US tariff uncertainty and exports

Thailand’s 2025 exports rose 12.9% (Dec +16.8%), but 2026 momentum may slow amid US tariff uncertainty (reported 19% rate) and scrutiny of transshipment via Thailand. Firms should stress-test pricing, origin compliance, and buyer commitments.

Sanctions and Export Controls Expand

The US has broadened its use of sanctions and export controls, targeting countries like China, Russia, and Venezuela. These measures affect technology transfers, energy trade, and financial transactions, requiring businesses to enhance compliance and monitor regulatory developments closely.

Geopolitical Realignment and Western Coordination

The Ukraine crisis is accelerating Europe’s push for strategic autonomy and closer EU-US cooperation. Ongoing trilateral talks (Ukraine, US, Russia) and evolving security architectures are influencing investment climates, regulatory frameworks, and the broader geopolitical risk environment for business.

Sanctions compliance incentives harden

OFSI now states penalties can be reduced up to 30% for self-reporting and cooperation. For online investing firms with cross-border clients, stronger screening, escalation and audit trails become strategic necessities as UK sanctions enforcement intensity rises.

EV supply-chain localization rules

Proposed “100% US-made” requirements for federally funded EV chargers would effectively stall parts of the build-out, given reliance on imported power modules and electronics. This raises uncertainty for EV infrastructure investors, equipment suppliers, and downstream fleet electrification plans.

Foreign real estate ownership liberalization

New rules enabling foreign ownership of land (with limits in Makkah/Madinah) are lifting international demand for Saudi property and mixed-use developments. This improves investment entry options and collateralization, but requires careful title, zoning, and regulatory due diligence.

Fiscal Policy and Debt Volatility

Japan's snap election and expansionary fiscal policies have triggered sharp volatility in government bonds and the yen, raising global market risks. Debt servicing costs could rise to 20-25% of expenditure, impacting fiscal sustainability and investor confidence.

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.

Regulatory Overhaul and Compliance

Significant regulatory changes are underway in the UK, including updates to employment law, financial regulations, and business compliance regimes. Companies must adapt quickly to avoid penalties and ensure operational continuity.

China trade ties and coercion

China remains Australia’s dominant trading partner, but flashpoints—such as Beijing’s warnings over the Chinese-held Darwin Port lease and prior export controls on inputs like gallium—keep coercion risk elevated, complicating contract certainty, market access, and contingency planning for exporters and import-dependent firms.

Semiconductor Supply Chain Dominance

Taiwan remains the global leader in advanced semiconductor manufacturing, with TSMC and related firms central to AI, electronics, and automotive supply chains. Recent US-Taiwan deals reinforce this role, but also expose the sector to geopolitical pressures and relocation risks.

Digitalization and Regulatory Streamlining Initiatives

The launch of an electronic licensing platform offering 460 services from 41 government entities marks a major step in improving Egypt’s business environment. Faster, more transparent licensing supports ease of doing business and facilitates foreign investment and business expansion.

Energy strategy pivots nuclear-led

The new 10‑year energy plan (PPE3) prioritizes nuclear with six EPR2 reactors (first by 2038) and aims existing fleet output around 380–420 TWh by 2030–2035. Lower wind/solar targets add policy risk for power‑purchase strategies and electrification investments.

Foreign Direct Investment Decline

UK foreign direct investment projects fell by 13% in 2024, reflecting investor caution amid regulatory uncertainty and economic headwinds. This trend affects capital inflows, job creation, and the UK's attractiveness as a business destination.

Capital Controls Tighten Amid Fiscal Strain

New regulations require declarations for cash exports over $100,000 and restrict gold bar movements. These controls aim to curb capital flight, increase transparency, and stabilize the ruble, but may deter foreign investment and complicate international financial operations in Russia.

Geopolitical Fragmentation and Business Uncertainty

US interventions abroad and retreat from multilateralism have contributed to a fragmented geoeconomic landscape. National security concerns, sanctions, and unpredictable policy shifts increase operational risks for international businesses, requiring adaptive strategies and robust risk management frameworks.

Currency Watchlist and Baht Volatility

The US Treasury has placed Thailand on its currency monitoring list due to trade and current account surpluses. The Bank of Thailand is tightening gold trading rules to curb speculative capital flows, which may impact exchange rates, compliance costs, and cross-border financial operations.

FX strength and monetary easing

A strong shekel, large reserves (over $220bn cited), and gradual rate cuts support financial stability but squeeze exporters’ margins and pricing. Importers benefit from currency strength, while hedging strategies become critical amid geopolitical headline-driven volatility.

Critical minerals export leverage

Beijing’s dominance—about 70% of rare-earth mining and ~90% processing—keeps global manufacturers exposed to licensing delays or sudden controls. Western allies are organizing price floors and stockpiles to de-risk, raising sourcing costs and compliance burdens for China-linked inputs.

Tighter inbound investment screening

CFIUS scrutiny is broadening beyond defense into data-rich and “infrastructure-like” assets, raising execution risk for cross-border M&A and minority stakes. Investors should expect longer timelines, mitigation demands, and valuation discounts for sensitive data, education, and tech targets.

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.

High-risk Black Sea shipping

Merchant shipping faces drone attacks, sea mines, GNSS jamming/spoofing, and sudden port stoppages under ISPS Level 3. Operational disruption and claims exposure rise for hull, cargo, delay, and crew welfare, complicating charterparty clauses, safe-port warranties, and routing decisions.

UK-EU supply chain re-fragmentation

EU ‘Made in Europe’ industrial rules risk excluding UK firms from subsidised value chains, potentially raising costs and disrupting integrated automotive, advanced-tech and green-energy supply chains spanning Britain and the continent, complicating investment planning and post‑Brexit trade resets.

Expanded secondary sanctions via tariffs

Washington is blending sanctions and trade tools, including a proposed blanket 25% tariff on imports from any country trading with Iran. This “long-arm” approach raises compliance costs, forces enhanced supply-chain due diligence, and increases retaliation and WTO-dispute risk for multinationals.

Semiconductor tariffs and carve-outs

The U.S. is imposing 25% tariffs on certain advanced semiconductors while considering exemptions for hyperscalers building AI data centers, linked to TSMC’s $165bn Arizona investment. This creates uneven cost structures, reshapes chip sourcing, and influences investment-location decisions.

Technology Decoupling and Domestic Substitution

US-led export controls on semiconductors and AI technology have prompted China to restrict foreign tech imports and accelerate domestic innovation. Chinese firms are increasingly substituting domestic components, impacting global technology supply chains and market access for foreign firms.

Post-war security risk premium

Ceasefire conditions remain fragile and multi-front escalation risk persists (Gaza governance transition, northern border tensions, Yemen/Houthi threats). The resulting security risk premium affects insurance, travel, site selection, and contingency planning for multinationals operating in Israel.

Data sovereignty and EU compliance

Finland’s role as a ‘safe harbor’ for sensitive European workloads, including large cloud investments, strengthens trust for enterprise XR data and simulation IP. International firms still need robust GDPR, security auditing, and third-country vendor risk management in procurement and hosting decisions.

Geopolitical Risks and Regulatory Tensions

US-South Korea trade frictions are compounded by regulatory disputes, such as perceived discrimination against US tech firms operating in Korea. These tensions risk retaliatory measures, complicate compliance for multinationals, and may spill over into other sectors, including digital services.

Record Trade Surplus Fuels Expansion

China’s 2025 trade surplus hit $1.2 trillion, driven by export growth to Africa, ASEAN, Latin America, and the EU, offsetting US declines. This export reliance boosts global influence but risks long-term structural imbalances and protectionist backlash.

Energy investment and nuclear cooperation linkage

US pushes Korea’s first $350bn investment projects toward energy, while trade tensions spill into talks on civil uranium enrichment, spent-fuel reprocessing, and nuclear-powered submarines. Outcomes affect Korea’s energy-security roadmap, industrial projects, and cross-border financing and permitting timelines.

Saudi Aramco’s Global Investment Drive

Aramco continues to secure international partnerships and invest in energy diversification, influencing global supply chains and capital flows. Its strategic moves, including stake acquisitions and cross-border ventures, impact energy markets and related industries worldwide.

EU Customs Union Modernization Stalemate

Turkey’s business community is pressing for the modernization of the EU-Turkey Customs Union, which is critical for trade and value chains. Delays and lack of progress risk Turkey’s competitiveness, especially as new EU FTAs and green regulations reshape market access and supply chains.

Critical minerals de-risking drive

Budget measures and diplomacy intensify to reduce reliance on China, including rare earth corridors across coastal states and customs-duty relief for processing equipment. India is also negotiating critical-minerals partnerships with Brazil, Canada, France and the Netherlands, reshaping sourcing strategies.

Post-election policy continuity risks

Bhumjaithai’s strong election showing reduces near-term instability, supporting portfolio inflows, but coalition bargaining and a multi-year constitutional rewrite could still delay budgets and reforms. Foreign investors face execution risk around stimulus, infrastructure procurement, and regulatory priorities.

Housing constraints and construction bottlenecks

Housing supply remains below the ~240,000 annual starts needed for the 1.2m homes target, with commencements around ~184,460 in the year to Sep-2025. Planning delays, workforce shortages, and compliance costs slow projects, impacting labour availability, facility location decisions and operating costs in major cities.