Energy Nationalism and Payment Stress

Mexico’s energy framework continues to favor Pemex and CFE, with permit delays, tighter fuel rules and more centralized regulation. U.S. authorities say Pemex still owes over $2.5 billion to American suppliers, raising counterparty, compliance and investment risks for energy-linked businesses.

Border Efficiency Improves Trade Corridors

South Africa and Mozambique are making tangible progress at the Lebombo/Ressano Garcia crossing through co-located processing, digital customs upgrades and a planned one-stop border post. Shorter truck delays can improve corridor reliability, especially for Maputo-linked exports and time-sensitive regional supply chains.

Reform Momentum Boosts Investment

The government is using structural reform and the GNU’s relative stability to rebuild investor confidence, targeting R2 trillion in pledges for 2026-2030. Ratings improvement, FATF grey-list exit and regulatory streamlining support FDI, though implementation credibility still matters.

Water Infrastructure Risks Intensify

Water insecurity is emerging as a growing operational and political risk. Treasury is mobilising reforms and investment, while South Africa still depends heavily on Lesotho water transfers supplying about 60% of Johannesburg’s needs, exposing business to service and regional bargaining risks.

Tax reform execution risk

The dual-VAT transition is advancing, with IBS/CBS regulation expected shortly, but implementation remains costly and complex. Estimates suggest adaptation costs could reach R$3 trillion by 2033, forcing companies to overhaul ERP, invoicing, contracts, logistics, and tax compliance during a prolonged overlapping regime.

Domestic Deleveraging Demand Drag

Tighter household debt controls and mortgage renewal restrictions are part of a broader deleveraging push, with authorities targeting household loan growth of 1.5% or less. While improving financial stability, weaker property activity and consumer demand could soften domestic sales, logistics demand, and business sentiment.

Energy Security and Fuel Exposure

Australia’s acute fuel dependence remains a top operational risk, with roughly 90% of liquid fuels imported and around a quarter sourced from Singapore. Middle East disruption, higher freight costs and government-backed emergency cargoes raise transport, manufacturing and logistics risks.

Energy Security Infrastructure Push

Ministers are accelerating nuclear and broader domestic energy security measures, including legislation to speed projects and support critical infrastructure. With £120 billion in public investment cited, businesses should expect opportunities in power, grids, and SMRs, alongside continued policy volatility in hydrocarbons.

Labor platform rules uncertain

Brazil’s proposed regulation for app-based work remains unsettled, with divisions over minimum pay, social contributions, insurance, and worker classification. Potential changes could alter last-mile delivery costs, urban mobility pricing, and platform operating models, affecting retail, food delivery, and gig-dependent supply chains.

CPEC Assets Face Financial Strain

China-linked power and infrastructure projects remain commercially significant, but rising arrears to Chinese independent power producers highlight payment and contract risks. With CPEC liabilities embedded in the energy crisis, investors face heightened concerns over sovereign guarantees, renegotiation exposure and project bankability.

Selective Tariff Liberalization Strategy

India is reducing duties on key industrial inputs, EV battery materials, electronics components and life-saving medicines while preserving high protection in sensitive sectors. This mixed regime supports domestic manufacturing, but requires foreign firms to navigate sector-specific tariff advantages and restrictions.

Weather-Driven Cruise Schedule Volatility

Vanuatu tourism authorities report recent cruise cancellations in Port Vila largely due to inclement weather, underscoring itinerary fragility. For private island operations, irregular calls can disrupt provisioning, staffing, vendor revenues, and passenger-spend forecasts while complicating long-term capacity planning and returns.

Tourism and services investment

Tourism remains a major diversification channel, with total committed sector investment reaching SAR452 billion and private capital contributing SAR219 billion. The sector recorded 122 million tourists in 2025, creating opportunities in hospitality, retail, aviation, logistics, and consumer services.

Defense Spending and Export Liberalization

Record defense outlays, including ¥9.04 trillion in the FY2026 budget, are strengthening aerospace, industrial, and advanced manufacturing demand. Planned easing of arms-export rules could expand overseas sales, deepen allied industrial cooperation, and create new compliance and reputational considerations for suppliers.

USMCA Review and Tariff Pressure

Mexico faces prolonged USMCA review uncertainty into 2027, with U.S. pressure on energy, autos, steel and Chinese investment. Possible tighter rules of origin, existing 25% auto tariffs and 50% steel-related duties could disrupt North American trade flows and investment planning.

Autos EVs And Shipbuilding

Beyond chips, industrial exports remain resilient. Auto exports rose 2.2% to $6.37 billion despite logistics disruption, EV sales climbed 150.9% in the first quarter, and Korean yards secured 19 vessel orders in 25 days, supporting manufacturing investment and maritime supply chains.

Skilled Migration Cost Reset

Australia raised employer-sponsored visa salary thresholds to AUD 76,515, with specialist roles at AUD 141,210, to align migrant pay with domestic wages. The move improves labour-market integrity but raises hiring costs and compliance burdens for employers facing persistent skills shortages.

Major Port Expansion Momentum

Canada is committing large-scale capital to trade corridors, led by Montreal’s Contrecoeur expansion. Backed by C$1.16 billion from the Canada Infrastructure Bank, the project will add 1.15 million TEUs and materially strengthen eastern gateway capacity by 2030.

US-China Trade Frictions Persist

Despite a tariff truce and planned leader-level engagement, bilateral trade remains structurally strained. The US goods deficit with China fell 32% in 2025 to $202.1 billion, while tariffs, export controls and investigations continue driving compliance costs, market uncertainty and supply-chain diversification.

External Financing And Reforms

Ukraine’s macro stability depends on external funding tied to reforms. A €90 billion EU loan remains blocked, while missed milestones threaten over €3.9 billion from the Ukraine Facility and $3.35 billion from the World Bank, affecting public payments and project continuity.

Sectoral U.S. Tariffs Squeeze Manufacturing

U.S. tariffs are materially damaging Canadian manufacturing, with steel exports to the U.S. reportedly down 50% year-on-year in December and auto-parts employment down 9.5%. Firms are cutting production, delaying capital expenditure and facing greater import competition inside Canada, raising operational and supply-chain risks.

Cross-Border Hydrogen Networks Expand

Despite delays, new hydrogen links are emerging through Hamburg’s HH-WIN network and the first Dutch connection to Germany’s core hydrogen grid, targeted for 2027. These corridors improve long-term supply optionality, industrial clustering, and import-based decarbonization opportunities for internationally exposed manufacturers.

China Asia Pivot Deepens

Russia is relying more heavily on Asian demand, especially China and India, for oil, LNG, and logistics diversification. This deepens yuan-based settlement, commodity concentration, and political dependency, while creating uneven access and bargaining power for foreign firms across Eurasian supply chains.

North American supply-chain compliance squeeze

Canadian exporters have sharply raised CUSMA compliance to avoid tariffs, with declared preferential treatment rising from 35.5% in December 2024 to 78.7% by July 2025. While protective short term, stricter rules of origin would increase auditing, sourcing and financing burdens.

Deflation and Weak Domestic Demand

China is in a prolonged low-price environment, with producer prices reportedly falling for 40 consecutive months and the GDP deflator still negative. Weak consumption, fragile employment, and pricing pressure are squeezing margins, complicating revenue forecasts, and limiting the strength of domestic-market growth strategies.

Trade Exposure To External Shocks

Indonesia remains vulnerable to external disruptions from Middle East energy routes, U.S. trade actions, and capital outflows. Pressure on fuel imports, the rupiah, and sovereign ratings can quickly transmit into freight costs, hedging needs, and foreign-investment risk premiums across sectors.

Power Transition Needs Clarity

Vietnam is pushing renewables under JETP, targeting roughly 47% of power capacity by 2030 and no new coal plants. Yet investors still cite unclear rules for DPPAs, storage, and project finance, creating near-term uncertainty for energy-intensive manufacturers and green investment decisions.

State asset sales acceleration

Cairo is advancing privatizations, including four divestment deals worth $1.5 billion, temporary listings for 20 state firms, and airport concessions. This expands entry opportunities in logistics, renewables, finance and infrastructure, but execution risk and valuation transparency remain material for investors.

Defense Spending And Procurement Uncertainty

Political deadlock over a proposed NT$1.25 trillion special defense budget clouds procurement, resilience planning, and business sentiment. Delays in US weapons deliveries and debate over burden-sharing affect perceptions of deterrence credibility, which directly shapes long-term investment risk premiums.

Conflict-Driven Shipping Cost Pressures

Global conflict is raising India’s freight costs through rerouting, war-risk surcharges, congestion, and longer transit times. Exporters in agriculture, textiles, chemicals, petroleum products, and engineering goods face margin pressure, forcing greater use of alternate ports, green corridors, and inventory buffers.

Highway Insecurity and Cargo Disruption

Security on freight corridors is a direct supply-chain risk, highlighted by nationwide trucker blockades and persistent cargo theft. Officially, 6,263 cargo-robbery investigations were opened in 2025, while industry estimates exceed 16,000 incidents yearly, raising insurance costs, route complexity, inventory buffers and delivery uncertainty for domestic and cross-border operations.

Energy Import Exposure Intensifies

Turkey’s heavy dependence on imported oil and gas is amplifying macro and supply-chain vulnerability. The central bank estimates a permanent 10% oil-price rise adds 1.1 percentage points to inflation and worsens the annual energy balance by $3-5 billion.

Competitiveness and Investment Leakage

Germany is struggling to retain private capital as firms increasingly invest abroad; reports cite net direct investment outflows above €60 billion in 2024. High regulation, labor costs, and weak returns are undermining domestic expansion, supplier footprints, and international investment confidence.

Weaker Investment and Growth Sentiment

Tariff uncertainty has weighed on confidence, hiring, and capital expenditure, while US growth slowed to 2.1% in 2025 from 2.8% in 2024. Foreign direct investment reportedly fell to $288.4 billion, signaling caution for cross-border investors assessing US market commitments and returns.

Inflation, Fuel and Fiscal Stress

War-related energy and transport shocks are feeding inflation and budget pressure. Gasoline prices rose 14.7% to 8.05 shekels per liter, the policy rate stayed at 4%, and higher defense spending is complicating deficit management, tax expectations and medium-term sovereign risk assessments.

Energy Supply Gap and Import Dependence

Domestic gas output remains below demand, with production near 4.1 bcf/day against roughly 6.2 bcf/day consumption. Disruptions to Israeli gas and rising LNG reliance are lifting input costs, raising outage risks, and pressuring energy-intensive manufacturers and industrial supply chains.