Macroeconomic recovery and rate cuts

Inflation has eased to around 1.8% with a stronger shekel, reopening scope for Bank of Israel rate cuts. Cheaper financing may support investment, yet currency strength can squeeze exporters and pricing, influencing hedging strategies and contract denomination choices.

Digital and privacy enforcement intensity

France’s CNIL stepped up enforcement, with 2025 sanctions reportedly totaling about €486m, focused on cookies, employee monitoring and data security. Multinationals face higher compliance costs, faster audit cycles, and greater liability for cross‑border data transfers and AI use.

USMCA renegotiation and North America risk

Signals of a tougher USMCA review and tariff threats elevate uncertainty for integrated US‑Canada‑Mexico manufacturing, notably autos and batteries. Firms should stress-test rules-of-origin compliance, cross-border inventory strategies, and contingency sourcing as negotiations and enforcement become more politicized.

Volatile US rate-cut expectations

Markets are highly sensitive to clustered US labor, retail, and CPI releases, with shifting expectations for 2026 Fed cuts. Exchange-rate and financing-cost volatility impacts hedging, M&A timing, inventory financing, and emerging-market capital flows tied to US dollar liquidity.

Digital-government buildout and procurement

Government is accelerating cloud/AI adoption and “digital cleanup,” with digital-government development budget cited near 10bn baht for FY2027 and agencies targeting much higher IT spend. Opportunities rise for cloud, cybersecurity, and integration vendors, alongside procurement and interoperability risks.

Multipolar payments infrastructure challenge

Growth in non-dollar payment plumbing—CBDCs, mBridge-type networks, and yuan settlement initiatives—incrementally reduces reliance on USD correspondent banking. Firms face fragmentation of rails, higher integration costs, and strategic decisions on invoicing currencies and liquidity buffers.

China EV import quota tensions

A new arrangement allows up to 49,000 Chinese-made EVs annually at low duties, while excluding them from new rebates. This creates competitive pressure on domestic producers and raises security, standards, and political-risk concerns—potentially triggering U.S. retaliation or additional screening measures.

Power-demand surge from AI buildout

Rising electricity demand from data centers and semiconductor fabs is explicitly cited in LNG procurement plans. This increases exposure to grid constraints, permitting timelines, and power-price volatility, influencing site selection, capex schedules, and long-term PPAs for foreign investors.

Cybersecurity enforcement and compliance

Regulators are escalating cyber-resilience expectations. A landmark ASIC case imposed A$2.5m penalties after a breach leaked ~385GB of client data affecting ~18,000 customers, signalling higher compliance burdens, greater board accountability, and heightened due diligence requirements for vendors handling sensitive data.

Halal certification mandate October 2026

Indonesia will enforce a broad “mandatory halal” regime from October 2026, and authorities are accelerating certification for SMEs and market traders. Importers and FMCG, pharma, and cosmetics firms must adjust labeling, ingredient traceability, audits, and supply-chain documentation to avoid disruption.

Fiscal consolidation and debt trajectory

The IMF urges a clearer debt rule as Treasury projects gross debt near 77.9% of GDP. Prospective tightening to reach primary surpluses may constrain infrastructure spending, affect SOE support, and influence taxes and public procurement—key inputs for investor risk pricing.

Trade controls and anti-circumvention squeeze

Sanctions are broadening beyond energy to metals, chemicals, critical minerals (over €570m cited), plus export bans on dual-use goods and services. New anti-circumvention tools may restrict exports to high‑risk transshipment hubs, tightening supply of machinery, radios, and industrial inputs to Russia-linked supply chains.

Geopolitical trade disruptions risk

Turkey’s regional diplomacy and conflict spillovers in the Black Sea and Middle East raise sudden policy-shift risk for trade flows, shipping insurance, and supplier reliability. Companies should stress-test routes through the Turkish Straits, Eastern Med, and nearby land corridors.

Rising wages and labor tightness

Regular wages rose 3.09% in 2025 to NT$47,884, with electronics overtime at 27.9 hours—highest in 46 years—reflecting AI-driven demand and labor constraints. Cost inflation and capacity bottlenecks may pressure contract terms, automation capex, and talent retention strategies.

Nickel quota tightening and oversight

Indonesia’s nickel supply outlook is tightening amid plans to cut ore quotas and delays in RKAB approvals and MOMS verification, lifting benchmark prices. Separately, reporting lapses at major smelters highlight regulatory gaps. EV-battery supply chains face price, compliance, and continuity shocks.

Sanctions, compliance, crypto enforcement

Ukraine is expanding sanctions against entities and individuals supporting Russia’s defence and financial networks, including crypto payment and mining channels linked to component procurement. This raises counterparty, KYC/AML and re-export control burdens for regional traders and service providers, especially across hubs like UAE and Hong Kong.

Port and logistics labor fragility

U.S. supply chains remain exposed to labor negotiations and operational constraints at major ports and logistics nodes. Even localized disruptions can ripple into inventory shortages, demurrage costs, and missed delivery windows, pushing firms toward diversification, buffering, and nearshore warehousing.

DHS funding instability and disruptions

Recurring DHS funding standoffs and partial shutdowns threaten operational continuity for TSA, FEMA reimbursements, Coast Guard readiness, and CISA cybersecurity deployments, while ICE enforcement remains funded. Businesses should anticipate travel friction, disaster-recovery payment delays, and security-service gaps.

USMCA Review and North America Rules

Washington and Mexico have begun talks ahead of the July 1 USMCA joint review, targeting tougher rules of origin, critical‑minerals cooperation, and anti‑dumping measures. Automotive and industrial supply chains face redesign risk, while Canada‑US tensions add uncertainty for trilateral planning.

Cybersecurity regulation tightening

Israel is advancing its first permanent cyber law, expanding National Cyber Directorate powers and requiring immediate incident reporting for “critical” entities (potentially 400–600 firms). Multinationals face higher compliance, disclosure, and vendor-management obligations across Israeli operations.

Non‑tariff barrier negotiation squeeze

U.S. pressure is expanding from tariffs to Korean rules on online platforms, agriculture/quarantine, IP, and sector certifications. Firms should expect compliance costs, product approval delays, and heightened trade-law scrutiny as Korea–U.S. FTA mechanisms and side talks intensify.

Higher-rate volatility and costs

RBA tightening bias after lifting the cash rate to 3.85% amid core inflation ~3.4% and capacity constraints increases borrowing-cost uncertainty. Expect impacts on capex hurdle rates, commercial property, consumer demand, and FX. Treasury functions should extend hedging horizons and liquidity buffers.

Currency volatility and multiple rates

Exchange‑rate distortions and attempted unification efforts have fueled dollar demand and rial depreciation, amid allegations of delayed oil‑revenue repatriation. This elevates pricing uncertainty, contract renegotiations, and payment risk for importers/exporters, and strengthens grey‑market channels for procurement and settlement.

Secondary Iran trade penalties

An executive order authorizes ~25% additional tariffs on imports from countries trading with Iran, effectively extending secondary sanctions through border measures. Multinationals must intensify supply-chain and customer screening, reassess third-country exposure, and anticipate retaliation and compliance costs.

Cyber defense and compliance tightening

Japan is strengthening “active cyberdefense” institutions and pushing tougher security expectations, including in financial and critical infrastructure segments. Multinationals should anticipate higher incident-reporting, supplier security audits, and operational resilience requirements across Japan-based networks.

Ports and hubs targeted abroad

EU proposals to sanction Georgia’s Kulevi and Indonesia’s Karimun terminals signal a new precedent: third-country infrastructure enabling Russian oil may be designated. This expands due diligence from Russian entities to global transshipment nodes, increasing disruption risk in Asia and the Black Sea.

Trade compliance and reputational exposure

Scrutiny of settlement-linked trade and corporate due diligence is intensifying, including EU labeling and potential restrictions. Companies face heightened sanctions, customs, and reputational risks across logistics, retail, and manufacturing, requiring enhanced screening, traceability, and legal review.

Sanctions enforcement and secondary risk

U.S. sanctions on Russia, Iran, Venezuela, and related maritime “shadow” networks are increasingly enforced with supply-chain due diligence expectations. Counterparties, insurers, shippers, and banks face heightened secondary exposure, trade finance frictions, and cargo-routing constraints for energy and dual-use goods.

Shipbuilding rivalry in LNG boom

Qatar’s planned LNG expansion (77 to 142 mtpa by 2030) could trigger ~70 new LNG carrier orders, intensifying Korea–China competition. Korean yards retain quality advantages, but China is narrowing delivery times—impacting procurement strategies, pricing, and maritime supply chains.

US trade deal and tariffs

Vietnam is negotiating a “reciprocal” trade agreement with the US as its 2025 surplus hit about US$133.8bn, raising tariff and transshipment scrutiny. Outcomes will shape market access, rules of origin compliance, and investor decisions on Vietnam-based export platforms.

Maritime security and tanker seizures

Washington is weighing direct seizure of Iranian oil tankers in international waters, while Iran has seized foreign‑crewed vessels near Farsi Island. This elevates war-risk premiums, route diversions and force‑majeure clauses for Gulf trade, impacting energy, chemicals and container flows through Hormuz.

Tighter inbound investment screening

CFIUS scrutiny is broadening beyond defense into data-rich and “infrastructure-like” assets, raising execution risk for cross-border M&A and minority stakes. Investors should expect longer timelines, mitigation demands, and valuation discounts for sensitive data, education, and tech targets.

Gaza spillovers and border constraints

Rafah crossing reopening remains tightly controlled, with limited throughput and heightened security frictions. Ongoing regional instability elevates political and security risk, disrupts overland logistics to Levant markets, and can trigger compliance and duty-of-care requirements for firms.

Immigration settlement reforms and workforce risk

Home Office proposals to extend settlement timelines from five to ten-plus years could affect 1.35m legal migrants, including ~300,000 children, with retrospective application debated. Employers may face retention challenges, higher sponsorship reliance, and more complex mobility planning.

Semiconductor controls and compliance risk

Export controls remain a high‑volatility chokepoint for equipment, EDA, and advanced nodes. Enforcement is tightening: Applied Materials paid $252m over unlicensed shipments to SMIC routed via a Korea unit. Multinationals face licensing uncertainty, audit exposure, and rerouting bans affecting capex timelines.

US–China tech controls tightening

Advanced semiconductor and AI chip trade remains heavily license-bound. Recent U.S. scrutiny over Nvidia H200 terms and penalties for tool exports to Entity-Listed firms signal elevated enforcement risk, end-use monitoring, and disruption to China-facing revenue, R&D collaboration, and capex plans.