Red Sea security and shipping risk

Persistent Red Sea/Bab al-Mandab insecurity continues to reshape routes, insurance premia, and inventory buffers. Saudi ports signal readiness for major liner returns when conditions stabilise, but businesses should plan dual-routing, higher safety stock, and supplier diversification for regional flows.

Energy security and transition buildout

Vietnam is revising national energy planning to support targeted 10%+ growth, projecting 120–130m toe final energy demand by 2030. Renewables are targeted at 25–30% of primary energy by 2030, alongside LNG import expansion and grid upgrades—critical for industrial reliability and costs.

Logistics and Port Infrastructure Crisis

Persistent inefficiencies at major ports, especially Cape Town and Durban, continue to undermine export competitiveness, disrupt supply chains, and cost the economy hundreds of millions of rands annually, despite recent incremental improvements and reform efforts.

EU market access with green compliance

An India–EU FTA conclusion and stricter EU climate/traceability tools (e.g., CBAM-type reporting) increase both access and compliance burdens for exporters in steel, aluminum, chemicals and textiles. Firms should invest in emissions data, auditing, and supplier traceability.

Energy Geopolitics and Trade Deals

U.S. trade negotiations increasingly bundle energy commitments and geopolitical conditions, as seen in tariff relief tied to partners’ changes in Russian oil purchases. This links market access to energy sourcing, complicating procurement strategies and increasing political risk in long-term offtake contracts.

Digital tax reporting expands to SMEs

HMRC’s Making Tax Digital for Income Tax begins April 2026 for self‑employed/landlords over £50k, moving to quarterly submissions via paid software; thresholds fall to £30k (2027) and £20k (2028). This increases compliance cost, process change and advisory demand.

US Tariff Escalation and Trade Wars

Recent US tariff threats against China, the EU, and South Korea have intensified global trade tensions, disrupting supply chains and raising costs. Tariffs averaging 18%—the highest since 1934—are largely borne by US consumers and businesses, impacting inflation and investment strategies.

Undersea cable and cyber resilience

Taiwan’s connectivity relies heavily on subsea cables and faces recurrent cyber pressure. New initiatives to harden cables and telecoms signal operational risk for cloud, finance, and BPO services; companies should diversify routes, enhance redundancy, and test incident response.

EU accession-driven regulatory convergence

Kyiv targets EU membership by 2027, accelerating alignment on standards, customs, competition, and public procurement. For exporters and investors this can reduce long-term market access friction, but creates near-term compliance churn, documentation demands, and shifting tariff and quota regimes.

Robust Foreign Investment Inflows

Brazil attracted record foreign direct investment in 2025, totaling €71.9 billion (3.41% of GDP), driven by strong stock market performance and diversified investor interest. Sustained inflows reinforce Brazil’s position as a key emerging market destination for global capital.

Canada’s Strategic Autonomy and Defense Spending

Canada is doubling defense spending by 2030 and building domestic resilience in critical sectors. This policy aims to strengthen sovereignty and reduce vulnerability to external coercion, impacting procurement, industrial partnerships, and the defense supply chain landscape.

Domestic Reforms and Infrastructure Investment

Canada is fast-tracking $1 trillion in investments across energy, AI, critical minerals, and trade corridors, alongside tax reforms and interprovincial trade liberalization. These initiatives aim to boost competitiveness and supply chain resilience, presenting significant opportunities for global investors.

Reforma tributária em transição

A migração para CBS/IBS e Imposto Seletivo começa em 2026 e vai até 2033, com mudanças de crédito e cobrança no destino. Empresas precisam adaptar ERP, precificação e contratos; risco de litígios e custos temporários de compliance aumenta.

Green Transition and Sustainable Investment Projects

Major projects like the $4.2 billion Giza waste-to-biofuel facility highlight Egypt’s commitment to green growth and the circular economy. Such initiatives create new investment opportunities, support job creation, and align with global sustainability standards, attracting ESG-focused investors.

Gaza spillovers and border operations

Rafah crossing reopening for limited passenger flows underscores persistent Gaza-related security and humanitarian pressures. While not a primary goods corridor, heightened North Sinai sensitivities can affect permitting, workforce mobility, and reputational risk. Companies should strengthen security protocols and compliance screening.

Industrial decarbonisation subsidy wave

Paris is deploying large-scale state aid to keep energy‑intensive industry in France: €1.6bn over 15 years for seven sites, targeting ~3.8 Mt CO2/year abatement (~1% of national emissions). Subsidy conditionality and EU state‑aid scrutiny affect project bankability.

Shrinking but Persistent EU-Iran Trade

Despite sanctions, EU-Iran trade persists at low levels—€4.6bn in 2024, mainly machinery, chemicals, and food. However, ongoing sanctions and the IRGC’s terrorist designation by the EU further constrain business, with compliance burdens and reputational risks for European firms.

Energy security and transition buildout

Vietnam is revising national energy planning and PDP8 assumptions to support 10%+ growth, targeting 120–130m toe final energy demand by 2030 and renewables at 25–30% of primary energy. Grid, LNG, and clean-energy hubs shape site selection and costs.

Sanctions Enforcement Targets Russian Oil

France’s aggressive enforcement of sanctions against Russia’s shadow oil fleet, including high-profile tanker seizures, heightens geopolitical risk in maritime trade. This robust stance, coordinated with allies, may provoke Russian retaliation and impact global energy supply chains.

US-Taiwan Strategic Trade Integration

A new US-Taiwan trade agreement lowers tariffs to 15% and commits over $250 billion in bilateral investments, especially in semiconductors and AI. This deepens economic ties, boosts exports, and enhances Taiwan’s role in trusted supply chains.

Critical Minerals Supply Chain Security

Japan is urgently strengthening critical mineral supply chains through alliances with the UK and other partners, responding to China's export controls and global supply shocks. These efforts are vital for sustaining advanced manufacturing, energy, and defense sectors, directly impacting supply chain resilience and investment strategies.

Regulatory Reforms for Foreign Investment

Sweeping reforms to business, visa, and property laws are opening more sectors to foreign ownership, simplifying bureaucracy, and enhancing expat residency options. These changes aim to boost FDI and position Thailand as Southeast Asia’s leading expat and investment destination.

Challenging Investment Climate and M&A

Brazil’s investment environment is marked by high interest rates, fiscal constraints, and political polarization. M&A activity remains subdued, but the Mercosur-EU agreement and foreign interest in mining, energy, and technology sectors could stimulate strategic investments and sectoral shifts.

Fiscal Stabilization and Policy Reform

South Africa is nearing a fiscal turning point, with debt-to-GDP stabilizing and primary surpluses returning. Improved fiscal credibility has strengthened the rand and bonds, but sustaining reforms and managing coalition politics remain critical for long-term investor confidence.

Foreign Investment Faces High Uncertainty

Foreign direct investment in Ukraine remains subdued, with FDI at only 0.9% of GDP in late 2025. Investors are cautious due to security risks, regulatory instability, and infrastructure damage, though reconstruction initiatives offer selective opportunities for risk-tolerant capital.

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.

Energy exports and regional gas deals

Offshore gas production and export infrastructure expansion (Israel–Egypt flows at capacity; Cyprus Aphrodite unitisation talks) underpin regional energy trade. However, operational pauses and political risk can disrupt supply commitments, affecting industrial buyers and energy-intensive sectors.

Food import inspections disrupt logistics

New food-safety inspection rules (Decree 46) triggered major port and border congestion: 700+ consignments (~300,000 tonnes) stalled in late January and 1,800+ containers stuck at Cat Lai. Compliance uncertainty raises lead times, storage costs and inflation risks.

Monetary policy and FX volatility

Banxico signaled further rate cuts are possible if tax and tariff changes do not trigger second-round inflation. With the policy rate around 7% and inflation near 3.8% early 2026, financing costs may ease, but peso volatility can impact input pricing and hedging needs.

US-China Trade Decoupling Dynamics

Despite high US tariffs, China’s exports have surged by reallocating supply chains through third-party countries. US efforts to reduce reliance on Chinese goods are being circumvented, impacting sourcing, pricing, and competitive positioning for international businesses.

Industrial Competitiveness Risks

Brazil’s industrial sector faces higher production costs than Europe, risking deindustrialization as tariff barriers fall under new trade agreements. Without robust industrial policies, Brazil may see increased imports and reduced local investment in high-value sectors.

AUKUS and Indo-Pacific Security Dynamics

Australia’s deepening defense ties with the US and UK through AUKUS reinforce its strategic role in the Indo-Pacific. This alliance supports supply chain security and regional stability, but also increases expectations for Australia’s defense spending and self-reliance amid rising China-US competition.

Korea semiconductor industrial policy reboot

A new Special Act creates a presidential commission, dedicated funding and cluster support to strengthen the entire chip supply chain. Regulatory streamlining and regional incentives can attract foreign suppliers, but unresolved labor flexibility debates may constrain rapid R&D and ramp-ups.

India trade deals intensify competition

India’s new EU deal and evolving US tariff arrangements reduce Pakistan’s historical preference cushion, especially in textiles and made-ups. European and US buyers may renegotiate prices and lead times, pressuring margins and accelerating shifts toward higher value-add, reliability, and compliance performance.

Shadow-fleet oil trade disruption

Iran’s crude exports rely on a mature “dark fleet” using AIS spoofing, ship-to-ship transfers and transshipment hubs (notably Malaysia) to reach China at discounts. Expanded interdictions and tanker seizures increase freight, insurance, and contract-frustration risks for energy-linked supply chains.

Rising Non-Oil Exports and Trade Diversification

Non-oil exports grew by 17% in 2025 to $48.6 billion, narrowing the trade deficit by 9%. Key export sectors include building materials, chemicals, and food. This diversification supports economic resilience and offers new opportunities for international trade partnerships.