Investment Climate Reforms Accelerate

Indonesia’s government has streamlined investment licensing through the OSS system and risk-based regulation, issuing 175 automatic permits in early 2026. These reforms improve investor confidence, reduce bureaucratic delays, and create a more predictable business environment.

Shifting Global Trade Alliances

US unpredictability has accelerated trade realignments, with the EU and India finalizing deals and Germany increasing investment in China. Major economies are hedging against US volatility by building alternative trade frameworks, reducing reliance on American markets and supply chains.

Industrial tariffs and beneficiation policy

Eskom is proposing interim discounted electricity pricing for ferrochrome (e.g., 87c/kWh) and extensions of take-or-pay relief, as smelters struggle with power costs. Such interventions signal ongoing policy activism around beneficiation, affecting mining-linked investors’ cost curves and offtake planning.

EV battery downstream investment surge

Government-backed and foreign-led projects are accelerating integrated battery chains from mining to precursor, cathode, cells and recycling, including a US$7–8bn (Rp117–134tn) 20GW ecosystem. Opportunities are large, but localization, licensing, and offtake qualification requirements are rising.

Syria Policy and Regional Security Risks

Turkey’s evolving Syria strategy, focused on eliminating YPG/PKK influence and supporting Syrian state control, aims to stabilize its southern border. While this may improve regional security and trade, ongoing tensions and humanitarian concerns pose risks for cross-border operations and investor confidence.

Semiconductor reshoring accelerates

Japan is deepening economic-security industrial policy around chips. TSMC plans 3‑nanometer production in Kumamoto, with reported investment around $17bn, while Tokyo considers additional subsidies. This strengthens local supply clusters but intensifies competition for land, power, engineers, and suppliers.

Rafah Crossing and Border Controls Impact Trade

The partial and conditional reopening of the Rafah crossing with Egypt, under strict Israeli oversight, restricts the flow of goods and people. These controls hinder humanitarian aid, economic recovery, and cross-border trade, directly affecting supply chain resilience and regional business operations.

Energy Transition: Nuclear and Renewables

South Korea is advancing its energy transition by planning two new nuclear reactors by 2038 and emphasizing renewables to meet carbon neutrality goals. This shift will influence industrial energy costs, supply chain sustainability, and investment in green technology sectors.

Resilient Policy Reforms and Governance

Recent reforms include tax simplification, legal modernization, and improved ease of doing business. These measures support startups, MSMEs, and foreign investors, fostering a more transparent, predictable, and growth-oriented business environment that underpins India’s economic ascent.

EU-India FTA Reshapes Trade Landscape

The EU-India Free Trade Agreement, praised as historic, eliminates tariffs on nearly all goods and is expected to double Finland–India trade to €6 billion by 2032. This deal will significantly boost Finnish exports, diversify supply chains, and deepen political ties, providing new opportunities in technology, manufacturing, and services.

Infrastructure Modernization Drive

The UK is accelerating infrastructure investment, focusing on energy grid modernization, renewables, and transport. The National Wealth Fund prioritizes sectors like carbon capture and hydrogen, presenting opportunities and challenges for investors and operators.

Port attacks disrupt Black Sea

Repeated strikes on Odesa-area ports and logistics assets are cutting export earnings by about US$1bn in early 2026 and reducing grain shipment capacity by 20–30%. Higher freight, insurance, and rerouting to rail constrain metals and agrifood supply chains.

Digital Blackouts and Technology Restrictions

Iran’s government has imposed repeated internet blackouts and tightened technology controls to suppress dissent, disrupting business operations, cross-border communications, and digital commerce. These restrictions have also driven a black market for smuggled technology and hindered foreign investment in Iran’s digital sector.

Regulatory Reforms for Foreign Investment

Sweeping reforms to business, visa, and property laws are opening more sectors to foreign ownership, simplifying bureaucracy, and enhancing expat residency options. These changes aim to boost FDI and position Thailand as Southeast Asia’s leading expat and investment destination.

US Section 232 chip tariffs

US semiconductor tariff planning and AI-chip measures create uncertainty on chips and derivative products. Korea may need “investment-for-exemptions” negotiations similar to Taiwan’s offset model, influencing where fabs, packaging, and R&D are located and affecting compliance, pricing, and market access strategies.

Critical Energy Sector Vulnerabilities

Iran’s oil and gas infrastructure faces decay, sabotage, and sanctions pressure. Power outages, fuel shortages, and the threat of supply disruptions—especially in the Strait of Hormuz—pose significant risks to global energy markets and supply chains reliant on Iranian exports.

Semiconductor Reshoring and Tech Investment

A landmark US-Taiwan trade deal is driving $250 billion in Taiwanese investment into US semiconductor manufacturing, aiming to secure critical supply chains and reduce dependence on Asia. This reshoring effort is central to US industrial and national security strategies.

Export and Import Dynamics Shift

Germany’s modular building exports are rising, supported by demand for sustainable and high-quality solutions in Europe and beyond. Import trends reflect increased sourcing of advanced materials and components, impacting trade balances and supply chain strategies for global firms.

Energy mix permitting and local opposition

While no renewables moratorium is planned, the PPE points to slower onshore wind/solar and prioritizes repowering to reduce local conflicts. Permitting risk and community opposition can delay projects, affecting PPAs, factory decarbonization plans, and ESG delivery timelines.

EV policy reset and incentives

Canada scrapped the 2035 100% ZEV sales mandate, shifting to tighter tailpipe/fleet emissions standards plus renewed EV rebates (C$2.3B over five years) and charging funding (C$1.5B). Automakers gain flexibility; investors must reassess demand forecasts and compliance-credit markets.

Fiscal Expansion and Market Volatility

Japan’s aggressive fiscal stimulus and proposed suspension of the 8% food consumption tax have triggered bond market volatility and yen fluctuations. With debt-to-GDP exceeding 230%, concerns over fiscal sustainability and potential debt-servicing risks are affecting global investor sentiment and cross-border capital flows.

Canada-China Strategic Trade Pivot

Canada’s new agreement with China lowers tariffs on Chinese EVs and secures reduced Chinese tariffs on Canadian agriculture. This shift diversifies trade but risks US retaliation, reshapes supply chains, and could attract Chinese investment in Canadian manufacturing and energy sectors.

Green Transition and Cybersecurity Risks

Rapid expansion of decentralized, internet-connected renewable energy infrastructure introduces significant cybersecurity vulnerabilities. Securing the grid now requires a unified public-private security framework to mitigate risks of data manipulation and widespread outages.

Frozen assets, litigation, retaliation risk

Debate over using immobilized Russian sovereign assets to back Ukraine financing is intensifying, alongside Russia’s lawsuits against Euroclear seeking about $232bn. Businesses face heightened expropriation/retaliation risk, asset freezes, and legal uncertainty for custodial holdings, claims, and arbitration enforceability.

AB FTA’larının asimetrik etkisi

AB’nin üçüncü ülkelerle yaptığı STA’lar, Türkiye’nin Gümrük Birliği nedeniyle tarifeleri uyarlamasına rağmen karşı pazara aynı ayrıcalıkla erişememesi sorununu büyütüyor. Örneğin AB‑Hindistan STA’sı Türkiye lehine işlemiyor; rekabet baskısı ve pazar payı riski yaratıyor.

AI-Driven Layoffs and Workforce Restructuring

A wave of major layoffs is sweeping the US, with Amazon alone cutting 16,000 jobs in January 2026 and UPS reducing up to 30,000 positions. These cuts are driven by rapid adoption of AI and automation, post-pandemic overhiring corrections, and cost pressures from tariffs and inflation. The trend is reshaping labor markets, increasing anxiety, and forcing companies to invest in upskilling or risk investor backlash. This structural shift impacts tech, logistics, retail, and manufacturing, with significant implications for consumer demand and supply chain resilience.

US–China tariff escalation risk

Persistent US tariff actions and Section 301 measures, plus partner-country spillovers (e.g., Canada EV quota deal drawing US threats), increase landed costs, compliance complexity, and transshipment scrutiny—raising uncertainty for exporters, importers, and North America–linked supply chains.

Trade controls and anti-circumvention squeeze

Sanctions are broadening beyond energy to metals, chemicals, critical minerals (over €570m cited), plus export bans on dual-use goods and services. New anti-circumvention tools may restrict exports to high‑risk transshipment hubs, tightening supply of machinery, radios, and industrial inputs to Russia-linked supply chains.

Semiconductor Supply Chain Resilience

Japan is accelerating investment in domestic and allied semiconductor capacity, with TSMC's Kumamoto expansion and TOPPAN's new lines. The sector is driven by AI demand, strategic 'de-China' moves, and advanced process upgrades, reshaping global supply chains and investment flows.

Internet shutdowns and digital controls

Near-total internet blackouts and tighter censorship have cut businesses off from customers, suppliers, and payments, with reported losses from millions to tens of millions of dollars per day. Expect unreliable connectivity, mandatory use of domestic platforms, and elevated cybersecurity exposure.

Won volatility and hedging policy shift

The Bank of Korea flagged won weakness around 1,450–1,480 per USD and urged higher FX hedging by the National Pension Service; NPS plans may cut dollar demand by at least $20bn. Currency swings affect import costs, repatriation, and pricing for export contracts.

Nearshoring Momentum and Supply Chain Shifts

Mexico’s role as a nearshoring hub is accelerating, driven by US-China tensions and global supply chain recalibration. Firms are relocating manufacturing to Mexico for resilience, but face challenges including labor shortages, infrastructure gaps, and regulatory complexity.

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.

Belt and Road Initiative Intensifies

China’s Belt and Road Initiative signed $213 billion in new deals in 2025, focusing on energy, metals, and infrastructure in Africa and Central Asia. This expansion strengthens China’s global economic reach and creates new opportunities and dependencies for partners.

Shadow fleet shipping disruption

Iran’s sanctioned “shadow fleet” faces escalating interdictions and designations, with vessels and intermediaries increasingly targeted. Seizures and ship-to-ship transfer scrutiny raise freight, insurance, and demurrage costs, delaying deliveries and complicating due diligence for traders, terminals, and banks.

Massive Reconstruction and Investment Plans

The EU, US, and international institutions are preparing $800 billion in long-term funding for Ukraine’s recovery, focusing on infrastructure, energy, and technology. Implementation depends on security guarantees, peace progress, and overcoming institutional and corruption barriers.