Labor Shortages in Key Sectors

Stricter immigration enforcement is contributing to labor shortages in construction and other migrant-dependent industries, with evidence of slower output rather than wage substitution. Businesses face project delays, higher delivery risk, and tighter operating margins, especially where domestic labor pipelines remain structurally insufficient.

Gas Sector Investment Rebound

New gas discoveries and reduced arrears to foreign energy partners—from $6.1 billion to $440 million—are improving investor sentiment. However, production gains will take time, so near-term exposure to import reliance and summer supply stress remains significant.

Gas and Power Infrastructure Expansion

Ankara plans to raise LNG regasification capacity from 161 million to 200 million cubic meters daily and invest about $30 billion in transmission upgrades over the next decade, strengthening power reliability, cross-border electricity trade, and location attractiveness for energy-intensive manufacturing.

Labor and Compliance Tighten

Enforcement of residency and labor rules remains active, with 8,943 violations recorded and 9,832 deportations in one week. Combined with scrutiny of migrant labor conditions and governance lapses, this raises compliance, contractor oversight, reputational, and workforce continuity risks.

Political Nationalism Policy Volatility

Prime Minister Anutin’s sovereignty-focused mandate has increased nationalist pressure around Cambodia, border closures and maritime policy. For investors, this raises the risk of abrupt policy shifts, diplomatic friction and reputational sensitivity, even as Thailand simultaneously promotes itself as a stable investment hub.

US-Korea Nuclear Industrial Deal

New Seoul-Washington talks on uranium enrichment, spent fuel reprocessing, nuclear-powered submarines and shipbuilding could reshape industrial policy. If advanced, they would deepen strategic manufacturing opportunities, but also increase regulatory complexity, alliance dependence, and scrutiny of technology transfer and compliance.

Rupiah Weakness and Tighter Rates

The rupiah has traded near Rp17,700 per US dollar, prompting Bank Indonesia to raise rates 50 basis points to 5.25%. Higher funding costs, FX volatility and a wider current-account deficit increase hedging needs and pressure importers, leveraged firms and investment planning.

Monetary Tightening and Yen Volatility

The Bank of Japan is signaling a possible June rate hike after a 6-3 April vote and sharply higher inflation forecasts, while Japan reportedly spent about ¥10 trillion supporting the yen. Higher funding costs and exchange-rate volatility will affect trade pricing, hedging, and imported input costs.

War Damage And Ceasefire Fragility

The ceasefire with the United States and Israel remains unstable, with mediation interruptions, linked Hezbollah tensions, and fresh strikes keeping escalation risk elevated. Businesses face persistent uncertainty around asset damage, operational continuity, reconstruction timelines, and abrupt policy or security reversals.

CUSMA Renegotiation and US Tariffs

Canada faces its most consequential external risk from CUSMA review and persistent U.S. tariffs on steel, aluminum, autos and some downstream products. Nearly 70% of exports go to the U.S., so prolonged uncertainty threatens investment planning, integrated supply chains and export pricing.

Critical Minerals And Trusted Supply

India and the United States have advanced critical-minerals cooperation as both seek alternatives to China-linked supply dependence. This supports investment in advanced manufacturing, semiconductors, batteries and strategic materials, and strengthens India’s appeal as a partner in trusted supply chains for sensitive industries.

Rare Earth Supply Vulnerability

Chinese rare-earth and component controls continue to expose US manufacturing dependence in autos, electronics, aerospace and drones. Reports show some heavy rare-earth exports still about 50% below prior levels, raising procurement risk, inventory costs and urgency around supplier diversification.

Defence Spending Expansion Drive

The government is preparing a major defence spending increase, potentially around £18 billion, after committing to 2.5% of GDP from 2027. This should support aerospace, defence manufacturing and dual-use technologies, while also reshaping procurement priorities and fiscal trade-offs.

Sanctions Fragment Trade Finance

Western sanctions, frozen assets and bank disconnections continue to impair payments, financing and compliance. Russia says trade with China now exceeds $200 billion and is increasingly settled in rubles and yuan, accelerating non-dollar channels but raising counterparty, currency and sanctions risks for foreign firms.

Tax Changes Reshape Capital Flows

Planned replacement of the 50% capital gains discount with indexation from July 2027, alongside tighter negative gearing and a 30% minimum trust tax, could alter property and venture allocations, affecting foreign investors, funds and project financing structures.

Sanctions Evasion Compliance Exposure

Turkey remains a prominent transit jurisdiction in Russia- and Iran-related sanctions cases, increasing compliance scrutiny for banks, shippers and industrial traders. Firms face elevated dual-use, beneficial-ownership and payments risk, especially where intermediaries obscure Russian or Iranian end-users.

CUSMA Review and Tariffs

Canada faces major uncertainty ahead of the July 1 CUSMA review as Washington keeps tariffs on steel, aluminum, autos and forestry. With roughly $1.3 trillion in annual North American trade covered, prolonged negotiations could disrupt investment planning and cross-border supply chains.

Agricultural protectionism and input stress

Emergency farm legislation and union pressure reflect severe strain from fuel, energy and regulatory costs, weak farm incomes and import competition. Proposed restrictions on products made with banned pesticides signal rising trade frictions and volatility for food supply chains, sourcing and compliance.

Supply Chain Resilience Imperative

Recent energy shocks, mineral restrictions, and market volatility reinforce the need for redundancy in Japan-linked supply chains. Firms should expect higher emphasis on inventory buffers, dual sourcing, contract security, and infrastructure resilience as Japan balances efficiency against a less predictable regional environment.

Port Expansion Reshapes Capacity Outlook

Durban and Cape Town upgrades, including Durban’s proposed 1.8 million-TEU terminal expansion and Cape Town efficiency projects, could materially strengthen future trade capacity. Yet construction timelines, procurement risks and interim congestion mean supply-chain resilience plans remain essential.

Coalition Reform Uncertainty Persists

The Merz coalition remains divided on taxes, pensions, labor rules, and business reforms, delaying clearer policy signals. With growth forecast cut to 0.5%, weak polls, and repeated disputes, companies face uncertainty over regulation, labor costs, incentives, and implementation timelines.

Weak Demand and Property Drag

China’s domestic economy is losing momentum: April industrial output rose just 4.1% year on year, retail sales 0.2%, auto sales fell 21.6%, and fixed-asset investment declined 1.6%. Weak consumption and the prolonged property slump are undermining revenue assumptions across consumer and industrial sectors.

Regional Supply Chain Integration

Thailand is deepening economic links with Vietnam under an upgraded strategic partnership, targeting bilateral trade of US$25 billion from about US$22.1 billion in 2025. Stronger logistics, aviation, digital, and green-industry ties could reinforce mainland ASEAN supply-chain resilience.

China Regains Export Importance

China has reemerged as Korea’s largest export market, supported by surging semiconductor shipments and stronger first-quarter growth than exports to the United States. Businesses must manage renewed China exposure alongside geopolitical, compliance, and concentration risks in regional supply chains.

Tourism Policy and Mobility Reset

Thailand is rolling back its 60-day visa-free regime, reverting many visitors to 30-day access after authorities linked longer stays to crime, scams, and illegal business activity. The move tightens compliance risks for travel-linked sectors while potentially dampening tourism recovery momentum.

CPEC 2.0 Investment Push

Pakistan and China have agreed to advance CPEC 2.0, expand Gwadar’s role, realign the Karakoram Highway and invite third-party participation. The push may create openings in logistics, energy, mining and manufacturing, but execution still depends on security and payment reliability.

US-Brazil trade rebalancing pressures

Brazilian exports to the United States fell 16.7% year-on-year to US$10.9 billion in the first four months, while the bilateral deficit widened to US$1.3 billion. Industrial sectors including machinery, steel, wood products, and fuels remain especially exposed to shifting tariff conditions.

Indo-Pacific Infrastructure and Energy Security

Australia’s deeper Quad role in maritime resilience, Fiji port development and energy security highlights growing focus on vulnerable shipping lanes and fuel dependence, increasing strategic importance for ports, logistics, commodities exporters and firms reliant on stable Indo-Pacific trade corridors.

Alberta Political Cohesion Risk

Alberta separatist pressures have eased temporarily after court intervention, but federal-provincial tensions still shape energy and regulatory policy. For international business, renewed constitutional friction could complicate approvals, infrastructure planning, labor mobility, and perceptions of long-term policy stability within Canada.

Export Earnings Liquidity Restrictions

Planned natural-resource export earnings rules would require firms to retain 50% of proceeds domestically for one year from June. Exporters warn this could tighten working capital, reduce financial flexibility, and complicate treasury management for commodity producers and cross-border supply chains.

Textile Export Competitiveness Erosion

Pakistan’s largest export sector says effective tax burdens have risen to 68.27%, while delayed refunds block 35-40% of working capital and energy costs remain uncompetitive. This threatens export volumes, supplier solvency, and sourcing reliability for international buyers reliant on Pakistan’s textile value chain.

Defense supply chains being rebuilt

A state comptroller report found Israel entered the war with weakened domestic weapons production, stockpile gaps and dependence on foreign inputs. Authorities are now pursuing multibillion-shekel local manufacturing expansion, creating opportunities but also crowding industrial capacity and procurement channels.

EU-Linked Reforms Reshape Market

Access to European financing is tied to tax, customs, anti-corruption and rule-of-law reforms. Ukraine has completed 86 Ukraine Plan steps and is implementing 65 more, creating a more transparent business environment but also raising short-term compliance, taxation and legislative adjustment costs.

India-US Trade Pact Nears

New Delhi and Washington are in the final stage of an interim trade deal, with talks on tariffs, market access, customs, non-tariff barriers and investment promotion. A near-term agreement could materially reshape sourcing economics, export access and investor confidence.

Deforestation Rules Reshape Exports

Although Brazil’s 2025 deforestation fell 20.6% and dropped below 1 million hectares, compliance pressure is intensifying. EU anti-deforestation rules may affect nearly 264,000 properties, while US scrutiny links environmental enforcement directly to trade penalties, raising traceability and sourcing costs for exporters.

US Trade Relations Friction

Strained ties with Washington are clouding tariffs, AGOA access and investor sentiment. South Africa is trying to reset relations as US pressure focuses on BEE, expropriation policy and foreign-policy alignment, raising uncertainty for exporters, automakers and cross-border investors.