UK-EU Trade Relations and Realignment

The UK’s trade growth is projected to lag the global average, with the EU remaining its most critical partner. Deepening ties with the EU is essential to offset slow growth with the US and China, and to maintain competitiveness amid rising protectionism and regulatory divergence.

Energy Transition and LNG Imports Surge

Egypt’s domestic gas production has declined, driving record LNG imports—9.01 million metric tons in 2025, mostly from the US. New agreements with Qatar and Israel aim to secure supply, but Egypt’s shift from exporter to major importer impacts energy costs, industrial competitiveness, and investment strategies.

Automotive Sector Faces Major Headwinds

The German automotive industry, highly reliant on US exports and global supply chains, is acutely exposed to new tariffs and trade uncertainty. Stock declines of 3-5% for major automakers reflect investor anxiety, while potential cost increases, investment delays, and supply chain disruptions threaten profitability and employment.

Moderate Economic Growth, High Inflation

Brazil’s economy is projected to grow around 1.7% in 2026, with inflation remaining high at 12-12.75%. Fiscal stimulus and strong agriculture support growth, but high interest rates and external risks require cautious planning for investment and supply chain strategies.

Greenland’s Push for Self-Determination

Greenland’s government and population strongly favor autonomy and reject external interference, including US financial incentives. Unresolved status and independence aspirations complicate regulatory certainty, resource licensing, and long-term investment planning for international businesses.

US Sanctions and Export Controls Expand

The US continues to use sanctions and export controls as tools of foreign policy, targeting adversaries such as Iran and Russia. The complexity and reach of OFAC measures create significant compliance risks and operational hurdles for international businesses and financial institutions.

Cybersecurity Regulation and Critical Infrastructure Protection

Israel is advancing comprehensive cyber legislation, expanding reporting and compliance requirements for critical sectors. With the country among the most targeted globally, these measures aim to enhance national resilience and safeguard business operations, particularly in tech, energy, and logistics.

Vision 2030 Megaprojects and Real Estate

Massive Vision 2030 projects like NEOM and the Red Sea Project are transforming Saudi Arabia’s real estate market, projected to reach $137.8 billion by 2034. New laws allowing foreign property ownership and AI-driven innovations are accelerating FDI, urbanization, and infrastructure development, reshaping business opportunities.

Australia-China Trade Relationship Volatility

Despite new Chinese tariffs on beef and ongoing strategic tensions, China remains Australia’s largest trading partner. The relationship is resilient but unpredictable, with regulatory shifts and quotas impacting key exports, requiring businesses to diversify markets and manage risk exposure.

Technology Sector and Digital Transformation

India’s electronics exports reached Rs 4 lakh crore in 2025, with mobile phone and semiconductor manufacturing surging. Major global tech firms are increasing hiring and offshoring to India, driven by US visa restrictions and cost advantages, signaling a structural shift in global supply chains.

Nuclear Program Uncertainty and Geopolitical Tension

Iran’s nuclear program remains a flashpoint, with recent US and Israeli strikes on nuclear sites and Iran’s threats to weaponize. The unresolved nuclear issue heightens geopolitical risk, complicating long-term investment and trade planning for international businesses.

Inflation, Cost Pressures, and Consumer Demand

US inflation remains above the Fed’s 2% target, driven by tariffs, wage pressures, and supply chain adjustments. Persistent cost increases are prompting companies to cut jobs and automate, while consumer confidence has dropped to its lowest since 2014. These dynamics are reshaping pricing strategies, profit margins, and investment decisions, with downstream effects on global supply chains and export competitiveness.

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.

Green Hydrogen Industry Expansion

Australia is scaling up its green hydrogen sector through major projects like the Tasmania initiative, supported by favorable policies and international partnerships. This positions Australia as a leader in clean energy exports, with significant implications for industrial supply chains and investment flows.

Strategic Defense Alliances and Regional Security

Turkey is negotiating a tripartite defense pact with Saudi Arabia and Pakistan, and is assuming a leading role in Black Sea naval security. These moves enhance Turkey’s geopolitical influence, but may introduce new risks and compliance considerations for international firms.

Long-Term Erosion of Investment Climate

The cumulative effect of sanctions, revenue losses, and regulatory uncertainty is eroding Russia’s attractiveness for foreign direct investment. Persistent instability and heightened compliance risks are prompting international businesses to reassess or exit the Russian market.

Cross-Strait Relations and Policy Uncertainty

Despite deepening US ties, Taiwan faces ongoing policy uncertainty due to cross-strait tensions. Beijing’s opposition to high-level US-Taiwan engagement and potential for economic coercion remain significant risks for foreign investors and multinational supply chains.

Political Stability and Policy Continuity

India’s stable democratic institutions, policy continuity, and macroeconomic management underpin investor confidence. The government’s commitment to infrastructure, digital public goods, and inclusive growth ensures a predictable environment for international business and investment decisions.

Critical Minerals and Green Transition Partnerships

Brazil and the EU are advancing cooperation on lithium, nickel, and rare earths, vital for the digital and clean energy transitions. This positions Brazil as a key supplier in global critical minerals value chains, attracting investment but also requiring adherence to high transparency and environmental standards.

Political Uncertainty and Border Tensions

Thailand faces heightened political uncertainty ahead of the February 2026 elections, compounded by border tensions with Cambodia. These factors increase operational risks, impact investor confidence, and may disrupt cross-border trade and supply chains.

Regional Geopolitical Tensions and Iran’s Role

Iran’s support for Hamas and other non-state actors continues to threaten Israel’s security and regional normalization efforts. The risk of escalation with Iran or its proxies remains high, impacting energy infrastructure, cross-border trade, and investor sentiment.

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.

Regional Security Tensions and Military Threats

U.S. threats of military intervention, ongoing proxy conflicts, and the weakening of Iran’s regional alliances have heightened security risks. The potential for escalation jeopardizes cross-border trade, energy transit, and the safety of international personnel and assets.

Inflationary Pressures and Currency Volatility

Food inflation and rupiah depreciation are ongoing concerns, with inflation peaking at 2.92% in 2025 and the rupiah hitting record lows. These trends impact consumer purchasing power, operational costs, and financial planning for international businesses operating in Indonesia.

Labor Reform and Compliance Pressures

2026 marks a pivotal year for labor reform enforcement, including stricter inspections, reduced workweek to 40 hours, and higher minimum wages. Companies must adapt to new compliance standards under USMCA commitments, affecting cost structures and operational flexibility, especially for SMEs.

Technology Export Controls and Supply Chain Security

New US export controls and tariffs on advanced AI chips to China target national security risks and reduce reliance on foreign supply chains. These measures reshape the global tech sector, influence investment strategies, and may trigger further fragmentation of technology markets.

Arctic Geopolitics and Resource Competition

Greenland’s vast mineral reserves, especially rare earths, are increasingly accessible due to climate change, attracting global interest. Strategic competition among the US, EU, Russia, and China over Arctic resources and routes directly impacts trade, investment, and supply chain strategies.

EU Trade Policy and Retaliation Tools

The EU is preparing coordinated responses to US trade pressure, including potential counter-tariffs and use of the Anti-Coercion Instrument. The risk of a broader trade conflict is rising, with EU leaders emphasizing unity and strategic action to protect European industries and uphold rules-based trade amid escalating US demands.

Iron Ore and Commodity Export Volatility

Australian iron ore exports, a cornerstone of the economy, face volatility due to pricing disputes and declining Chinese demand. This has led to a drop in the national trade surplus, highlighting the sector’s vulnerability to geopolitical and market shifts, impacting investment and economic growth.

Trade Diversification Amid US-China Tensions

Vietnam is actively diversifying trade partners and supply chains to reduce reliance on the US and China. While benefiting from supply chain shifts away from China, Vietnam faces new US tariffs (20%) and must navigate complex geopolitical dynamics to maintain export momentum and strategic autonomy.

Widespread Protests and Political Instability

Mass protests driven by economic hardship and political repression have spread nationwide, resulting in hundreds of deaths. The risk of regime change or violent crackdowns creates extreme uncertainty for investors, supply chains, and operational continuity.

Chinese Imports Challenge Local Industry

A surge in Chinese vehicle imports has widened South Africa’s trade deficit with China, threatening the competitiveness of the domestic automotive sector—a major employer and exporter. This trend may impact local manufacturing, supply chains, and trade sustainability.

Semiconductor Sector Under Geopolitical Pressure

South Korea’s semiconductor industry faces mounting pressure from US industrial policy, including demands for increased US-based production and threats of tariffs. This creates strategic dilemmas for Korean firms, affecting global supply chains and technology investment decisions.

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.

Geopolitical Tensions and Security Risks

Ongoing cross-strait tensions with China, including military posturing and economic coercion, create persistent risks for business continuity, supply chain stability, and foreign investment in Taiwan. The region remains a flashpoint with global ramifications for trade and security.

Private Sector Empowerment and State Oversight

Recent reforms elevate the private sector as a key economic driver while maintaining strong state guidance in strategic sectors. This dual approach encourages innovation and FDI but may create friction over market access and regulatory clarity for international businesses.