Foreign Investors Continue Expanding

International firms are still scaling in Saudi Arabia despite regional tensions, supported by Vision 2030 reforms and regional headquarters incentives. Swedish data showed 77% of companies were profitable in 2025, with many planning expansion in AI, telecoms, green technology, and infrastructure.

India FTA Reshapes Trade

The UK-India trade pact enters force on 15 July, cutting tariffs across most trade lines and expanding services mobility. It should lift bilateral trade and investment, but firms in steel and compliance-heavy sectors must adapt quickly to new quotas and registration rules.

Trade exposure to tariff shifts

External trade conditions remain volatile. South Africa’s US tariff rate may fall from 30% to 12.5%, but shipments to the US were already down 56% year on year through April. Exporters still face uncertainty from Washington’s fast-changing trade enforcement approach.

Cambodia Border Dispute Disruption

Thailand’s freeze on border reopening and wider bilateral talks with Cambodia, alongside UNCLOS conciliation, raises logistics and security risks for cross-border trade. The dispute covers 26,000 sq km with energy resources valued near US$300 billion, complicating regional supply chains and investment planning.

Fragilidad macro y de inversión

Aunque alrededor de 85% de las exportaciones mexicanas a Estados Unidos entra sin arancel bajo T-MEC, la economía llega débil a la revisión. Con crecimiento cercano al estancamiento y presión potencial sobre el peso, nuevos choques comerciales podrían frenar empleo, FDI y consumo empresarial.

Defense Industry Industrial Upside

Ukraine’s defense sector is becoming a major industrial growth pole, supported by a €6 billion EU drone package and new partnerships with countries such as Latvia. Transparent tenders and joint ventures could expand manufacturing, but procurement governance and wartime execution risks remain material.

Tax and Regulatory Friction

Businesses face shifting tax administration rules as lawmakers debated expanded banking-data access, higher penalties, unified withholding on many services at 7%, and selective relief for exporters and IT. Regulatory unpredictability complicates pricing, compliance systems, and formal-sector expansion decisions.

State Export Control Expands

The new single-gate export model under PT DSI for coal, palm oil, and ferroalloys centralizes trade oversight from June 2026, with full rollout by January 2027. It may improve transparency, but adds compliance complexity, political risk, and potential WTO-related trade frictions for exporters.

Domestic inflation and rate uncertainty

The central bank cut the key rate to 14.5% in April and may ease further, yet policymakers still cite inflation and external risks. Volatile borrowing costs, ruble swings and weaker growth complicate pricing, capital budgeting, financing and consumer-market planning inside Russia.

Coalition Politics and Reform Uncertainty

Government of National Unity tensions and cabinet reshuffle pressures are complicating policy execution. Business faces slower reform delivery on infrastructure, agriculture and industry, while political fragmentation increases uncertainty around regulations, implementation timelines and public-sector accountability critical to investment decisions.

Tourism And Aviation Resilience

Tourism and aviation remain key hard-currency earners despite regional conflict. Egypt handled 70.7 thousand flights and 9.4 million passengers in January-April, up 7.4% and 6.8%, while incentive packages for Sharm el-Sheikh and Hurghada aim to preserve airline capacity and visitor inflows.

Industrial Overcapacity Spillovers

China’s manufacturing surplus continues to flood external markets in electric vehicles, solar, steel, chemicals and machinery, intensifying anti-dumping actions worldwide. For international businesses, this means lower input prices in some sectors but greater tariff risk, margin compression, policy volatility and competitive disruption across third markets.

Energy Tariff And Subsidy Stress

Electricity pricing remains a major operating risk as fuel adjustments may add Rs1.74 per unit, untargeted subsidies are being reduced, and industrial users face elevated tariffs. Higher power costs, loadshedding and policy uncertainty directly pressure manufacturing margins and investment viability.

Riyadh Air Hub Expansion

Riyadh Air’s launch marks a major push to make Riyadh a global transport and business hub. Backed by the $900 billion PIF, the carrier targets 100-plus cities and supports wider airport expansion, improving connectivity while exposing aviation plans to regional security shocks.

Won Volatility and Capital Outflows

The won has fallen to its weakest level since 2009, while foreign investors reportedly withdrew about $70 billion from Korean equities in first-half 2026. Currency volatility raises hedging costs, complicates import pricing, and can delay investment decisions despite strong external balances.

Ceasefire diplomacy and reconstruction uncertainty

Mediated proposals on Hamas disarmament, phased Israeli withdrawal, and Gaza governance remain unresolved, delaying clarity on reconstruction, border arrangements, and aid access. For businesses, prolonged diplomatic uncertainty limits visibility on infrastructure rebuilding, donor flows, and future operating conditions near Gaza.

BEE Rules Complicate Market Entry

Transformation and localization rules continue to shape foreign investment structures, especially in technology and telecoms. Starlink’s lack of a licence application highlights how B-BBEE compliance, equity-equivalent requirements, data rules and security oversight can delay market entry and partnership strategies.

Talent And Labor Bottlenecks

Taiwan’s semiconductor expansion is increasingly constrained by skilled labor shortages. TSMC identified talent as its biggest gap, even as it employed more than 90,000 people globally in 2025, implying continued competition for engineers, higher labor costs, and execution risk for capacity expansion.

Regional Supply Chain Competition Rises

Vietnam is gaining from ASEAN production shifts and could capture manufacturing from neighbors, including reported Japanese auto-component relocation interest from Indonesia. At the same time, deeper Thailand-Vietnam coordination in electronics and semiconductors shows regional supply chains are integrating while competition for export share and FDI intensifies.

Immigration Constraints Pressure Operations

Tighter immigration rules and higher visa costs are making US hiring more difficult across agriculture, technology, and skilled services. Employers face longer delays, higher compliance burdens, and labor shortages, raising operating costs and complicating expansion, localization, and project execution plans.

Governance and Rule-of-Law Discount

Turkey’s investment case is supported by industrial scale and geography, but long-term capital still faces governance concerns. Business sentiment remains constrained by persistent questions around legal predictability, property rights and institutional independence, which can raise risk premiums, slow FDI decisions and shorten investment horizons.

Sanctions Enforcement Hardening

The UK’s seizure of a Russian-linked shadow-fleet tanker signals more assertive sanctions enforcement in nearby waters. Shipping, energy trading and marine insurers should expect tougher due diligence, greater legal exposure and heightened disruption risk around Russia-linked cargoes and counterparties.

Agricultural Disease and Export Losses

The foot-and-mouth disease outbreak is damaging agribusiness trade performance and policy credibility. Reports indicate total beef exports fell 26%, shipments to China dropped 69%, and export revenue losses reached about R5.6 billion, affecting food supply chains and rural investment sentiment.

U.S. Non-Tariff Barrier Pressure

Washington is pressing Ottawa on dairy access, provincial procurement, liquor bans, digital streaming levies, customs harmonization and forced-labour enforcement. These disputes could trigger bilateral side deals, regulatory changes and higher compliance costs for firms operating across integrated North American value chains.

Energy Security Gains Importance

India-US discussions increasingly connect trade with energy security, including larger Indian purchases of US energy products. For business, this strengthens prospects in hydrocarbons, equipment, shipping, and industrial inputs, while also highlighting exposure to external price shocks and maritime disruption risks.

Conflict Spillover Threatens Operations

Iran’s regional links to Hezbollah, the Houthis, and wider Middle East flashpoints keep ceasefires fragile. Security incidents in Lebanon, Red Sea shipping disruptions, and renewed U.S.-Israeli tensions can quickly trigger new sanctions, transport interruptions, workforce risks, and abrupt deterioration in business continuity conditions.

China competition and derisking

Germany is hardening its stance toward China as subsidized imports pressure autos, machinery, chemicals, and intermediate goods. Estimates suggest roughly 400,000 industrial jobs were lost from 2019-2025 due to Chinese trade distortions, accelerating derisking, tariffs debate, and supplier diversification strategies.

USMCA Review and Tariff Uncertainty

Washington’s decision not to renew USMCA for another 16 years pushes North American trade into annual reviews, while auto and steel side talks continue. With nearly US$2 trillion in regional trade exposed, investors face prolonged policy uncertainty and supply-chain recalibration.

Trade diplomacy and market access

Indonesia is accelerating IEU-CEPA, CPTPP accession, OECD accession, and broader economic partnerships while defending contested commodity policies. For exporters and investors, improved agreements could expand market access, but sustainability rules, EU disputes, and uneven policy execution still create trade friction and certification burdens.

UK-US Deal Near Completion

London and Washington appear close to finalising a trade deal covering tariff relief for British cars, steel and aluminium. If completed, it would improve market access and supply-chain predictability, though unresolved technical points still create short-term planning uncertainty for exporters.

Semiconductor Supercycle Concentration Risk

South Korea’s export rebound is increasingly concentrated in semiconductors, with chip exports surging 169.4% year on year to $37.2 billion in May. This supports growth and investment, but heightens exposure to AI demand swings, sector-specific shocks, and national revenue concentration.

China Risk Drives Derisking

Tokyo is pushing G7 coordination against China’s export restrictions and economic coercion while tightening its own economic security framework. Businesses face stronger pressure to diversify sourcing of critical minerals, technology inputs, and strategic components away from concentrated China-linked supply chains.

Hardening EU-China Trade Defenses

France is pushing faster EU safeguards, tariffs, and ‘European preference’ measures against Chinese competition in EVs, steel, chemicals, and pharmaceuticals. This may support local industry but increase regulatory intervention, retaliation risk, sourcing shifts, and compliance complexity for multinationals.

Critical Minerals Investment Surge

Canada secured 13 new critical-minerals partnerships at the G7 expected to unlock more than $5 billion across silica, graphite, phosphate, rare earths and processing. The push strengthens non-Chinese supply chains and improves Canada’s attractiveness for mining, battery, defense and advanced manufacturing investors.

Macro Volatility and Financing Costs

Turkey’s policy rate remains 37%, overnight lending 40%, while annual inflation was 32.61% in May and the lira traded near 46 per dollar. Elevated borrowing costs, FX volatility and reserve pressures complicate pricing, hedging, working-capital planning and investment timing.

Hormuz Disruption Reshapes Trade

Recent war-related disruption in the Strait of Hormuz cut regional flows sharply, with vessel traffic later recovering to only around half of normal levels. Saudi firms benefit from Red Sea routing and Petroline capacity, but importers, exporters and insurers still face elevated logistics risk.