Sectoral Trade Disputes Expanding

Beyond headline tariffs, Mexico faces new sector-specific disputes including U.S. anti-dumping duties of 3.37% to 5.28% on Mexican strawberries, signaling a wider pattern of case-by-case trade frictions that can spill into regulatory and legal costs.

Alternative energy corridor experimentation

Russia’s proposal for an overland rail route to India via Central and South Asia highlights growing interest in bypassing maritime chokepoints and sanctions pressure. Although preliminary and unlikely to replace seaborne oil, it signals longer-term corridor diversification relevant to logistics and infrastructure investors.

Regional Conflict Spillover Exposure

Saudi Arabia faces simultaneous pressure from Houthis, Iraqi militias and wider Iran-linked regional escalation. This multi-front threat environment complicates commercial planning, heightens geopolitical risk premiums and may deter investment decisions tied to long-horizon industrial and logistics projects.

Investor Sentiment Tied Politics

Reuters-cited JPMorgan analysis says election outcomes will shape perceptions of Israel’s institutional environment, Western ties and judicial reforms. Even without major fiscal shifts, this political risk can influence foreign direct investment, portfolio flows and corporate expansion decisions.

Indo-Pacific defence ties expand

The UK and India advanced their Ten-Year Defence Industrial Roadmap, emphasizing joint R&D, co-development and maritime security cooperation. For international firms, this broadens partnership routes into Indo-Pacific programmes, but may also increase local-content expectations, technology-sharing sensitivities and competitive pressure in strategic sectors.

Strategic Commodity Exchange Emerges

The government plans to launch a Strategic Mineral and Commodity Exchange on 1 January 2027 under OJK oversight, covering exports such as nickel, coal and palm oil. This could reshape benchmark pricing, contract structures, trading transparency and hedging practices for global buyers.

Iran Sanctions Energy Exposure

U.S. pressure on countries trading with Iran is raising direct risks for Turkey, which sourced 7.7 bcm from Iran in 2025, about 13% of gas imports. Businesses face possible sanctions spillovers, higher energy costs, and winter supply-security uncertainty.

Defence FDI and Export Liberalisation

New Delhi is considering easing foreign investment rules in defence while also widening export approvals and OGEL coverage. With defence production at Rs 1.78 lakh crore and exports at Rs 38,424 crore in FY26, the sector is becoming a major opportunity.

US Transshipment Scrutiny Intensifies

Washington placed Indonesia in its Tier 2 transshipment-risk group, with estimates of related tariff evasion globally reaching US$40-303 billion. Tighter US AI-based customs enforcement could increase origin-compliance costs, shipment inspections, and reputational risks for Indonesia-linked exporters and manufacturers.

Trade deficit worsens cost pressures

Japan posted a July trade deficit of 634.5 billion yen as imports rose 27.8% and crude oil import values jumped 87.8% year on year to 1.41 trillion yen. Elevated energy bills are squeezing margins, weakening purchasing power and pressuring supply-chain-dependent industries.

US tariff dispute escalates

Thailand is negotiating after Washington imposed a 12.5% Section 301 tariff on most Thai goods, following Thailand’s US$51.4 billion 2025 trade surplus. The dispute raises export-cost, market-access, and pricing risks for manufacturers, agribusiness, and US-facing supply chains.

Asian energy dependence deepens

Russia’s energy revenues increasingly rely on Asian demand, with China and India dominating crude purchases and, in some cases, supplying refined products back to Russia, concentrating commercial risk and strengthening buyer leverage over pricing, discounts, freight and payment terms.

WTO route remains central

Brazil has framed the dispute as unilateral and discriminatory under WTO rules, and Washington accepted consultations. Although the appellate system remains impaired, the multilateral track still shapes timelines, negotiation leverage and corporate expectations around tariff duration and possible policy outcomes.

China link drives enforcement risk

China remains Iran’s dominant seaborne oil customer, taking more than 80% of shipped volumes according to Kpler data cited in reporting. That makes Chinese buyers, intermediaries, insurers and banks central to sanctions enforcement risk and possible wider trade friction.

Shadow fleet energy circumvention

Russian oil and LNG exports increasingly rely on shadow-fleet vessels, ship-to-ship transfers and transponder gaps to bypass restrictions. New EU measures added 41 vessels, while Arctic sanctioned cargoes continue reaching China, elevating enforcement and reputational exposure across maritime services.

EV and Auto Export Realignment

Thailand is pressing its shift from conventional auto manufacturing toward an EV hub, after 140,000 EV sales in 2025, nearly 25% of new vehicle sales. Parallel efforts to expand automotive exports to Australia signal supply-chain and investment realignment opportunities.

Alliance uncertainty affects operations

Trump’s order to reduce Ulchi Freedom Shield participation and debate over troop burdens are spilling into business risk perceptions. With roughly 28,500 US troops in Korea and reports of possible force adjustments, firms face added uncertainty around contingency planning and investor confidence.

Industrial relations negotiation risk

Labor confederations are pressing for repeal of three Omnibus Law implementing regulations and warning against rushed drafting, while lawmakers pledge tripartite talks with Apindo. This raises risks of strikes, compliance changes, and shifting employment costs across manufacturing and services.

US-EU Tariff Pressure Persists

Germany’s exporters still face material US market friction despite the Turnberry deal. Most EU imports remain capped at 15% tariffs, while steel, aluminium and some trucks face duties up to 50% and 25%, sustaining uncertainty for investment and pricing decisions.

Oil exports and China exposure

Iran’s oil trade remains heavily dependent on China, which bought more than 80% of shipped crude in 2025, though volumes have fallen sharply. Any tighter enforcement on Chinese refiners, banks or intermediaries could further disrupt energy markets and related financing networks.

US retaliation over tech levy

Australia’s new news bargaining charge targets platforms with over A$250 million in local digital ad revenue, imposing a 2.75% levy without media deals. US officials and allies are threatening tariff retaliation, creating uncertainty for exporters and digital investors.

Skilled migration slows construction delivery

Visa delays are leaving 162 overseas workers in the Philippines unable to start with Summit Homes, threatening 2,000 current and 2,000 planned builds. The bottleneck underscores how processing backlogs can delay housing delivery, intensify labour shortages and constrain contractors relying on foreign skills.

New US overcapacity tariffs

The US is weighing a 7.5% tariff on Chinese goods under a Section 301 overcapacity probe, which would lift effective Trump-era China duties toward 20%. Exporters, importers and manufacturers should prepare for renewed cost pressure and possible Chinese countermeasures.

US tariff and sanctions exposure

India faces escalating US trade-policy risk from a 10% Section 301 tariff, possible further excess-capacity measures, and a Senate bill allowing tariffs up to 100% on major Russian-oil buyers, directly affecting exporters’ pricing, market access, and investment planning.

Energy shock pressures growth

Second-quarter GDP slowed to 0.4% from 0.6%, while Iran-war-related energy disruption risks reigniting inflation and lifting business costs. Research cited potential 2027 growth near 0.3% and inflation up to 4.3%, threatening margins, demand and financing conditions.

Macro growth supports expansion

Indonesia reported 5.45% economic growth in first-half 2026, while investment reached Rp1,010.6 trillion and foreign investment grew 17.5% year on year. This underpins demand and industrial expansion, particularly as downstreaming investment in priority commodities reached Rp273.47 trillion.

Food Trade Friction Relief

London wants major reductions in post-Brexit agricultural and food border controls, which are among the most visible trade barriers for UK businesses. Lower checks and closer regulatory alignment would improve shelf-life, logistics efficiency and cross-border distribution reliability.

Refinery damage reshapes fuel trade

Repeated Ukrainian attacks on Russian refineries have cut crude-processing rates and forced Russia to import nearly 270,000 metric tonnes of refined fuel from Asia in August, reversing normal trade patterns and tightening domestic export controls on gasoline, jet fuel and diesel.

Agricultural Barriers Shape Trade Talks

Japan is maintaining strict quarantine and market-access scrutiny on agricultural imports, including U.S. fresh potatoes, while trade negotiations with partners such as Colombia remain stalled over farm access. These protections influence bilateral dealmaking, agro-export prospects and regulatory risk for foreign suppliers.

Digital justice reforms remain uneven

Judicial modernization and expanded magistrates’ court jurisdiction could improve commercial dispute access, but implementation gaps remain significant. A May assessment found only 52.9 percent of stakeholders formally trained on the court system and 97.2 percent reporting access difficulties, limiting near-term efficiency gains for business litigation.

Turkey Iraq oil corridor

Turkey and Iraq signed a one-year deal to move at least 750,000 barrels per day to Ceyhan, with potential to reach 1 million. Expanded flows strengthen Turkey’s hub role, refinery economics and alternative routing beyond Hormuz-related disruptions.

Maritime chokepoints disrupt oil flows

Attacks and restrictions around Hormuz and Bab al-Mandab are forcing Saudi crude onto costlier alternative routes. Shipments via Egypt’s Sumed pipeline rose from 650,000 barrels per day in June to 1.9 million in August, adding $5 per barrel and two-to-four weeks transit time.

Export Diversification Accelerates

Ottawa is responding to U.S. unpredictability by emphasizing new export markets and nearly $500 billion in infrastructure projects. For international business, this points to medium-term opportunities in logistics, trade facilitation, and non-U.S. market expansion, while also signaling a strategic rebalancing of Canadian commerce.

Russian oil dependence creates vulnerability

Russian crude accounted for 30.3% of India’s FY26 crude imports and 52% in July, helping contain costs and inflation, but exposing India’s exporters to possible US retaliation that could reshape sourcing, treasury planning, and country-risk assumptions.

EU trade pact nears signing

Indonesia and the EU are targeting IEU CEPA signature in October 2026, with 90.4% of tariff lines expected to fall immediately to zero and another 8.37% reduced gradually. The deal could materially improve market access, sourcing diversification and European investment prospects.

UAE trade and payments halt

The UAE, historically a major commercial lifeline and re-export hub for Iran, has suspended financial and economic transactions amid military escalation. Given the UAE supplied 30% of Iran’s imports worth $21 billion in 2024, the move materially disrupts payments, sourcing and transshipment channels.