Cybersecurity and hybrid interference exposure

Taiwan’s critical infrastructure faces persistent cyber and influence operations alongside military ‘grey-zone’ pressure. Multinationals should anticipate higher compliance expectations, stronger incident-reporting norms, and increased operational spending on redundancy, supplier security, and data integrity.

Ruble Volatility and Financial Policy

The ruble’s real effective exchange rate surged 28% in 2025 due to trade surpluses and high interest rates, reducing inflation but hurting export competitiveness and budget revenues. Currency volatility complicates financial planning, pricing, and investment for international businesses operating in Russia.

Tax and GST compliance digitization

Authorities are shifting to data-driven, risk-based enforcement: expanded e-invoicing and automated “nudge” campaigns, plus proposed e-way bill reforms toward trusted-dealer, tech-enabled logistics. This raises auditability and system-risk exposure, especially for MSMEs and cross-border traders.

USMCA Uncertainty and Trade Policy

The 2026 USMCA review introduces significant uncertainty for Mexico’s trade and investment climate. Potential renegotiation or non-renewal, new US tariffs, and stricter rules of origin could disrupt supply chains, especially in automotive, manufacturing, and critical minerals, impacting cross-border operations and investment planning.

UK-EU Relations and Strategic Realignment

Brexit’s legacy continues to shape UK-EU cooperation. Recent US protectionism and security concerns are prompting renewed dialogue and potential closer alignment, as both sides seek stability and leverage in an increasingly fragmented global trading system.

Supply Chain Vulnerabilities in Key Sectors

French supply chains, especially in automotive, luxury goods, and agriculture, are exposed to global trade shocks and tariff threats. Disruptions risk profit margins, force supply chain realignment, and may accelerate production shifts abroad, challenging France’s industrial competitiveness.

US–Taiwan Strategic Trade Pact

The new US–Taiwan trade agreement lowers tariffs on Taiwanese exports to 15%, secures preferential treatment for key sectors, and cements Taiwan’s role as a strategic US partner. This enhances market access but may provoke Chinese retaliation and regulatory uncertainty.

Rising Construction and Compliance Costs

The Shelter Act’s imprecise technical guidelines and lack of clear state subsidies shift the financial burden to developers and buyers. This raises the cost of new projects, complicates financial planning, and may slow new investments, affecting supply chains for shelter materials and construction services.

Supply chain resilience and logistics

Tariff-driven front-loading, shifting sourcing geographies, and periodic transport disruptions are increasing inventory costs and lead-time variability. Firms are redesigning networks—splitting production, adding redundancy, and diversifying ports and carriers—raising working capital needs but reducing single-point failure exposure.

Concentration Risk in Semiconductors

Over 97% of high-end chips are still produced in Taiwan. US officials warn that any blockade or destruction of this capacity could trigger a global economic crisis, highlighting the urgent need for diversification and supply chain resilience.

Monetary Policy Shifts and Inflation

Turkey’s central bank has shifted to a cautious easing cycle, lowering the policy rate to 37% as inflation fell to 30.9% in December 2025. While investor confidence is improving, inflation volatility and policy uncertainty remain significant risks for business planning and financing.

Mercosur-EU Trade Agreement Delays

The ratification of the Mercosur-European Union trade agreement faces legal and political hurdles, with implementation potentially delayed up to two years. This uncertainty affects market access, tariff reductions, and strategic planning for exporters and investors in Brazil.

Sustainable Development And Regulatory Compliance

Vietnam’s wood and agricultural sectors are adapting to stringent international sustainability and legality standards, especially from the US and EU. Compliance with deforestation-free and traceability requirements is now essential for continued access to major export markets.

Digitalization and Technology Innovation Surge

Rapid adoption of digital tools, automation, and BIM is transforming modular construction in Germany. These advances are improving efficiency, quality control, and lifecycle management, while attracting foreign investment and enabling new business models in the sector.

Regional Security Tensions and Military Posturing

US military deployments, threats to the Strait of Hormuz, and Iran’s support for regional proxies elevate the risk of conflict. Any escalation could disrupt global energy flows and insurance costs, directly impacting supply chains and investment risk assessments.

Political-Military Influence on Policy

Military leadership’s direct involvement in economic negotiations and investment decisions signals institutional fragility. This dynamic introduces unpredictability in regulatory enforcement and business climate, impacting long-term planning and foreign investor confidence.

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.

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.

Giga-project recalibration and procurement risk

Vision 2030 mega-developments exceed $1 trillion planned value, but timelines and scope are being recalibrated as oil prices soften and execution scrutiny rises. About $115bn in contracts have been awarded since 2019, yet suppliers face more selective, longer procurement cycles.

National Privatization Strategy Expands PPPs

The new National Privatization Strategy aims to sign over 220 public-private partnership contracts and mobilize $64 billion in private investment by 2030. This initiative opens infrastructure, health, education, and logistics to foreign investors, enhancing competitiveness and operational efficiency.

USMCA Renegotiation and Trade Uncertainty

The 2026 review of the US-Mexico-Canada Agreement (USMCA/CUSMA) introduces significant uncertainty for Canadian exporters and investors. Rising US protectionism and threats to terminate the agreement could disrupt North American supply chains and alter market access for key sectors.

Sanktionsdurchsetzung und Exportkontrollen

Strengere Durchsetzung von EU-Russland-Sanktionen erhöht Compliance-Risiken. Ermittler deckten ein Netzwerk mit rund 16.000 Lieferungen im Wert von mindestens 30 Mio. € an russische Rüstungsendnutzer auf. Unternehmen müssen Endverbleib, Zwischenhändler und Dual-Use-Checks deutlich verschärfen.

US-China Economic Competition Intensifies

US-China relations remain a dominant force in global economics, with ongoing tensions over technology, trade, and security. These dynamics influence market access, regulatory risk, and supply chain resilience for international businesses operating in or sourcing from both countries.

Political Gridlock on Defense and Security

Taiwan’s $40 billion defense budget faces parliamentary opposition, raising concerns about its deterrence capabilities amid rising Chinese military activity. Political divisions could impact defense procurement, foreign confidence, and overall security stability.

Critical Supply Chain Vulnerabilities

The UK’s over-reliance on China for clean energy components and critical minerals exposes supply chains to geopolitical shocks. Disruptions could threaten up to 90,000 jobs and delay renewable energy projects, prompting calls for domestic production and diversified international partnerships.

Centralization of Political Power

General Secretary To Lam is consolidating authority, possibly merging party chief and presidency roles. This centralization may enable swift reforms but raises concerns about institutional checks, policy continuity, and long-term governance risks for international investors.

Board of Peace Alters Governance Landscape

The US-led Board of Peace, endorsed by the UN Security Council, introduces a new international governance framework for Gaza, with Israel’s participation. This body’s evolving mandate and legitimacy debates create regulatory uncertainty, affecting investment, reconstruction, and long-term business planning in the region.

UK as a Stable Investment Destination

UK leaders are leveraging global volatility to position the country as a haven for investment, emphasizing regulatory stability, financial sector strength, and innovation in AI and tech. This narrative aims to attract capital and talent, but is tested by ongoing geopolitical shocks.

Domestic Economic Policy and Inflation Management

Turkey’s central bank continues cautious monetary easing as inflation falls to 30.9% in late 2025, with targets of 16% for 2026. Policy predictability, declining inflation, and supportive infrastructure investments are expected to foster a more stable business environment, though volatility remains a concern.

Widespread Civil Unrest and Political Instability

Nationwide protests over economic collapse and political repression have resulted in hundreds of deaths and thousands of arrests. The instability has led to internet shutdowns and business disruptions, significantly raising operational and security risks for foreign firms.

US Secondary Sanctions on Iran Trade

The US imposed a 25% tariff on all countries trading with Iran, significantly affecting global energy and commodity flows. This move, alongside new sanctions on Iranian entities, increases compliance risks and operational complexity for multinationals engaged in cross-border trade, especially in energy and finance.

Strategic Investments in Recycling Infrastructure

The French government and EU are mobilizing over €1.5 billion to strengthen domestic battery recycling and reuse capacity. This investment wave is attracting international partners, reshaping the competitive landscape, and fostering joint ventures in battery circularity.

Supply Chain Realignment and Resilience

Recent trade frictions and export controls, especially involving the US, China, and Japan, are driving South Korea to diversify supply chains and pursue trilateral cooperation. This realignment is critical for mitigating risks in high-tech manufacturing and maintaining global market access.

Foreign Investment Hits Six-Year High

Foreign ownership of Korean stocks reached 37.18%, the highest since 2020, with strong inflows into semiconductors, shipbuilding, defense, and nuclear power. This trend reflects global investor confidence but also exposes Korea to external shocks and geopolitical tensions.

Foreign Direct Investment Decline

Foreign direct investment into China dropped 9.5% in 2025, reflecting investor caution amid regulatory scrutiny and geopolitical tensions. While some countries increased investments, the overall decline signals challenges for China’s business climate and global integration.

Foreign-exchange liquidity and devaluation risk

Egypt’s external financing needs keep FX availability tight, raising risks of renewed pound depreciation, import backlogs, and payment delays. Firms should plan for fluctuating LC/TT settlement, higher hedging costs, and periodic administrative controls that can disrupt procurement cycles and profit repatriation.