Competition for Critical Minerals

Australia is central to G7-led efforts to diversify global critical minerals supply chains, countering China’s dominance. International collaboration and investment in Australian mining and processing are accelerating, with implications for technology, defense, and clean energy industries worldwide.

US-Saudi Relations and Security Realignment

Saudi Arabia is recalibrating its security partnerships, balancing US ties with new regional alliances and arms deals with Pakistan. Diverging interests with Washington and assertive regional diplomacy reflect a more independent Saudi foreign policy, affecting the risk calculus for Western businesses.

Major US-Indonesia Trade Agreement

Indonesia is finalizing a trade deal with the United States, expected to reduce tariffs from 32% to 19%. This agreement will enhance market access, boost exports, and reshape bilateral trade dynamics, offering significant opportunities for international investors.

Energy Transition and Industrial Competitiveness

Germany is accelerating its energy transition by phasing out coal, building new gas plants, and subsidizing industrial power prices. While aiming for climate goals, the high cost of the transition and energy security concerns are prompting significant government intervention to support energy-intensive industries.

Regulatory Adjustments Impacting Business

Recent and upcoming regulatory changes span financial markets, healthcare, and foreign labor policy. These reforms seek to enhance business transparency, streamline market operations, and adapt to demographic realities, requiring international firms to closely monitor compliance and adapt strategies.

Shifting Global Trade Alliances

Amid US tensions, France and the EU are accelerating diversification of trade partnerships, finalizing deals with Mercosur, Indonesia, and Japan. This realignment aims to reduce reliance on US markets, but introduces new complexities and risks for multinational supply chains and investment strategies.

Collapse in Russian Energy Revenues

Russian oil exports have plunged by 440,000 barrels daily, with Urals crude prices falling below $35 per barrel. Energy income now accounts for only 23% of Russia’s budget, down from over 50%, threatening fiscal stability and investment attractiveness.

Geopolitical Tensions and Regional Rivalries

Turkey’s assertive foreign policy, involvement in Syria, and competition with Israel and Greece have heightened regional tensions. These dynamics increase operational risks for international businesses, especially in energy, defense, and logistics, and may trigger regulatory or security disruptions.

International ‘Board of Peace’ Governance Experiment

The US-led ‘Board of Peace’—involving multiple global actors—aims to oversee Gaza’s reconstruction and security. Israel’s recent agreement to participate marks a policy shift. However, questions over legitimacy, authority, and buy-in from Palestinians and Hamas create operational and reputational risks for international businesses.

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.

Regulatory and Tax Reforms for Investment

India’s 2026 Budget prioritizes regulatory clarity, tax simplification, and capital cost reduction to attract FDI. Reforms in corporate law and sectoral policies, especially for M&A and digital assets, aim to boost private investment and ease cross-border operations.

USMCA Uncertainty and Trade Tensions

The upcoming review of the USMCA and threats of renegotiation or expiration by the US create uncertainty for Mexico’s trade stability, supply chains, and investment planning, with potential tariff hikes and regulatory changes impacting cross-border business operations.

Regional Alliance Shifts and Japan’s Role

Japan has signaled that a Taiwan contingency could trigger its own collective self-defense, linking its security directly to Taiwan’s fate. This evolving regional alliance landscape increases the complexity of risk for international businesses, with potential for broader conflict and supply chain disruptions.

Aerospace Sector’s Trade Surplus and Tax Risks

The French aerospace industry, generating €77.7 billion in 2024 and a €30 billion trade surplus, is vital for exports and employment. Industry leaders warn that higher taxation or regulatory burdens could undermine competitiveness, with ripple effects on supply chains and France’s trade position.

Mining Sector Volatility and Policy Shifts

The mining sector, a cornerstone of South Africa’s economy, faces volatile commodity prices, rising operational costs, and policy interventions such as export taxes and tariff relief. These dynamics affect investment decisions, supply chain stability, and the country’s position in global mineral markets.

Societal Strains: Water, Energy, and Labor

Chronic water shortages, energy mismanagement, and rising unemployment compound Iran’s economic crisis. These systemic issues undermine productivity, increase social risk, and pose long-term challenges for sustainable business operations.

Political Centralization and Reform Acceleration

Vietnam’s leadership is consolidating under General Secretary To Lam, who is likely to combine the roles of party chief and president. This centralization enables rapid policy shifts, deep administrative reforms, and streamlined investment approvals, but raises concerns over checks and balances and long-term institutional resilience.

Infrastructure Investment Drives Construction Boom

US infrastructure spending, supported by federal and state initiatives, is fueling robust growth in construction and heavy equipment markets. This trend supports supply chain modernization and creates opportunities for global suppliers, though regulatory and environmental uncertainties persist.