Digital Transformation and Data Center Expansion

Thailand is investing nearly 100 billion baht in new data centers to support digital transformation and emerging industries. This positions the country as a regional technology hub, but also raises energy demand and infrastructure challenges.

EU-India Free Trade Agreement Signed

The EU and India have concluded a landmark free trade agreement, covering 25% of global GDP. The deal will reduce tariffs—especially on German autos and machinery—boosting exports and diversifying supply chains amid US trade unpredictability and China competition.

Macroeconomic Reform and Privatization Drive

Egypt is accelerating economic reforms, including privatization and reducing state economic involvement, to attract foreign investment. The government aims for over 70% private sector investment by 2030, supported by IMF-backed policies, improved credit ratings, and targeted sector incentives.

Currency Volatility and Capital Controls

The ruble’s real effective exchange rate surged 28% in 2025, driven by a trade surplus and high interest rates. While this curbed inflation, it hurt export competitiveness and budget revenues, complicating financial planning for foreign investors and multinational operations.

India-Canada Energy and Minerals Reset

Canada and India are negotiating broad accords on energy, critical minerals, and AI, aiming to double bilateral trade by 2030. This diplomatic reset opens new markets for Canadian resources, supports supply chain diversification, and strengthens Canada’s position in Asian growth markets.

Export Diversification Amid Tariffs

China’s exports to the US fell by nearly 20% in 2025 due to tariffs, but overall exports grew 3.2% as China rapidly diversified to Southeast Asia, Africa, and Latin America. This shift is reshaping global supply chains and trade flows, challenging US trade leverage.

China Exposure and Supply Chain Risks

German industry’s deep integration with China, especially in automotive and high-tech sectors, creates strategic vulnerabilities. Recent government commissions highlight growing awareness, but slow policy action leaves supply chains and critical infrastructure exposed to geopolitical shocks and Chinese competition.

US-South Korea Trade Tensions Escalate

The US has raised tariffs on South Korean goods from 15% to 25% due to legislative delays in Seoul, impacting autos, lumber, and pharmaceuticals. This escalation threatens South Korea’s export competitiveness, disrupts supply chains, and injects volatility into bilateral and global trade relations.

Foreign Direct Investment Remains Robust

Germany continues to attract significant FDI into its modular building sector, with capital flowing into manufacturing, technology, and green construction. Strategic alliances and cross-border partnerships are fostering innovation, market expansion, and supply chain resilience.

Supply Chain Resilience and Innovation

China is transforming its supply chains through digitalization, AI-driven logistics, and overseas production hubs. These innovations enhance resilience and efficiency but also create new competitive pressures and require adaptation by multinational partners.

US Tariffs Disrupt German Exports

Recent US tariffs have led to a 9.4% drop in German exports to the US, particularly impacting the automotive and machinery sectors. The resulting volatility and unpredictability in transatlantic trade relations are forcing German businesses to seek alternative markets and reconsider investment strategies.

Escalating US-China Trade Tensions

Ongoing US tariffs and Chinese countermeasures, including export controls and sanctions, are reshaping global trade flows. These tensions drive supply chain diversification, increase compliance risks, and force businesses to adapt strategies for both market access and operational resilience.

Global Supply Chain Realignment

US tariff policy has accelerated the diversification of supply chains away from China, with countries like Indonesia and Thailand seeing import growth of 34% and 28% respectively. Businesses are reconfiguring sourcing and logistics, impacting investment strategies and operational resilience.

High Unemployment and Labor Market Shifts

Finland’s unemployment rate has reached 10.6%, the highest in the EU, driven by weak domestic demand and structural changes. While tech and green sectors are hiring, traditional industries face layoffs, affecting consumer demand and workforce availability for international investors.

Ambitious Double-Digit Growth Targets

Vietnam’s leadership has set an annual GDP growth target of over 10% for 2026–2030. Achieving this requires deep reforms, infrastructure investment, and innovation, but also poses risks if global shocks or policy execution falter, impacting investor confidence and economic stability.

Sectoral Polarization in Export Competitiveness

While semiconductors and automobiles drive export growth, sectors like steel and machinery are losing ground due to Chinese competition and EU carbon border measures. This polarization challenges Korea’s export diversification and exposes supply chains to regulatory and market risks.

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.

Pivot to Asian and Friendly Markets

Russia has redirected over 85% of its trade to 'friendly' countries, notably China, India, and Central Asia, following Western sanctions. This shift has deepened economic ties, diversified export portfolios, and reduced Russia’s reliance on Western markets, but also increases exposure to geopolitical shifts in Asia.

Infrastructure Investment Transforms Logistics

Sydney’s decade-long infrastructure boom, including metro rail, motorways, and airport links, has reshaped urban logistics and connectivity. While future mega-projects may slow, completed upgrades enhance supply chain efficiency, urban mobility, and long-term competitiveness for international businesses.

Tariff Policy Drives Supply Chain Shifts

The US maintains an aggressive tariff regime, especially against China, driving sourcing shifts to Southeast Asia and legal challenges to tariff authority. Businesses must adapt to a new baseline of higher costs, regulatory complexity, and supply chain reconfiguration.

USMCA Review and Trade Uncertainty

The 2026 review of the US-Mexico-Canada Agreement (USMCA) is underway amid rising US-Canada tensions and US protectionism. Potential reforms to rules of origin, minerals, and labor laws could reshape North American trade, impacting $665 billion in Mexican exports, mostly to the US.

Deteriorating Investment Climate and Human Rights Concerns

Widespread repression, mass casualties, and international condemnation have further eroded Iran’s investment climate. Heightened scrutiny over human rights abuses and governance failures increases reputational and regulatory risks for foreign investors and partners.

Energy Transition And Renewables Expansion

Khanh Hoa and other provinces are advancing large-scale renewable energy projects, including wind, solar, and nuclear. National policies support the shift to green energy, grid stability, and green hydrogen, enhancing Vietnam’s energy security and export potential in the clean tech sector.

China-Brazil Strategic Alignment

China is deepening its strategic partnership with Brazil, especially in agriculture and infrastructure, amid shifting global power dynamics. Increased Chinese imports of Brazilian soybeans and infrastructure investments strengthen bilateral economic ties and supply chain resilience.

Persistent Tariff and Regulatory Uncertainty

Despite new agreements, unresolved disputes over tariffs on key goods (EVs, canola, steel, aluminum) continue to disrupt supply chains and market access. The risk of retaliatory measures and regulatory unpredictability remains a significant operational challenge for international businesses in Canada.

Downstream Industrialization and Value Addition

Indonesia continues to prioritize downstream processing in mining and energy, leveraging foreign investment—especially from China—to move up the value chain. This strategy increases export value, supports job creation, and enhances industrial competitiveness.

Environmental Compliance as Trade Imperative

The EU-Mercosur deal links trade privileges to climate commitments, including adherence to the Paris Agreement and bans on products linked to deforestation. Non-compliance could trigger trade suspensions, making environmental governance a critical factor for exporters and investors in Brazil.

Energy Transition Policy Uncertainty

Despite record renewable capacity in 2025, France’s energy transition is hampered by policy delays and political debate. Over 70% of energy needs are still met by imported fossil fuels, increasing exposure to global shocks and complicating long-term investment in green infrastructure.

Climate Transition and Fossil Fuel Dependence

Despite climate commitments, South Africa is expanding domestic gas and coal projects, risking stranded assets and exposure to carbon border taxes. This tension between energy security and sustainability creates regulatory uncertainty and reputational risks for international partners and investors.

Debt Crisis and Fiscal Pressures

Egypt faces acute fiscal stress, with external debt exceeding $161 billion and controversial proposals to swap strategic assets for debt relief. The military’s economic dominance and reluctance to release reserves hinder effective crisis management, while IMF-mandated reforms require reduced state and military roles in the economy.

Belt and Road Initiative’s Strategic Pivot

In 2025, China signed a record $213.5 billion in new Belt and Road deals, focusing on energy, mining, and infrastructure, especially in Africa and Central Asia. The initiative now emphasizes both renewables and fossil fuels, raising both opportunity and ESG risk for global investors.

Trade Policy Uncertainty and Diversification

US tariffs (currently 19%) and global trade tensions are prompting Thailand to diversify export markets beyond the US and China. Efforts to expand FTAs, streamline certification, and access India and the Middle East are central to trade resilience and supply chain adaptation.

Energy Transition and Renewables Surge

Saudi Arabia is rapidly expanding renewable energy capacity, with solar and wind projected to deliver nearly 20% of electricity by 2029. The Kingdom’s energy transition, supported by facilities like CATL’s Riyadh hub, is critical for decarbonization, industrial competitiveness, and compliance with global standards such as the EU’s Carbon Border Adjustment Mechanism.

Energy Crisis and Cost Relief Measures

Persistent energy shortages and high tariffs have hampered industrial output. Recent government relief measures, including tariff reductions and export refinance schemes, offer short-term support but underscore ongoing risks for manufacturers and supply chain reliability.

Technology and Semiconductor Supply Chain Realignment

Australia's participation in the Pax Silica coalition and rare earths sector expansion positions it as a key player in trusted technology supply chains. This reduces dependence on China, attracts global tech investment, and supports the growth of domestic semiconductor and advanced manufacturing industries.

Digital Blackouts and Technology Restrictions

Iran’s government has imposed repeated internet blackouts and tightened technology controls to suppress dissent, disrupting business operations, cross-border communications, and digital commerce. These restrictions have also driven a black market for smuggled technology and hindered foreign investment in Iran’s digital sector.