AUKUS industrial expansion and controls

AUKUS submarine construction investment at Osborne is scaling defence manufacturing, workforce and secure supply chains. Businesses may see new contracts but also tighter export controls, security vetting, cyber requirements and supply assurance obligations across dual-use technologies and components.

Massive infrastructure investment pipeline

The government’s Plan Mexico outlines roughly 5.6 trillion pesos through 2030 across energy and transport, including rail, roads and ports. If executed, it could ease logistics bottlenecks for exporters; however, funding structures, permitting timelines and local opposition may delay benefits.

Climate law and carbon pricing momentum

Thailand is advancing a first comprehensive Climate Change Act, with carbon-pricing and emissions-trading elements discussed in public reporting. Exporters to the EU and other low-carbon markets will face rising MRV and product-footprint demands, influencing supplier selection and capex.

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.

Tax and cost-base reset

Budget-linked measures raise employer National Insurance to 15% (from April 2025) and change pension salary-sacrifice NI from 2029/30, expected to raise £4.8bn initially. Combined with business-rates changes, this tightens margins and alters location, hiring, and pricing strategies.

Import licensing and quota uncertainty

Businesses report delays and sharp quota cuts in import permits (e.g., frozen beef private quota cut from 180,000 to 30,000 tons), alongside tighter controls on fuel import quotas for private retailers. This heightens operational uncertainty for food, hospitality, and downstream distribution networks.

Kommunale Wärmeplanung steuert Nachfrage

Die kommunale Wärmeplanung entscheidet, wo Wärmenetze ausgebaut werden und wo dezentral (Wärmepumpe/Biomasse) dominiert. Unterschiedliche Planungsstände und Fristen erzeugen stark regionale Nachfrage-Cluster, beeinflussen Standortwahl, Vertriebsnetze, Lagerhaltung sowie Projektpipelines internationaler Wärme- und Infrastrukturinvestoren.

Red Sea shipping risk premium

Houthi attacks on Israel-linked vessels are suspended but conditional on Gaza calm, leaving a fragile ceasefire. Insurers and carriers maintain high-risk routing assumptions in Red Sea/Bab el-Mandeb, impacting transit times, freight costs, and reliability for Israel-related supply chains.

Energy transition and green hydrogen scaling

India is driving rapid renewables and green hydrogen cost declines (recent bids near ~$3.08/kg reported), supported by incentives and grid/transmission waivers. This creates opportunities in industrial decarbonisation supply chains (electrolysers, components), but raises offtake, pricing, and infrastructure execution risks.

Lira Volatility and FX Liquidity

Structurally weak long-term capital inflows and limited buffers keep USD/TRY risk elevated, raising import costs and FX debt-service burdens. Market surveys still price ~51–52 USD/TRY horizons, implying ongoing hedging needs, tighter treasury controls, and higher working-capital requirements for import-dependent sectors.

State-led investment via Danantara

Danantara is centralizing SOE assets and launching about US$7bn in downstream “hilirisasi” projects, while signaling possible market interventions and strategic acquisitions. The model can accelerate infrastructure and processing capacity, but raises governance, competition, and expropriation-perception risks for foreign partners.

Energy security via LNG contracting

With gas around 60% of Thailand’s power mix and domestic supply shrinking, PTT, Egat, and Gulf are locking in 15-year LNG contracts (e.g., 1 mtpa and 0.8 mtpa deals starting 2028). Greater price stability supports manufacturers, but contract costs and pass-through remain key.

Palm oil biofuels and export controls

Indonesia is maintaining B40 biodiesel in 2026 and advancing aviation/bioethanol initiatives, while leadership signaled bans on exporting used cooking oil feedstocks. Policy supports energy security and domestic processing, but can tighten global vegetable oil supply, alter contracts, and increase input-cost volatility.

US/EU trade rules tightening

Thailand faces heightened external trade-policy risk: US tariff uncertainty and monitoring of transshipment, while EU market access increasingly hinges on CBAM, waste-shipment rules and standards. Firms must strengthen origin compliance, traceability, documentation and supplier due diligence to protect exports.

Baht volatility and US watchlist

Thailand’s placement on the US Treasury currency watchlist and central bank efforts to curb baht swings—incl. tighter online gold-trading limits (50m baht/day cap from March 1)—raise FX-management sensitivity. Export pricing, profit repatriation, and hedging costs may shift.

Broader mineral export-ban expansion

Indonesia is considering extending raw-material export bans beyond nickel and bauxite to additional minerals (e.g., tin) to force domestic processing. This raises policy and contract risk for traders while creating opportunities for investors in smelters, refining, and industrial-park infrastructure.

Defense buildup and dual-use compliance

Faster defense spending toward ~2% of GDP and deeper aerospace/space programs increase procurement opportunities but tighten export-control, ITAR-style and dual-use compliance across primes and suppliers, especially those with China-linked inputs or sales.

Dual-use tech and connectivity controls

Ukraine is tightening control over battlefield-relevant connectivity, including whitelisting Starlink terminals and disabling unauthorized units used by Russia. For businesses relying on satellite connectivity and IoT, this signals stricter verification requirements, device registration, and heightened cyber and supply risks.

Renewed US tariff escalation risk

Washington signals possible reversion to 25% tariffs, tying relief to South Korea’s $350bn US-investment pledge and progress on “non‑tariff barriers.” Uncertainty raises landed costs and disrupts pricing, contract terms, and US-facing automotive, pharma, and biotech supply chains.

Energy grid strikes, blackout risk

Russia’s intensified strikes on power plants, pipelines and cables have produced recurring outages and higher industrial downtime. The NBU estimates a 6% electricity deficit in 2026, shaving ~0.4pp off growth and raising operating costs, logistics disruption and force-majeure risk.

Accelerating LNG exports and permitting

The administration is fast-tracking U.S. energy production and LNG export approvals, reshaping global gas supply and contracting. Cheniere filed for a major Corpus Christi expansion to ~49 mtpa; U.S. LNG exports were ~111 mtpa in 2025, with ~100 mtpa more under construction for 2027–2030.

Auto sector pivots amid China exposure

Japan’s auto and parts makers are adjusting EV strategies while managing China-linked vulnerabilities in semiconductors and rare-earth-dependent components. Supply assurance, qualification of alternate suppliers, and localization are becoming competitive differentiators, affecting JVs, sourcing, and inventory policies.

Reserve service reforms and labor supply

Planned reductions in reservists on duty (e.g., 60,000 to 40,000 daily) and reserve-day caps aim to save billions of shekels after heavy mobilization costs. While easing long-term labor disruption, near-term policy shifts can affect workforce availability and project scheduling.

Power tariffs and circular debt

Energy-sector reform remains central to IMF conditionality. Tariff redesign and circular-debt containment can shift cost burdens between households and industry, affecting margins, plant uptime and pricing. Investors face policy risk around subsidies, DISCO recoveries, and contract enforcement in generation and distribution.

Monetary easing, inflation volatility

Bank Rate is 3.75% after a close 5–4 vote, with inflation about 3.4% and forecasts near 2% from spring. Shifting rate-cut timing drives sterling moves, refinancing costs, commercial property valuations, and UK project hurdle rates for investors.

Strike disruptions across logistics

A renewed strike cycle is hitting transport and services: Lufthansa cancellations reached ~800 flights affecting ~100,000 passengers, while further rail and public‑sector actions are possible from March. Recurrent stoppages raise lead times, logistics costs and contingency needs.

US–China trade realignment pressure

South Africa is navigating rising US trade frictions, including 30% tariffs on some exports and lingering sanctions risk, while deepening China ties via a framework/early-harvest deal promising duty-free access. Firms should plan for rules-of-origin, retaliation and market diversification.

UK–EU trade frictions persist

Post-Brexit trade remains exposed to SPS checks, rules-of-origin compliance and periodic regulatory updates under the Trade and Cooperation Agreement. Firms face continuing customs/admin costs, inventory buffers, and re-routing decisions, especially in food, chemicals, automotive and retail.

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.

Global trade remedies against overcapacity

Rising anti-dumping and safeguard actions targeting China-made steel and other industrial goods reflect persistent overcapacity and subsidization concerns. More tariffs, quotas, and investigations increase landed costs, disrupt procurement, and heighten retaliation risk across unrelated sectors, including commodities.

Montée en puissance défense

La base industrielle de défense accélère, avec capacités en hausse et recrutements, tandis que l’UE oriente davantage d’achats vers l’industrie européenne. Effets: opportunités export, exigences de conformité, priorisation des commandes publiques et tensions sur compétences industrielles.

Trade-Driven Logistics and Port Demand Swings

Tariff uncertainty is already distorting shipping patterns, with importers attempting to ‘pull forward’ volumes ahead of duties and then cutting orders. The resulting volatility elevates congestion, drayage and warehousing costs, and demands more flexible routing and inventory buffers.

Critical minerals weaponization risk

China’s dominance in rare-earth processing (often cited near 90%) and other critical inputs sustains leverage via export licensing and controls. Western countermeasures—stockpiles, price floors, and minerals blocs—raise structural fragmentation risk, driving dual sourcing, inventory buffers, and higher input costs.

Water treaty and climate constraints

Mexico committed to deliver at least 350,000 acre-feet annually to the U.S. under the 1944 treaty after tariff threats, highlighting climate-driven water stress. Manufacturers and agribusiness in northern basins face rising operational risk, potential rationing and stakeholder conflict over allocations.

Oil export concentration to China

Iran’s crude exports remain resilient but highly concentrated: about 46.9 million barrels in January 2026 (~1.51 mb/d), with China absorbing most volumes via relabeling and ship‑to‑ship transfers (often through Malaysia). Any enforcement shift could rapidly reprice Asian feedstocks and freight.

Canada–China trade recalibration

Ottawa is cautiously deepening China ties via sectoral deals, including canola concessions and limited EV access, to diversify exports. This invites U.S. political backlash and potential tariff escalation, complicating market-entry, compliance, and reputational risk management for multinationals.