Iran-China and Iran-Russia Partnerships

Iran relies on China for 90% of oil exports and has deepened strategic ties with Russia, including infrastructure and military cooperation. These alliances provide economic lifelines but expose businesses to secondary sanctions and geopolitical volatility.

Energy Infrastructure And Mineral Scarcity

US energy transition faces hardware constraints, including transformer and copper shortages, and dependence on Asian imports. Private energy islands and methane pyrolysis are emerging, but mineral security and grid bottlenecks threaten reliability and cost for global supply chains.

Regulatory and Legal Uncertainty

Frequent changes in Turkey's regulatory environment, including taxation and foreign investment laws, create uncertainty for businesses. This unpredictability can delay project approvals, increase compliance costs, and deter long-term foreign direct investment, affecting overall market attractiveness.

Labor Market Dynamics and Skill Shortages

Pakistan's labor market is characterized by a large, young workforce but suffers from skill mismatches and low productivity. These factors affect manufacturing quality and innovation capacity, influencing foreign investors' decisions regarding local operations and outsourcing.

Digital Transformation and Innovation Ecosystem

India's rapid digital transformation, supported by government initiatives like Digital India, fosters innovation and new business models. The growth of fintech, e-commerce, and IT services sectors enhances India's attractiveness as a technology hub and a destination for digital investments.

Critical Minerals And Resource Sovereignty

South Africa’s mineral wealth faces strategic challenges as global demand for energy-transition metals rises. The Anglo American–Teck merger highlights regulatory gaps and declining tax revenues, raising concerns about mineral sovereignty and the nation’s ability to capture value from mining investments.

Arctic Geopolitics and Resource Competition

Greenland’s vast mineral reserves, especially rare earths, are increasingly accessible due to climate change, attracting global interest. Strategic competition among the US, EU, Russia, and China over Arctic resources and routes directly impacts trade, investment, and supply chain strategies.

China’s Beef Tariffs Hit Exports

China imposed a 55% tariff on Brazilian beef exceeding a 1.1 million ton quota, threatening up to US$3 billion in export revenue for 2026. This measure disrupts supply chains and forces Brazilian producers to seek new markets and renegotiate trade terms.

Regulatory Shifts And Market Access

Recent regulatory changes, such as eased antitrust laws for energy users and evolving empowerment policies, create both opportunities and uncertainties. Businesses must navigate shifting compliance requirements, local content mandates, and potential export controls, affecting market access and investment planning.

Fiscal Discipline and Tax Reform Challenges

Thailand’s Medium-Term Fiscal Framework targets deficit reduction and public debt control, with phased VAT increases and tax reforms. Political will is crucial; delays or reversals risk credit downgrades, higher funding costs, and reduced fiscal space for crisis response.

Vision 2030 Economic Diversification Acceleration

Saudi Arabia is entering the third phase of Vision 2030, shifting from launching reforms to maximizing their impact. The focus is on logistics, tourism, and non-oil sectors, with hundreds of billions in government and private investment, reshaping trade and supply chain opportunities for global firms.

Sanctions, Export Controls, and Geopolitical Tensions

The UK’s involvement in enforcing sanctions, particularly against Russia and in coordination with the US, affects global supply chains and trade flows. Ongoing tensions and policy shifts in sanctions regimes require businesses to maintain robust compliance and risk management frameworks.

Judicial and Institutional Reforms Impacting Governance

Ongoing institutional reforms, including changes to the judiciary, media regulation, and civil service, are reshaping Israel’s governance landscape. These measures, while aimed at political consolidation, raise concerns about democratic norms, regulatory predictability, and the rule of law, with direct implications for investor risk and business operations.

China-Pakistan Economic Corridor 2.0 Expansion

Pakistan and China agreed to upgrade CPEC, focusing on industry, agriculture, mining, and infrastructure. The new phase aims to deepen trade, technology, and investment ties, with third-party participation encouraged, making CPEC central to Pakistan’s growth and regional integration.

Rising Global Trade Barriers

U.S. tariffs and the EU’s Carbon Border Adjustment Mechanism are increasing costs for Korean exports, particularly autos, steel, and electronics. These barriers challenge competitiveness and require strategic adjustments in pricing, compliance, and market targeting for international businesses.

Political Stability and Institutional Reform

President Sheinbaum’s administration faces debates over electoral and judicial reforms, with opposition warning of risks to democratic institutions. Market reactions have been positive so far, but political uncertainty could affect investor confidence and regulatory predictability.

Mercosur-EU Trade Deal Transformation

The historic Mercosur-European Union trade agreement, approved in January 2026, will eliminate tariffs on up to 92% of exports over a decade. This deal is expected to boost Brazilian exports by US$7 billion, especially in agribusiness and processed goods, while requiring compliance with strict sustainability standards.

Geopolitical Balancing: China, US, Japan

South Korea is navigating complex regional dynamics, balancing economic ties with China, security alignment with the US, and strategic engagement with Japan. President Lee’s diplomatic outreach aims to stabilize relations and manage risks from Taiwan tensions and North Korean provocations, affecting business confidence and supply chain security.

Escalating US-Mexico Security Pressures

US threats of military intervention against Mexican drug cartels, following actions in Venezuela, have heightened bilateral tensions. Mexico’s government firmly rejects intervention, but the risk of unilateral US actions poses significant operational and reputational risks for international businesses.

Declining Foreign Investment and Policy Uncertainty

Foreign direct investment dropped 82% year-on-year, reflecting high taxes, inconsistent regulation, and bureaucratic inefficiencies. The Special Investment Facilitation Council (SIFC) aims to streamline approvals, but investor confidence remains fragile, impacting long-term capital flows and supply chain decisions.

Currency Fluctuations and Exchange Controls

The Egyptian pound's volatility and government-imposed exchange controls affect import costs, export competitiveness, and repatriation of profits. Currency instability poses risks for supply chains reliant on imported inputs and complicates financial planning for foreign investors.

Resilient Economic Growth Amid Global Headwinds

Vietnam’s GDP grew by 8% in 2025, outperforming regional peers despite US tariffs and global uncertainties. Export-led growth, manufacturing strength, and political stability underpin robust performance, though high openness leaves the economy vulnerable to external shocks and trade policy changes.

US Retreat From Climate Treaties

The United States’ withdrawal from the UNFCCC and 65 other international organizations marks a decisive shift away from multilateral climate cooperation. This move risks isolating US firms from global climate finance, standards, and supply chains, impacting competitiveness and international investment.

Energy Transition and Industrial Competitiveness

Germany's post-Russia energy policy has led to high energy prices and supply insecurity, undermining industrial competitiveness. Heavy reliance on expensive LNG imports and renewables, coupled with the nuclear phase-out, has increased costs for business, driving capital flight and threatening long-term investment.

Geopolitical Risks in East Asia

Rising military tensions over Taiwan and the Senkaku Islands, with Chinese naval activity and Japanese security commitments, increase the risk of regional conflict. This instability directly affects trade, investment flows, and the strategic calculus of multinational firms operating in Asia.

Foreign Direct Investment Rebounds

FDI pledges hit a record $36 billion in 2025, up 4.3%, with actual investments surging 16.3%. Political stabilization and the APEC summit spurred greenfield investments, especially from the U.S. and EU, strengthening Korea’s role in global supply chains and advanced industries.

Regional Integration and Infrastructure Investment

South Africa’s strategic position in Africa is enhanced by regional trade initiatives and infrastructure reforms, including public-private partnerships in energy and logistics. These efforts support supply chain diversification and position the country as a gateway to the continent’s growing markets.

Sanctions Regimes and Regulatory Risk

Expanding US sanctions against Venezuela, China, and other actors create complex compliance challenges and disrupt global supply chains. Firms must navigate evolving enforcement, secondary sanctions, and political unpredictability, increasing operational and reputational risks.

EU-Mercosur Trade Agreement Tensions

France’s opposition to the EU-Mercosur trade deal has triggered mass farmer protests and political divisions. The agreement, set to be signed despite French resistance, could flood markets with cheaper imports, threatening French agriculture and food sovereignty.

Geopolitical Risks Impact Investment Climate

Heightened China-Japan tensions over Taiwan, coupled with regional military posturing, increase uncertainty for foreign direct investment. Businesses face elevated regulatory and operational risks, with potential for further escalation affecting market stability and cross-border capital flows.

Economic Reform and IMF Support

Egypt's ongoing economic reforms, supported by IMF programs, aim to stabilize macroeconomic conditions, control inflation, and attract foreign investment. These reforms impact investor confidence and trade policies, influencing international business operations and capital flows into Egypt.

Labor Market Transformation and Demographic Advantage

Vietnam’s young population and rising labor productivity underpin its competitiveness. The government is prioritizing workforce upskilling, digital transformation, and social equity, aiming to sustain productivity growth above 8.5% annually (2026-2030) and maintain its position as a leading manufacturing hub.

Supply Chain Resilience and Infrastructure

Border instability, logistics costs at 15–16% of GDP, and reliance on imported components expose Thailand’s supply chains to disruption. Calls for infrastructure upgrades, automation, and regional energy cooperation are central to enhancing resilience and lowering operational risks.

Regional Geopolitical Tensions in Yemen

Saudi-UAE relations have deteriorated over Yemen, with Riyadh demanding UAE troop withdrawal and escalating military actions. This conflict increases regional risk, potentially impacting trade routes, investor sentiment, and supply chain stability for international businesses.

Structural Labor and Property Market Challenges

High household debt (86.8% of GDP), labor shortages, and a fragile property market with unsold stock and tight credit constrain domestic demand and business expansion. Government stimulus and reforms are needed to address these structural weaknesses and support sustainable growth.

Oil Market Influence

Saudi Arabia's role as a leading oil producer significantly impacts global energy markets. Its production decisions influence oil prices, affecting international trade costs and energy-dependent industries worldwide. Investors closely monitor Saudi policies to anticipate market shifts and adjust strategies accordingly.