Steel Protectionism Reshaping Trade

UK and EU plans to tighten tariff-free steel quotas, alongside Indian objections to UK safeguards, are increasing trade friction in a strategic sector. Producers face disrupted flows, higher import costs, weaker deal implementation prospects and broader uncertainty for industrial supply chains.

Oil And Gas Export Uncertainty

Energy trade remains constrained by blockade pressure, damaged infrastructure and sanctions, even as negotiations may temporarily ease restrictions on oil and petrochemical exports. Buyers, traders and refiners must plan for volatile Iranian supply, shifting discounts and sudden enforcement actions.

Export Manufacturing Localization Push

The government is pushing higher-value manufacturing to reach a $100 billion export target, while expanding industrial land allocations and simplifying company formation. New textile and tyre investments, including major Chinese and Turkish projects, strengthen Egypt’s appeal as a cost-competitive export platform.

Iron Ore Pricing Pressure

Australian miners are seeking government support against China’s state buyer CMRG, which is using tougher contract tactics in the US$132 billion seaborne iron ore market. With iron ore expected to generate A$114 billion this fiscal year, pricing leverage directly affects export revenues and investment planning.

EU Investment and Minerals Alignment

The EU’s €11.5 billion Global Gateway push into clean energy, transport, pharmaceuticals, and critical minerals strengthens South Africa’s access to European capital and technology. This could accelerate industrial upgrading, but also intensifies strategic competition around minerals, standards, and export orientation.

Power Grid And Energy Security

Business concern is rising over whether Taiwan can provide predictable electricity for AI, fabs, and data centers. AmCham highlighted unresolved regulatory issues and grid resilience, while growing industrial demand increases the importance of reliable power for operating continuity and future investment decisions.

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.

Transport strikes disrupt logistics

Fresh SNCF strikes are disrupting domestic and cross-border rail flows, with around one-third of TGV services canceled and regional traffic heavily affected. Labor tensions over restructuring, subsidiaries, and pay create operational uncertainty for freight, commuting, and time-sensitive supply chains.

Nickel Nationalism and Policy Uncertainty

Indonesia’s tighter nickel royalties, lower mining quotas, foreign-exchange retention rules, and stronger state oversight are unsettling investors after more than US$65 billion in Chinese downstream investment. Expansion delays, higher required returns, and supply-chain volatility could affect EV batteries, stainless steel, and smelting projects.

Defense Economy Crowding Out Growth

With defense and security projected near 40% of Russia’s 2026 budget, state resources are being redirected from civilian priorities. The resulting crowding-out may weaken infrastructure, consumer demand and long-term productivity, creating a tougher environment for non-military foreign business and investment planning.

Fiscal Support and Cost Pressures

Tokyo has approved 513.5 billion yen in utility subsidies and is considering broader fiscal support to offset energy-driven inflation. While cushioning households and small firms, added spending may deepen debt concerns and complicate policy, influencing demand conditions, bond yields, and business confidence.

War Damage to Industrial Capacity

Airstrikes, blockade pressure and infrastructure disruption have damaged Iranian businesses and parts of the oil sector, while tax revenues are weakening. International firms should expect unreliable production, delayed deliveries, degraded logistics and higher reconstruction or replacement costs across exposed sectors.

Critical Minerals Alliance Deepens

Australia and the United States have signed a critical minerals agreement including US$1 billion from each side over six months and minimum-price support. The arrangement could accelerate mining and processing investment, reduce China dependence, and reshape battery and defence supply chains.

Economic Security Rules Expand

Japan revised its economic security law to cover technologies such as seabed cables and satellite launches, while expanding JBIC support for overseas projects. Businesses in telecoms, logistics, and advanced industry should expect tighter compliance demands but greater state-backed resilience financing.

Energy Costs and Fuel Shock

Petrol reached a record R28.06 per litre as global oil disruption and phased-out fuel-levy relief lifted transport and input costs. Higher energy expenses are feeding inflation, squeezing consumer demand, and raising operating costs across manufacturing, retail, agriculture, and logistics.

Energy Export Channels Under Pressure

Beyond crude, EU discussions now include possible restrictions on LNG vessels, while sanctions may extend to major firms such as Lukoil and Rosneft. Businesses exposed to Russian hydrocarbons face greater contract risk, shipping constraints, asset impairment and accelerated diversification requirements.

Agricultural Labor Constraints Deepen

U.S. farms are relying more heavily on the H-2A visa system as broader immigration restrictions tighten labor supply; approvals rose 17% in fiscal 2026's first half. For food, agribusiness, and packaging firms, labor scarcity and compliance issues can elevate cost and supply volatility.

Industrial Competitiveness Under Pressure

Persistently high energy costs, regulation, and weaker export demand continue to erode Germany’s manufacturing base. Industrial strain is spreading beyond autos and chemicals into pharmaceuticals, raising relocation risks, reducing domestic investment, and complicating long-term capacity planning for international firms.

Competitive manufacturing relocation opportunity

India is pushing for tariff advantages over Asian rivals such as Vietnam, Bangladesh, Sri Lanka, and Pakistan, which could materially influence global firms’ China-plus-one allocations, export-platform investments, and long-term supply-chain diversification into Indian manufacturing clusters.

Administrative Reform Disrupts Execution

Vietnam’s sweeping state restructuring cut ministries from 22 to 17, consolidated 63 provinces into 34 and eliminated roughly 80,000 civil-service positions. While intended to improve efficiency, the transition is creating short-term delays and uneven enforcement affecting licensing, approvals and operational predictability.

Forced-Labour Compliance Pressure

The United States has proposed an extra 10% tariff on Canada for allegedly weak forced-labour enforcement, though USMCA-compliant goods remain exempt. Canadian authorities have detained only 50 suspect shipments since 2020, with two confirmed cases, increasing compliance, audit and documentation burdens for importers and manufacturers.

Petroleum Arrears Clearance Boost

Cairo says it reduced overdue payments to foreign oil and gas partners from $6.1 billion in June 2024 to zero by June 2026. This materially improves investor confidence, supports drilling and field development, and may revive medium-term upstream investment flows.

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.

China dependency reshapes trade

Russia’s economic pivot has made China its dominant commercial lifeline, with bilateral trade reaching about $228 billion in 2025. Russia exported roughly $126 billion of raw materials and imported about $102 billion of goods, increasing exposure to Chinese pricing, finance and logistics leverage.

USMCA Renewal and Tariff Uncertainty

Canada faces heightened trade uncertainty as Washington signals it may not renew USMCA on July 1, likely triggering annual reviews. With nearly 70% of Canadian exports going to the United States, unresolved auto, steel, aluminum and retaliatory tariff disputes materially affect investment planning and cross-border supply chains.

Pacific Infrastructure Competition Intensifies

Australia is expanding treaties, policing support and infrastructure financing across Pacific Island states, including renewed engagement with Solomon Islands. This contest for influence matters commercially because ports, telecoms, logistics corridors and project approvals in the Pacific increasingly reflect strategic, not purely economic, criteria.

Forced-labor tariff exposure grows

The USTR proposed an additional 10% tariff on Mexico under a forced-labor-related Section 301 process, though Mexico says about 85% of exports complying with USMCA rules would be exempt. Compliance, traceability, and supplier due diligence are becoming higher-priority operating requirements.

Fiscal strain and policy risk

Federal debt has exceeded $39 trillion, while the fiscal 2025 deficit reached $1.8 trillion and net interest topped $1 trillion. Mounting budget pressure raises medium-term risks of tax, spending, and policy shifts that could affect interest rates, public investment, and business confidence.

Energy policy clouds investment

Mexico’s state-favoring energy policies remain a major bilateral dispute, with U.S. industry alleging Pemex benefits at private investors’ expense. Uncertainty over market access, electricity availability, and dispute resolution continues to weigh on industrial projects, operating costs, and long-term capital allocation.

Migration, Housing, and Labor Tightness

Migration remains politically and economically sensitive as net arrivals are projected near 300,000, after peaks above 500,000. Strong inflows support labour supply and consumption, but intensify housing shortages, rental inflation, and political pressure for tighter visa settings that could affect staffing-dependent sectors.

Oil Price And Hormuz Exposure

Pakistan remains highly exposed to Gulf energy and shipping disruptions. Strait of Hormuz instability has already raised LNG and oil-related costs, lifted inflation back upward and increased import bills. Energy-intensive sectors, freight operators and importers face greater hedging and procurement risk.

Export Proceeds Repatriation Tightens

From 1 June 2026, non-oil exporters must retain 100% of natural-resource export proceeds domestically for at least 12 months, while oil and gas exporters must keep 30% for three months, affecting liquidity, treasury management and cross-border financing structures.

Won Volatility and Capital Outflows

The won has fallen to its weakest level since 2009, prompting stabilization measures, while foreign investors reportedly withdrew about $70 billion from Korean equities in first-half 2026, complicating hedging, pricing, financing, and cross-border investment planning for businesses.

Arctic LNG sanctions leakage

Despite EU restrictions, more than 8.3 million tonnes of Yamal LNG reached EU ports in January-May, up 17.9% year on year. This highlights sanctions loopholes, but also signals abrupt future enforcement risk for utilities, shippers, financiers and LNG-linked infrastructure projects.

China Tightens Critical Minerals

China’s export restrictions on dual-use items and rare earths to Japan have intensified supply insecurity. March and April shipments reportedly fell 88% and 82% year on year, threatening semiconductors, medical equipment, electronics, and broader high-value manufacturing supply chains.

Trade Negotiations Reshape Market Access

Indonesia is advancing multiple trade tracks, including 18 prospective U.S. tariff exclusions, IEU-CEPA discussions, CPTPP and OECD accession, and the EAEU free trade pact covering over 98% of Indonesia-Russia trade, reshaping tariff exposure and export planning.