Supply Chain Infrastructure Modernization

Major investments in logistics, freight, and facility management are underway, with the market projected to reach USD 37.8 billion by 2031. Enhanced infrastructure and integrated services improve operational efficiency and regional connectivity for global businesses.

Deforestation and Environmental Risk

Deforestation in the Cerrado and Amazon remains a major concern, with over 8.5 million hectares lost in five years. New EU regulations targeting deforestation-linked commodities threaten Brazilian exports, while domestic policies and enforcement are intensifying to meet climate commitments.

Electricity grid reform uncertainty

Eskom’s revised unbundling keeps transmission assets inside Eskom, limiting the new TSO’s ability to raise capital for urgent grid expansion. Business warns this policy “U-turn” could prolong grid constraints, delay renewables connections, and revive supply insecurity for operations.

Japan-China Tensions and Economic Security

Escalating tensions with China, including sanctions and military posturing, have led Japan to fortify its economic security laws, diversify supply chains, and boost domestic chip production. These measures are crucial for international businesses exposed to regional disruptions and coercive economic tactics.

Critical Minerals Supply Chain Realignment

Australia is rapidly expanding its critical minerals sector, including rare earths, lithium, gallium, and scandium, to reduce reliance on China and support allied supply chains. Strategic stockpiles and new mining projects are reshaping global supply chains, attracting major international investment and government backing.

Strategic Use of Tariffs in US Trade Policy

The US increasingly leverages tariffs not only for economic aims but as instruments of foreign policy and negotiation. This approach affects global trade patterns, introduces market uncertainty, and requires businesses to adapt to rapidly shifting tariff regimes and compliance requirements.

Port attacks disrupt Black Sea

Repeated strikes on Odesa-area ports and logistics assets are cutting export earnings by about US$1bn in early 2026 and reducing grain shipment capacity by 20–30%. Higher freight, insurance, and rerouting to rail constrain metals and agrifood supply chains.

Data-center edge boosts XR

Finland’s rapid data‑center buildout and edge computing expansion strengthen local capacity for low‑latency XR rendering and industrial digital twins, improving service reliability for exports. However, proposed electricity-tax changes and grid constraints may reshape operating costs and location choices.

AI and Advanced Technology Leadership

Taiwan is leveraging its semiconductor and AI expertise to become a strategic partner for the US in artificial intelligence. Major investments target AI infrastructure, with TSMC and others expanding R&D and production, reinforcing Taiwan’s centrality in the global tech ecosystem.

Energy Sector Expansion and Regional Integration

Israel’s approval of $2.4 billion in new investment for the Leviathan gas field and a $30 billion export deal with Egypt position it as a regional energy hub. These developments enhance energy security and competitiveness, but require ongoing infrastructure modernization and geopolitical risk management.

Federal Reserve Policy and Political Pressure

The Federal Reserve has paused rate cuts at 3.6%, balancing persistent inflation (2.8%) and labor market stagnation. Political pressure from President Trump to lower rates and ongoing investigations into Fed leadership have raised concerns about central bank independence. Market expectations for further cuts in 2026 are muted, with Fed credibility and leadership transitions under intense scrutiny—factors that directly impact capital flows, currency valuation, and investment strategies.

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.

Environmental Enforcement and Permit Revocations

Indonesia has revoked permits for 28 companies, mainly in forestry, mining, and plantations, due to illegal deforestation and environmental violations. This signals stricter enforcement, affecting supply chains and compliance costs for resource-dependent industries.

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.

Water infrastructure failure risk

Water and sanitation systems face an estimated R400 billion rehabilitation backlog, with many municipalities rated “poor” or “critical.” Recent Gauteng outages affected up to 10 million people after power trips. Operational disruption risks include plant shutdowns, hygiene, and industrial downtime.

Afreximbank and Regional Integration

South Africa’s accession to Afreximbank unlocks up to $11 billion in funding for infrastructure, energy, and industrialization. This supports value-added manufacturing, Black business participation, and deeper integration into the African Continental Free Trade Area, enhancing regional trade prospects.

Energy tariffs and circular-debt risk

Power pricing, gas availability, and circular-debt reforms directly affect industrial competitiveness. Recent tariff cuts for industry may support exports, but ongoing sector restructuring implies continued volatility in energy costs, outages, and subsidy policy—key variables for manufacturing site selection and contracts.

Critical Minerals and Resource Security

The US government’s $2.5 billion push for domestic critical mineral production is reshaping investment in mining and advanced manufacturing. New contracts and legislation aim to reduce import dependency, enhance national security, and support resilient supply chains.

Data (Use and Access) Act

Core provisions of the UK Data (Use and Access) Act entered into force, expanding ICO powers to compel interviews and technical reports and enabling fines up to £17.5m or 4% of global turnover under PECR. Compliance programs, AI/data governance, and cross-border data strategies may need recalibration.

Market Transparency and Capital Outflows

Indonesia’s stock market suffered an $80 billion rout in January 2026 after MSCI flagged transparency and ownership concerns, threatening a downgrade to frontier market status. Regulatory reforms, including a 15% free float requirement, are underway, but investor confidence and foreign capital flows remain fragile.

EU Trade Policy Realignment and Protectionism

Germany is navigating shifting EU trade policies, including new deals with India and Mercosur, and stricter rules on public funding for non-European production. Rising protectionism and regulatory changes could alter market access, supply chain strategies, and compliance costs for multinationals.

Regulatory push for digital sovereignty cloud

France continues to steer sensitive workloads toward “sovereign” cloud and security certifications (e.g., SecNumCloud), affecting public procurement and regulated sectors. Non-EU hyperscalers may need partnerships or ring-fenced operations; compliance can reshape IT sourcing.

US-UK Tariff Tensions Escalate

President Trump’s imposition of 10–25% tariffs on UK exports over the Greenland dispute threatens to cost UK businesses £6–15bn and risks recession. The uncertainty disrupts trade, supply chains, and investment planning, with sectors like manufacturing and chemicals most exposed.

EV overcapacity and trade defenses

China’s EV, battery, and solar sectors face margin pressure from domestic overcapacity alongside expanding foreign trade defenses (anti-subsidy probes, local-content rules). Exporters and investors should expect higher tariffs, forced supply-chain restructuring, and increased scrutiny of subsidies and pricing.

USMCA review and stricter origin

The 2026 USMCA joint review is moving toward tighter rules of origin, stronger enforcement, and more coordination on critical minerals. North American manufacturers should expect compliance burdens, sourcing shifts, and potential disruption to duty-free treatment for borderline products.

Robust Non-Oil Growth Bolsters Economic Outlook

Saudi Arabia’s GDP grew 4.5% in 2025, with non-oil sectors expanding 4.9%. Sustained growth in non-hydrocarbon industries is enhancing economic resilience, supporting demand for international goods and services, and diversifying the Kingdom’s role in global supply chains.

Semiconductor Tariffs and Industrial Policy

The US is combining higher chip tariffs with conditional exemptions tied to domestic capacity commitments, using firms like TSMC as leverage. A 25% tariff on certain advanced chips raises costs short‑term but accelerates fab investment decisions and reshapes electronics sourcing strategies.

Semiconductor and Technology Sector Push

Vietnam is prioritizing the development of its semiconductor and technology industries, including chip fabrication and critical minerals processing. Collaboration with the EU and other partners aims to move Vietnam up the value chain, supporting high-tech investment and innovation ecosystems.

Severe Currency Collapse and Hyperinflation

Iran’s rial has plunged to over 1.4 million per U.S. dollar, fueling hyperinflation and eroding purchasing power. This economic crisis has triggered mass protests, disrupted domestic demand, and created severe payment risks for international exporters and investors.

Northern Sea Route and Arctic Ambitions

Russia’s development of the Northern Sea Route, with Chinese and Indian involvement, aims to create a major Eurasian trade corridor. While promising shorter Asia-Europe shipping, the project faces geopolitical risks, environmental concerns, and possible sanctions exposure for participating firms.

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.

Supply Chain Disruption and Resilience Imperatives

Australian supply chains face persistent disruption from geopolitical fragmentation, labor shortages, and shifting trade rules. Recent surveys show a strategic divide among leaders, with resilience, diversification, and digital transformation emerging as top priorities for international business continuity.

Gaza Conflict Drives Regional Instability

The ongoing Israel-Gaza conflict and its aftermath continue to disrupt supply chains, trade flows, and investor sentiment. Border controls, humanitarian access, and security risks remain volatile, impacting logistics, foreign investment, and business operations across the region.

Macroprudential tightening hits credit

BDDK and the central bank tightened consumer and FX-credit rules: card limits must align with documented income, unused high limits can be reduced, restructuring is capped, and FX-loan growth limits were cut to 0.5% over eight weeks. Expect tighter liquidity and financing.

Baht strength and financing conditions

The baht appreciated strongly in 2025 and stayed firm into 2026, pressuring export and tourism competitiveness while lowering import costs. With possible rate cuts but rising long-end yields, corporates face mixed funding conditions, FX hedging needs, and margin volatility.

Defence build-up drives local content

Defence spending is forecast to rise from about US$42.9bn (2025) to US$56.2bn (2030), with acquisitions growing fast. AUKUS-linked procurement, shipbuilding and R&D will expand opportunities, but also stricter security vetting, ITAR-like controls, and supply-chain localization pressures.