South China Sea Tensions Persist

Vietnam’s expanded reclamation and infrastructure building in the Spratlys, alongside recurring disputes with China over fishing bans and maritime claims, keep geopolitical risk elevated. While not an immediate trade shock, tensions could affect shipping sentiment, offshore energy activity and political risk assessments.

China Derisking Faces Retaliation

U.S. firms reducing China exposure face growing counterpressure as Beijing adopts rules punishing supply-chain shifts and compliance with U.S. sanctions. This complicates derisking in pharmaceuticals, critical minerals and industrial inputs, raising legal, operational and market-access risk for multinationals.

Suez Revenue Shock Persists

Red Sea insecurity continues to divert vessels from the canal, cutting Egypt’s foreign-exchange earnings and complicating supply planning. Recent reporting cites roughly $10 billion in lost Suez revenues, while rerouting adds 10–15 days and materially raises freight and insurance costs.

Export Competitiveness via Tax Cuts

Proposed corporate tax reductions to 9% for manufacturing exporters and 14% for other exporters aim to strengthen Turkey’s industrial base and foreign-currency earnings. Export-oriented manufacturers may gain margin support, encouraging capacity expansion, supplier localization and regional hub strategies.

Export Strength Masks Demand Weakness

April manufacturing PMI held at 50.3 and export orders returned to expansion at 50.3, but non-manufacturing PMI fell to 49.4, a 40-month low. This divergence supports exporters while weakening consumer-facing sectors, services investment, pricing power, and broader domestic-demand assumptions.

Critical Minerals Supply Vulnerability

China’s rare-earth and yttrium leverage remains a major U.S. supply-chain weakness, with earlier controls causing shortages in auto production within weeks. U.S. efforts to diversify sourcing and reduce dependence will shape investment in mining, processing, aerospace and advanced manufacturing.

Black Sea Corridor Resilient

Despite persistent attacks, the maritime corridor remains central to trade. Since September 2023 it has moved more than 190 million tonnes, including 110 million tonnes of grain, while Q1 container throughput rose 43% year on year, supporting export continuity.

Shadow Fleet Trade Rewiring

Russia continues relying on a shadow tanker fleet now estimated at roughly 600-800 vessels to bypass price-cap restrictions and preserve hydrocarbon exports. This sustains trade flows but raises shipping, insurance, sanctions-enforcement and environmental risks for firms exposed to opaque maritime networks.

Fiscal Resilience Masks Slowdown

Canada’s 2025/26 deficit improved to C$66.9 billion from a C$78.3 billion forecast, but growth was trimmed to 1.1% for 2026. Tariffs are expected to keep output about 1.6% below its pre-tariff path by 2029, weighing on investment decisions.

Nearshoring Advantage Faces Bottlenecks

Mexico remains central to North American nearshoring, with bilateral U.S.-Mexico trade exceeding $839 billion in 2024 and Mexico’s U.S. import share rising to 15.6%. Yet investment momentum is being constrained by policy uncertainty, delayed decisions and operational bottlenecks in infrastructure, energy and permitting.

Digital and Data Regulation

Brazil’s tightening scrutiny of digital markets, platform governance and personal-data use is raising compliance risk. Ongoing debates around content moderation, competition rules and LGPD enforcement affect fintechs, e-commerce, AI services and multinationals handling Brazilian consumer and employee data.

Won Weakness Inflation Pressure

The won has repeatedly crossed 1,500 per dollar as oil shocks, capital outflows and the US-Korea rate gap unsettle markets. Import prices jumped 16.1% in March, increasing hedging costs, squeezing margins and complicating pricing, treasury and investment decisions.

Security and cargo risks

Organized crime, extortion, cargo theft, and corruption continue raising operating costs across industrial corridors. Business groups warn insecurity and weak rule enforcement are delaying projects, increasing insurance and logistics expenses, and undermining confidence in regional supply-chain resilience.

Energy infrastructure vulnerability

Offshore gas facilities are strategically vital but exposed to conflict risk. Temporary shutdowns at Leviathan and Karish reportedly caused about NIS 1.5 billion in economic damage in four weeks, lifted electricity costs 22%, and disrupted gas exports to Egypt and Jordan.

Skills Shortages in Strategic Industries

France’s industrial strategy is constrained by shortages in maintenance technicians, electrical engineering, and other technical roles. This talent gap threatens factory ramp-ups, energy-transition projects, and advanced manufacturing timelines, increasing labor costs and complicating location decisions for foreign investors.

Fiscal Stabilisation and Ratings Momentum

Fiscal metrics are improving, supporting investor sentiment and potential rating upgrades. Moody’s says debt likely peaked at 86.8% of GDP in 2025, with deficits narrowing, but interest costs still absorb 18.8% of revenue, constraining public investment and shock absorption.

Growth Outlook Downgraded Again

Thailand’s finance ministry cut its 2026 growth forecast to 1.6%, while inflation was raised to 3.0% and tourism expectations lowered to 33.5 million arrivals. Softer domestic growth and external shocks may weigh on consumption, hiring, and project demand.

Hormuz Disruption and Shipping Risk

Strait of Hormuz disruption is the dominant trade risk: roughly 20% of global seaborne crude and LNG normally transits it, while Iran depends on the route for over 90% of trade. Shipping, insurance, routing, and compliance costs have surged.

CUSMA Review Uncertainty Builds

The July CUSMA review is becoming a major business risk as Washington seeks concessions on dairy, digital taxes, procurement, and rules of origin. Even without withdrawal, prolonged annual reviews could freeze cross-border investment and complicate North American supply-chain planning.

Digital Trade Regulatory Friction

India-US negotiations explicitly cover digital trade, underscoring persistent uncertainty around data governance, platform regulation, and cross-border digital market access. Multinationals in technology, e-commerce, and services should expect continued compliance adaptation as India balances openness with strategic regulation.

Gargalos logísticos do agronegócio

A infraestrutura segue aquém do crescimento agrícola. Levar soja de Sinop a Santos custou US$ 88,90 por tonelada em 2025, contra US$ 37 até a China. Rodovias precárias, baixa armazenagem e dependência de caminhões elevam custos, perdas e volatilidade exportadora.

US Trade Deal Uncertainty

Taiwan is trying to preserve preferential U.S. tariff treatment under its reciprocal trade framework while responding to Section 301 probes on overcapacity and forced labor, leaving exporters exposed to tariff volatility, compliance costs, and delayed investment decisions.

Fuel Security Vulnerabilities Exposed

Middle East disruption and Strait of Hormuz risk have highlighted Australia’s dependence on imported crude and refined fuels despite its energy-exporter status. Government moves to build a one-billion-litre fuel stockpile and secure Asian supply arrangements will affect logistics, inventory strategy and transport-sensitive operations.

India-US Trade Deal Uncertainty

Ongoing India-US trade negotiations remain commercially significant, but shifting US tariff authorities and Section 301 scrutiny create uncertainty for exporters. With India’s 2025 goods exports to the US at $103.85 billion, tariff outcomes could materially affect market access, sourcing and pricing.

Accelerated Technology Localization Push

China is deepening domestic substitution across semiconductors, AI infrastructure, and cybersecurity. Measures include requiring chipmakers to use at least 50% domestically made equipment for new capacity and replacing foreign AI chips in state-funded data centers, shrinking market access for foreign technology suppliers.

Water Infrastructure Investment Gap

Water insecurity is becoming a material business risk as aging systems, municipal failures, and project delays disrupt supply. More than 40% of treated water is reportedly lost, while stalled urban projects and new IFC-backed financing efforts highlight both vulnerability and investment opportunity.

Tourism and Services Expansion

Tourism is becoming a major demand engine, with 123 million visitors in 2025 and ambitions to reach 150 million by 2030. Rising pilgrim and leisure flows boost hospitality, transport, retail and aviation, creating opportunities but also capacity and service-delivery pressures.

Tourism And Aviation Weakness

Foreign arrivals fell 3.45% year on year to just under 12 million in the first four months, while revenue slipped 3.28%. Higher airfares, limited seat capacity, and conflict-related disruptions weaken services demand and spill into retail, transport, and hospitality operations.

EU Integration Reshapes Trade

Ukraine is moving toward phased EU market integration rather than rapid accession, with potential gains in single-market access, standards recognition, and industrial participation. Progress on ACAA and sectoral alignment could ease cross-border trade, but timing remains tied to difficult reforms and member-state politics.

Municipal Failures Raise Operating Costs

Water, sanitation, electricity, and waste-service breakdowns are increasingly material business risks. Government is mobilising large support packages, including R54 billion for local infrastructure and R55.3 billion in municipal Eskom debt relief, yet weak execution still disrupts urban operations and site selection.

Energy Costs Undermine Competitiveness

Higher gas and electricity prices are feeding through production, logistics, retail, and food supply chains. Business groups say non-commodity charges now account for 57% to 65% of electricity bills, worsening inflation pressure and eroding UK manufacturing competitiveness.

Fiscal Slippage and Debt

Brazil’s fiscal outlook has deteriorated as March posted a R$199.6 billion nominal deficit, gross debt rose to 80.1% of GDP, and election-year spending pressures grew. Higher sovereign risk can lift funding costs, weaken policy credibility, and delay investment decisions.

Tax Reform Implementation Uncertainty

The ongoing rollout of Brazil’s consumption tax reform remains a major operational issue for multinationals, with implications for pricing, invoicing, compliance systems and supply-chain design. Transition complexity could generate temporary legal uncertainty, uneven sectoral burdens and adaptation costs.

Export Surge and Demand Concentration

Trade performance remains exceptionally strong, but increasingly concentrated in AI-related electronics. Electronic components and ICT products account for 78.5% of exports, while Q1 shipments jumped 51.12%, heightening exposure to cyclical tech demand, trade-policy shifts, and customer concentration in overseas markets.

Export-Led Growth, Weak Demand

April manufacturing PMI stayed expansionary at 50.3 and private PMI reached 52.2, helped by stronger export orders and inventory building. Yet domestic demand remains soft, non-manufacturing slipped to 49.4, and margin pressure may intensify competition, discounting and payment-risk exposure inside China.

Cross-Strait Conflict and Blockade Risk

Rising China-related military, blockade, and gray-zone risks threaten shipping, insurance, exports, and investor confidence. Analysts warn a disruption to Taiwan chip exports could cut domestic GDP by 12.5%, while severely affecting electronics, automotive, cloud, and industrial supply chains globally.