Automotive Market Rules Are Shifting

Australia will liberalise access for EU passenger vehicles and raise the luxury car tax threshold for EU electric vehicles to A$120,000, exempting about 75% of them and increasing competitive pressure across auto retail, fleet procurement and charging-related supply chains.

Import Cost Pass-Through Pressures

Recent studies estimate 80% to 100% of US tariff costs were passed through into import prices, with collections reaching $264 billion to $287 billion in 2025. Importers absorb most of the burden, pressuring margins, consumer prices and capital spending.

Regulatory Scrutiny on Foreigners

Authorities are intensifying enforcement against nominee shareholding, foreign property structures and misuse of visa-free entry, backed by AI-based reviews. This improves legal transparency but raises compliance risk, due diligence costs and operational uncertainty for foreign firms using informal ownership or staffing arrangements.

IMF Anchors Macroeconomic Stability

Pakistan’s IMF staff-level deal would unlock $1.2 billion, taking programme disbursements to about $4.5 billion. Fiscal consolidation, tighter monetary policy, exchange-rate flexibility and tax reforms remain central, shaping import financing, investor confidence, sovereign risk pricing and corporate planning.

China-Centric Energy Dependence Deepens

China reportedly absorbs more than 90% of Iran’s oil exports, mainly via Shandong teapot refiners and yuan-linked payment channels. This deepens Iran’s dependence on Chinese demand while exposing counterparties to secondary sanctions, opaque pricing, and greater geopolitical concentration risk.

AUKUS Industrial Uncertainty Persists

Australia’s AUKUS submarine program is driving defence infrastructure and industrial spending, especially in Western Australia, but delivery risks remain contested. For business, this means opportunities in defence supply chains alongside uncertainty over timelines, workforce constraints, and long-term procurement planning.

Inflation and Tight Monetary Policy

Annual inflation stood at 31.5% in February, with 12-month household expectations at 49.89%. The central bank has paused easing, kept the policy rate at 37%, and lifted overnight funding near 40%, raising borrowing costs and squeezing domestic demand.

Petrochemical Supply Chains Tighten

War disruption around Hormuz is constraining naphtha, polymers, methanol, and other petrochemical flows, with polyethylene and polypropylene prices reaching multi-year highs. Manufacturers in Asia and Europe face margin pressure, while shortages, feedstock volatility, and rerouting costs disrupt downstream industrial production.

Data Center Boom Faces Resistance

France is attracting massive digital infrastructure investment, including €109 billion in planned AI-related spending and nearly €60 billion in 2025 data-center projects. Yet municipal opposition over power, water, land and noise could delay permits, construction schedules and grid access.

Cross-Strait Conflict Operational Risk

Persistent tensions with Beijing continue to shape shipping, insurance, investment planning, and contingency costs. Taiwan’s strategic centrality in advanced semiconductors means any military escalation, blockade, or gray-zone coercion could rapidly disrupt global electronics, logistics, and customer delivery schedules.

Foreign Capital Outflows Accelerate

Foreign investors have sharply reduced exposure to Turkish assets, including more than $4.6 billion of government-bond sales and over $1 billion in equity outflows during recent turbulence. This weakens market liquidity, raises borrowing costs, and complicates refinancing for Turkish corporates and banks.

Policy Uncertainty Around Elections

Trade and industrial measures are increasingly shaped by domestic political calculations ahead of the 2026 midterms. Frequent revisions, exemptions and partner-specific deals reduce predictability, making long-term investment decisions, supplier commitments and US market strategies materially harder to calibrate.

High interest and inflation

The Selic was cut only marginally to 14.75%, while 2026 inflation expectations rose to 4.31% amid oil-price shocks. Elevated real rates support the currency but restrain credit, dampen domestic demand, and increase capital costs for expansion, procurement, and working capital.

Supply Chain Cost Pressures

March PMI data showed UK business growth slowing to 51.0 from 53.7, while manufacturers’ input-cost pressures rose at the fastest pace since 1992. Fuel, freight, and energy-intensive materials are driving renewed supply-chain stress, forcing inventory, logistics, and procurement adjustments across sectors.

Business Costs and Industrial Slowdown

March composite PMI fell to 51.0, a six-month low, while manufacturers’ input costs rose at the fastest pace since 1992. Fuel, transport and energy-driven cost inflation is eroding profitability, depressing hiring, and increasing pass-through pressure across supply chains.

Mining Exploration Needs Policy Certainty

South Africa captured only 1% of global exploration spending in 2023, highlighting weak project pipelines despite strong mineral endowments. Investors are watching mining-law changes, cadastral delays and tenure security, all of which shape long-horizon decisions on extraction and downstream beneficiation.

AI Export Boom Accelerates

Taiwan’s trade performance is being lifted by AI and high-performance computing demand, with exports reaching roughly US$640 billion and 2.4% of global exports. Strong chip and server demand supports investment and capacity expansion, but also increases concentration and cyclical exposure.

Great-power minerals competition

Indonesia is increasingly central to US-China competition over critical minerals, especially nickel. Chinese firms still dominate many smelters and industrial parks, while Washington is seeking market access and investment rights, forcing multinationals to manage geopolitical exposure, partner risk and compliance more carefully.

Energy Shock Hits Growth

Rising oil prices and Gulf conflict spillovers have cut Thailand’s 2026 GDP forecast to 1.2%-1.6%, lifted inflation expectations to 2.0%-3.0%, and disrupted fuel logistics, raising transport, production, and procurement costs across export-oriented supply chains.

Energy Windfall Masks Fragility

Higher oil and commodity prices have temporarily lifted Russia’s export earnings and fiscal revenues, with Urals near or above Brent and some estimates showing billions in extra monthly receipts. But the gain remains volatile, politically contingent, and vulnerable to demand destruction.

Export Strength, Margin Pressure

Exports rose 9.9% year-on-year in February to US$29.43 billion, with US shipments up 40.5%, but imports surged 31.8%, creating a US$2.83 billion deficit. Strong electronics demand is offset by freight costs, energy volatility and baht pressure squeezing exporter margins.

PIF Partnership Model Shift

The Public Investment Fund is moving from predominantly self-funded deployment toward crowding in international and domestic partners. A new five-year strategy targets infrastructure, renewables, pharmaceuticals, real estate and data centers, creating opportunities but also reshaping deal structures and capital access.

Financial System Fragmentation Deepens

Banking disruptions, cyberattacks, sanctions isolation, and dollarization pressures are weakening Iran’s financial system as a reliable commercial channel. Limited formal settlement options increasingly push trade into exchange houses, informal intermediaries, and non-dollar structures, complicating receivables, treasury management, and auditability.

War-Driven Operational Security Risks

Long-range Ukrainian drone attacks now reach major Russian industrial and logistics hubs, including ports, refineries and inland facilities. The expanding strike envelope increases physical risk to assets, warehousing, transport nodes and employees, raising business continuity, contingency planning and infrastructure resilience requirements.

Tariff Regime Volatility Persists

US trade policy remains highly unpredictable after the Supreme Court voided key emergency tariffs, leaving a temporary 10% blanket duty and ongoing Section 301 and 232 actions. The uncertainty complicates pricing, sourcing, contract terms, capital allocation, and market-entry planning for exporters and investors.

Semiconductor Controls Tighten Further

Taiwan’s pivotal chip role is drawing tighter export-control alignment with the United States after the February trade pact and a US$2.5 billion smuggling case. Firms face higher compliance, due-diligence, and enforcement risk, especially on China-linked transactions and re-exports.

Energy Shock Threatens Logistics

Conflict-linked oil price increases and Strait of Hormuz disruption risks are lifting freight, fuel, and insurance costs. Even with US ports operating normally, globally integrated supply chains remain exposed, particularly in shipping-intensive sectors where transport inflation can quickly erode margins and delay procurement decisions.

Stronger data enforcement cycle

Brazil’s ANPD is set to expand enforcement in 2026, with more than 200 new staff and a budget expected to exceed double 2025 levels. Multinationals should expect stricter inspections, sanctions and tighter rules around data governance and digital operations.

Tariffs Raise Domestic Cost Base

Recent studies indicate roughly 55-95% of tariff costs are passed through to US importers and consumers, lifting inflation by about 0.5 percentage points. Import-dependent sectors face margin pressure, while foreign suppliers must reassess pricing, inventory, and localization strategies for the US market.

Election Outcome and Policy Reset

April’s election could produce Hungary’s sharpest policy turn in 16 years. A Tisza victory would likely prioritise anti-corruption reforms, closer EU alignment and unlocking roughly €18-20 billion in frozen EU funds, materially affecting investment confidence, public procurement and market access.

Fiscal Discipline Under Market Scrutiny

Investor concern over Indonesia’s 3% budget-deficit ceiling intensified after officials floated temporary flexibility if oil stays high. Markets reacted with equity losses, higher bond yields, and negative rating outlook pressure, increasing sovereign risk premiums and uncertainty for long-term capital allocation.

Foreign Exchange Debt Pressures

Pakistan still faces heavy external repayments despite improved stabilization. Foreign-exchange reserves remain relatively thin against financing needs exceeding $25 billion, while a $1 billion Eurobond repayment underscores rollover dependence, sovereign risk sensitivity and persistent uncertainty for importers, lenders and foreign investors.

Labor Shortages Raise Operating Costs

Manufacturing hubs are facing acute worker shortages as electronics expansion intensifies competition for labor. Firms are increasing signing bonuses, recruitment benefits and wages, especially in northern industrial corridors and Ho Chi Minh City, raising operating costs and complicating production ramp-ups for global suppliers.

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.

US-Taiwan Trade Security Alignment

Taiwan’s February trade pact with the United States cuts tariffs on up to 99% of goods while binding tighter export-control, digital, and investment rules. Businesses face new compliance demands, sanctions alignment, and reduced scope for cross-strait commercial flexibility.

E-commerce Parcel Rules Tighten

France is intensifying checks on low-value e-commerce imports after introducing a €2 tax on small parcels, with an EU levy lifting charges to €5 from July. Retailers using Chinese cross-border fulfillment face higher compliance, border friction and cost pressure.