US Tariffs and Trade Policy Uncertainty

Despite 20% US tariffs on Vietnamese exports, trade volumes to the US have reached record highs. However, ongoing tariff threats and negotiations inject volatility into Vietnam’s export-led growth model, compelling businesses to diversify markets and adapt to shifting global trade policies.

US Military and Financial Support Remains Critical

The US continues to provide substantial military and financial aid to Israel, underpinning its security and economic resilience. This support shapes Israel’s defense posture, investment climate, and risk environment, but also ties business operations to evolving US-Israel policy dynamics and potential geopolitical backlash.

SME Vulnerability and Regulatory Shifts

SMEs, contributing 35% of GDP, face challenges from new trade regulations, sustainability rules, and limited access to technology. Support for digitalization, green finance, and regional integration is essential to strengthen SME resilience and global supply chain participation.

Sustainability Standards and Market Access

Environmental regulations and sustainability standards are increasingly shaping Brazil’s export competitiveness. The end of the Soy Moratorium raises deforestation concerns, potentially threatening market access, especially in the EU, where new trade deals include strict environmental provisions.

Commodity Export Volatility

South Africa’s economy benefits from strong performance in mining and agriculture, with rising metal prices and a robust rand supporting exports. However, global commodity price fluctuations and logistical bottlenecks pose risks to export revenues and supply chain resilience.

Supply Chain Relocation and Resilience

Vietnam remains a top destination for supply chain relocation, with firms like Google shifting production from China. However, underdeveloped local supplier networks, logistics gaps, and regulatory bottlenecks present ongoing risks to supply chain resilience and operational efficiency for international manufacturers.

EU-Mercosur Trade Deal Backlash

The imminent EU-Mercosur trade agreement faces strong opposition from French farmers and political factions, who fear market flooding by cheaper imports and threats to food security. Protests and government support measures highlight deep divisions, affecting agricultural supply chains and broader trade policy.

Sanctions Severely Disrupt Trade Flows

US and international sanctions continue to cripple Iran’s ability to access global markets, with over 38% of oil revenues not returning to the country. This impedes foreign trade, complicates payment channels, and heightens risk for international partners.

Global Minimum Tax Implementation

Thailand’s adoption of the OECD-led Global Minimum Tax will require large multinationals to pay at least a 15% effective rate. This measure, expected to raise 12 billion baht annually, may influence investment structures and corporate tax planning for global firms.

Corporate Governance and ESG Reforms

Taiwan’s stock exchange launched the Power UpTW initiative, with nearly half of listed companies participating in governance and ESG improvements. Enhanced transparency and disclosure standards aim to boost investor confidence and international competitiveness.

Supply Chain Resilience and Critical Technologies

Recent Indo-German agreements emphasize collaboration on semiconductors, critical minerals, and digital technologies. These initiatives aim to secure supply chains, foster joint R&D, and support Industry 4.0, reflecting Germany’s strategic response to global disruptions and technological competition.

Trade Policy And FTA Leverage

Vietnam actively expands and upgrades FTAs, targeting 8% export growth and a $23 billion trade surplus in 2026. FTAs with the US, EU, CPTPP, and RCEP drive market access, regulatory reforms, and higher standards, fostering export diversification and resilience against global trade tensions.

Internationalization Amid Domestic Uncertainty

Facing political and economic uncertainties, 56% of French business leaders plan to expand internationally by 2026, up from 36% last year. Europe and Southeast Asia are favored destinations, reflecting a strategic shift to diversify risks and sustain growth.

Infrastructure Investment Transforms Logistics

Sydney’s decade-long infrastructure boom, including metro rail, motorways, and airport links, has reshaped urban logistics and connectivity. While future mega-projects may slow, completed upgrades enhance supply chain efficiency, urban mobility, and long-term competitiveness for international businesses.

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.

UK Government Pursues Diplomatic Resolution

Prime Minister Starmer has ruled out immediate tariff retaliation, emphasizing dialogue and alliance unity. The UK seeks to avoid escalation, but faces political pressure to defend national interests, balancing economic stability with transatlantic and European alliances.

Mining Sector Under Pressure

Mining output has declined due to falling coal and iron ore production, rising costs, and logistical bottlenecks. Global trade tensions, especially US-China tariffs, further threaten export demand, while structural challenges and job losses persist in this critical sector for foreign exchange and employment.

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.

Escalating Cross-Strait Tensions

China’s military drills, incursions, and amphibious exercises near Taiwan have intensified, raising the risk of conflict. These tensions threaten regional stability and global supply chains, prompting increased US arms sales and defense cooperation with Taiwan.

Major Infrastructure and Rail Investments

Mexico’s 2026 federal budget allocates over 300 billion pesos to rail, road, and strategic corridor projects, including the Tren Maya and Istmo de Tehuantepec. While these projects boost logistics capacity, critics warn of technical, environmental, and fiscal sustainability risks.

US Secondary Sanctions on Iran Trade

The US imposed a 25% tariff on all countries trading with Iran, significantly affecting global energy and commodity flows. This move, alongside new sanctions on Iranian entities, increases compliance risks and operational complexity for multinationals engaged in cross-border trade, especially in energy and finance.

Energy Transition and Industrial Competitiveness

Germany is accelerating its energy transition by phasing out coal, building new gas plants, and subsidizing industrial power prices. While aiming for climate goals, the high cost of the transition and energy security concerns are prompting significant government intervention to support energy-intensive industries.

US Trade Access and AGOA Renewal

The renewal of the African Growth and Opportunity Act (AGOA) is pivotal for South African exports to the US. While a three-year extension is likely, eligibility reviews and geopolitical tensions pose uncertainty, threatening duty-free access and impacting sectors like automotive, textiles, and agriculture.

EU-Mercosur Trade Deal Turmoil

France’s staunch opposition to the EU-Mercosur free trade agreement, driven by agricultural and environmental concerns, has isolated it within the EU. The deal’s likely ratification despite French protests signals rising trade policy uncertainty and supply chain risks for agri-food and related sectors.

Stricter Environmental and Import Regulations

New regulations require burn-free certification for feed corn and wheat imports, aligning with global sustainability standards. These rules increase compliance costs for importers and may disrupt agricultural supply chains, especially for animal feed and food processing sectors.

UK Trade Growth Lagging Global Average

UK trade growth is forecast at 2.3% annually, below the global average of 2.5%, due to slow expansion with the US and China. Deepening ties with the EU and other rule-based economies is seen as crucial for exporters and supply chain resilience.

Nile Water Crisis and GERD Dispute

The Grand Ethiopian Renaissance Dam (GERD) has intensified Egypt’s existential concerns over Nile water security. Ongoing disputes with Ethiopia threaten agricultural output, food prices, and political stability, while U.S. and Israeli mediation efforts aim to secure binding water-release guarantees critical for Egypt’s future.

Infrastructure and Logistics Bottlenecks

Despite reforms, South Africa’s infrastructure—particularly in electricity, rail, and ports—remains a constraint. Delays in logistics and persistent service failures disrupt supply chains, increase costs, and erode competitiveness, challenging companies reliant on efficient movement of goods.

Agricultural Import Controls and Supply Chains

France’s suspension of imports of certain South American fruits due to banned substances reflects a tightening of food safety and supply chain standards. This measure, pending EU approval, may disrupt agri-food supply chains and signals stricter enforcement of EU regulations for international exporters.

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.

Political Uncertainty Ahead of Elections

Political volatility, including Parliament dissolution and upcoming elections, creates uncertainty for business operations and investment planning. Coalition dynamics and reform agendas may alter regulatory environments, affecting strategic decisions for international investors.

IMF Dependency and Reform Conditionality

Pakistan’s reliance on IMF support persists, with recent disbursements stabilizing reserves but imposing strict fiscal and structural reforms. While these measures bring macroeconomic discipline, they also constrain growth and complicate policy autonomy, impacting investment strategies and business planning.

Automotive Sector Tariff and Rule Changes

Ongoing negotiations on auto tariffs and rules of origin are central to Mexico’s export competitiveness. Mexico seeks tariff reductions for non-compliant vehicles, while the US pushes for higher regional content. These changes directly impact investment and production strategies in the auto sector.

Semiconductor Supply Chain Realignment

A landmark US-Taiwan trade deal commits at least $250 billion in Taiwanese semiconductor investment in the US, aiming to relocate up to 40% of Taiwan’s chip supply chain. This reshapes global tech supply chains and impacts Taiwan’s strategic leverage.

Labor Market Restructuring and Foreign Workers

Israel has sharply reduced Palestinian labor, replacing it with foreign workers, especially in construction and agriculture. This structural shift affects wage dynamics, labor standards, and operational costs, introducing new vulnerabilities and regulatory scrutiny for businesses reliant on manual labor.

Political Instability and Investment Uncertainty

France faces heightened political volatility following snap elections and a hung parliament, with far-right gains and government survival dependent on fragile coalitions. This instability is dampening investor confidence, delaying investment decisions, and complicating the business environment for both domestic and foreign firms.